Mining: Golden age of conflict and crime

Artisanal miners in the Democratic Republic of Congo often have to pay levies to politicians, the militia and armed forces. (AFP)

Artisanal miners in the Democratic Republic of Congo often have to pay levies to politicians, the militia and armed forces. (AFP)

Not so long ago, artisanal mining for tin, tantalum, tungsten and gold in the eastern Democratic Republic of Congo (DRC) commanded little attention from anyone beyond those immediately involved or affected by it.

But after many campaigns by non-governmental organisations, United Nations Group of Experts' reports, UN Security Council resolutions, TV documentaries, newspaper and magazine features and a United States law, it is more or less understood that the artisanal mining sector in the eastern DRC has for years funded conflict and stoked instability there.

 This is at least one of the reasons why a vastly expensive, 12-year UN peacekeeping effort and billions of dollars of aid and reconstruction have still not brought peace to this richly endowed and troubled land.

Not surprisingly then, the world's main interest is in how to sever the links between the eastern DRC's minerals and conflict. Several schemes have been concocted, which are at varying stages of implementation and include new due diligence requirements for the private sector and new natural resource governance standards for the public sectors of the DRC and neighbouring states.

In a new report, Conflict Gold to Criminal Gold, Southern Africa Resource Watch has brought a new and welcome perspective – that of the artisanal miners themselves. Between November 2011 and mid-2012 a team of Congolese researchers, co-ordinated by Enrico Carisch, a former member of the UN Group of Experts, fanned out across four eastern Congolese provinces and visited as many gold mines as they could.

Resource Watch discovered that a gold boom was raging in the eastern DRC, driven by sky-high international gold prices, and – although the report does not mention this – artisanal miners moving away from tin mining because of the shrinking market for a Congolese product that has not been certified as "conflict-free".

The researchers estimate that up to 600 000 people mine for gold in the eastern DRC and production is at least 12 tonnes a year, probably far higher.
This makes artisanal gold a multibillion-dollar industry. But such are the levels of smuggling that gold production is, ludicrously, only a few hundred kilograms a year, according to the DRC's official statistics.

Government control

Although barely mentioned in the report, a new rebellion was launched in eastern DRC while the Resource Watch research was taking place. The rebels were Congolese Tutsi ex-militia combatants, who were uneasily integrated into the armed forces in 2009. Nonetheless, the researchers are probably right to conclude that most of the four eastern provinces – North Kivu, South Kivu, Orientale and Maniema – are more militia-free and under government control than they have been for years.

The most interesting and startling finding of the report is that, according to the artisinal miners, this extension of state control has not improved their lot. This is not a message we are used to hearing. Because the UN is an organisation of states, the reports of its expert groups and the resolutions of its Security Council are invariably deeply statist – more state control is always to be welcomed. International non-governmental organisations too often unthinkingly castigate the private sector for evading the payments the state demands, as if more taxes in the hands of state agents is an inherently positive development.

The miners the researchers spoke to see matters differently. Living under rebel control generally means being left to your own devices for most of the time, but being brutally pillaged every so often.

Living under state control brings some respite from pillage, although the armed forces also loot. But it results in constant harassment and illegal taxes from a mushrooming host of state agents, including the mines police, mines ministry officials, intelligence agents and those working for the Service for Assistance and Organisation of Artisanal and Small-scale Mining, which was established in 1999 by Laurent Désiré-Kabila, father of the current president, Joseph Kabila, to help small-scale miners.

Resource Watch ranks it as number one on its list of worst offending government institutions for artisanal miners. The organisation says that poorly paid officials rarely bother with training and development, but instead concentrate on extracting rents from miners.

Number two on the Resource Watch list of shame is the intelligence service, which justifies its presence at mines and illegal rent collection using vague, unconvincing references to national security.

Extensive economic interests

After such interesting findings, it is a pity that Resource Watch's conclusions and recommendations are so lame. The report calls, for example, for "legitimate" armed forces regiments to be deployed to protect mining areas. But who will be ordering the deployments? As the 2010 and 2011 reports by the UN Group of Experts' on the DRC conclusively demonstrated, key members of the armed forces – not to mention the political elite – have extensive economic interests in the eastern DRC mining sector and deploy troops to protect them.

The lack of reliable official statistical data clearly irked the Resource Watch researchers, who repeatedly called on the state to get its house in order. Yet this is the same Congolese state whose capacities are rightly derided elsewhere in the Resource Watch report as hopelessly feeble.

And the core reason why the Congolese state in its current form probably never will reform itself is not mentioned. Despite two democratic(ish) elections at presidential, parliamentary and provincial levels, there have never been democratic local elections.

At local level, the central government still appoints administrators who answer to their patrons and have no inherent interest in the wellbeing or support of the population. This makes for a dire lack of accountability in natural resource governance and no real incentive – no fear of being booted out of office – driving local officials to improve matters.

So determined is the report to escape the "conflict minerals" narrative that it barely mentions the issue. Nonetheless, there are useful clues about the current state of play buried in its pages. For example, at gold mines in Kalehe, South Kivu, diggers report being taxed by Rwandan rebel militia and the armed forces. And there is extortion by Mai Mai militia and the armed forces along routes from South Kivu gold mines to the main towns of Bukavu and Uvira.

Criminal networks

Illegal taxes and levies on gold miners as well as straight looting by the armed forces appear to be depressingly commonplace. This supports the findings of earlier reports by the Group of Experts that the artisanal gold sector is a major source of finance for armed groups and criminal networks in the armed forces. In this sense, the Resource Watch report's title is misleading. The gold has not moved from conflict to criminal status – it now has both.

Resource Watch's focus was on artisanal miners, but it is nonetheless curious that its researchers took so little interest in what happens to the gold once it leaves the diggers' hands. According to the Group of Experts' reports, most of the gold is smuggled to Dubai, where it is impossible to track. The Dubai Multicommodities Centre has recently produced new due diligence requirements for gold purchasers, but the evidence suggests that the bulk of the DRC's conflict gold still ends up there.

There is only one gold mine operating industrially in the DRC – Twangiza in South Kivu, which is owned by Toronto-listed Banro.

Kibali, in Ituri, Orientale Province, which is operated by South Africa's Randgold and part-owned by AngloGold Ashanti, is due to start production in 2013. The Resource Watch report captures the ambivalence of artisanal miners about these developments.

On the one hand, the miners know that industrial mining will bring jobs, infrastructure, housing and new social services. On the other, they are nervous about being thrown off the mines and losing their incomes. If Banro's experience at Twangiza is anything to go by, miners will resolve this by trying to have both. A number of former artisanal miners have been employed by Banro and others have been carefully rehoused, but the site has nonetheless since been invaded by hundreds of illegal diggers who pan for gold in a river right next to the massive earthworks thrown up by Banro's operation. Banro dares not evict the diggers for fear of sparking violence in what was until relatively recently a war zone.

Randgold has moved thousands of people away from Kibali in preparation for industrial mining. Artisanal diggers can, for the moment, still access Kibali sites. It remains to be seen what will happen once this access is denied. The hundreds of thousands of artisanal diggers in the eastern DRC are mobile and highly resourceful. Even an effective, well-resourced state possessed of a democratic mandate at local level would not find it easy to manage them.

The world should cheer any rolling back of militia influence in the eastern DRC, but this report demonstrates that we should not mindlessly welcome its replacement with the Congolese state. For this transition to benefit the people of the eastern DRC, the Congolese state needs to change. Democratic local elections would be a good start.

Gregory Mthembu-Salter is a former member of the UN Group of Experts in the DRC