A Call to Arms - demand for Coltan causes problems in Congo - Industry Trend or Event

Industry Standard, The, June 11, 2001 by Kristi Essick, Mark Boslet, Boris Grondahl

How the demand for cell phones and computer chips is helping fuel a bloody civil war in the Democratic Republic of Congo.

THE OFFER TURNED UP A FEW WEEKS ago on an Internet bulletin board called the Embassy Network. Among the postings about Dutch work visas and Italian pen pals lurked a surprisingly blunt proposal: "How much do you want to offer per kilogram? Please find me at least 100,000 U.S. dollars and I will deliver immediately,"

The substance for sale wasn't cocaine or top-grade opium. It was an ore called Columbite-tantalite -- coltan for short -- one of the world's most sought-after materials. Refine coltan and you get a highly heat-resistant metal powder called tantalum. It sells for $100 a pound, and it's becoming increasingly vital to modern life. For the high-tech industry, tantalum is magic dust, a key component in everything from mobile phones made by Nokia and Ericsson and computer chips from Intel to Sony stereos and VCRs.

Selling coltan is not illegal. Most of the worldwide tantalum supply -- valued at as much as $6 billion a year -- comes from legitimate mining operations in Australia, Canada and Brazil. But as demand for tantalum took off with the boom of high-tech products in recent years, a new, more sinister market began flourishing in the Democratic Republic of Congo. There, warring rebel -- groups many funded and supplied by neigh boring Rwanda and Uganda -- are exploiting coltan mining to help finance a bloody civil war now in its third year. "There is a direct link between human rights abuses and the exploitation of resources in areas in the DRC occupied by Rwanda and Uganda," says Suliman Baldo, a senior researcher in the Africa division at Human Rights Watch, a New York-based nongovernmental organization that tracks human-rights abuses worldwide.

The slaughter and misery in the Congo has not abated since the country's president, Laurent Kabila, was assassinated in January. (Kabila's son, Joseph, was quickly appointed the new head of state.) Human Rights Watch researchers, working with monitors in the Congo, estimate that at least 10,000 civilians have been killed and 200,000 people have been displaced in northeastern Congo since June 1999. Rebels have driven farmers off their coltan-rich land and attacked villages in a civil war raging, in part, over control of strategic mining areas. The Ugandan and Rwandan rebels "are just helping themselves" Baldo says. The mining by the rebels is also causing environmental destruction. In particular, endangered gorilla populations are being massacred or driven out of their natural habitat as the miners illegally plunder the ore-rich lands of the Congo's protected national parks.

The link between the bloodshed and coltan is causing alarm among high-tech manufacturers. Slowly they are beginning to grapple with the possibility that their products may contain the tainted fruits of civil war. A similar controversy, after all, wracked the diamond industry in the late 1990s, when global demand for the gems helped finance civil wars in Sierra Leone, Angola and Liberia. Since then, the international community has clamped down on the diamond trade, imposing tougher import and export regulations.

But with tantalum, such regulations may be difficult to enforce. The market for the metal is based on secretive and convoluted trade links subject to few international regulations, and the ore is not sold on regulated metals exchanges.

RAPE OF THE LAND

The first wake-up call to the high-tech industry came in April when the United Nations issued a damning report on the "illegal exploitation of natural resources and other forms of wealth of the Democratic Republic of the Congo." After six months of field investigations, a panel of experts in the region assembled by the U.N. Security Council reported its findings.

Among the most alarming of the report's allegations was that Rwandan, Ugandan and Burundian rebels had looted and smuggled thousands of tons of coltan from the Congo into their countries to export to the global market, using the profits to finance their militias. Indeed, the official statistics provided by these countries' governments -- which many human-rights observers believe hide large amounts of black-market trading -- show that Uganda and Rwanda dramatically increased the export of coltan following their occupation of northeastern Congo. For example, Uganda reported 2.5 tons of coltan exports a year before the conflict broke out in 1997. In 1999, the volume exploded to nearly 70 tons.

The U.N. report documents the rebel groups' use of forced labor, illegal monopolies and civilian murder in their high-stakes game to extract this valuable resource. These accusations have not been taken lightly; several members of the U.N. panel that prepared the report have since received death threats. Uganda, Rwanda and Burundi have issued protests to the United Nations over the report, claiming it to be inaccurate and unfounded.

The pillaging of the Congo's natural resources is exacting a devastating human and economic toll, says Leonard She Okitundu, the Congo's minister for foreign affairs and international cooperation. He told the United Nations Security Council in early May that "a consensus was clearly emerging in the council and in the international community on the links between the shameless looting of Congolese natural wealth and the massacres of the Congolese people." The fighting, he reported, has led to "assassinations of civilians, deportations, torture, rape and deliberate spreading of HIV/AIDS," as well as the displacement of millions of refugees.