Interesting news from the world of conflict minerals: Bloomberg and Reuters are reporting that Traxys, a European metals dealer implicated by U.N. investigators for allegedly buying minerals from militias in Congo, has announced that it will cease purchasing minerals from Congo’s eastern provinces.
In December, the U.N. Group of Experts tasked with monitoring the arms embargo in Congo reported that Traxys purchased cassiterite (tin ore) and coltan (tantalum ore) from four Congolese buying houses, known as comptoirs, which had purchased these minerals from sources directly linked to the FDLR rebels, who have recently engaged in a bloody bout of reprisal killings that caused more than 100,000 Congolese to flee their homes in the past three months. Importantly, the U.N. report stated that Traxys was pre-financing these comptoirs, “acknowledging a chain of financing that flows from the foreign companies down to the FDLR-controlled mining pit.” Traxys rejected this claim, said that it had its own means for ensuring that it was not purchasing minerals from armed groups, and suggested that they had to stop buying from Congo in order to satisfy U.N. queries. But according to Dinesh Mahtani, the coordinator for the U.N. Group of Experts, Traxys was not told to cease operations in Congo, though it had been asked about its due diligence schemes.
So why has Traxys taken such an extreme step? My guess is that this is posturing on the part of a company, which may be slapped with sanctions for violating a U.N. arms embargo by knowingly purchasing conflict minerals. The U.N. Group found that Traxys’ clients – “Groupe Olive, Panju, WMC, MDM and Etablissement Muyeye… are aware that certain mines they buy from are controlled by FDLR.” It is interesting to note that Namegabe Mudekereza and Byaboshi Muyeye, the Congolese “business leaders” loudly lamenting this outcome in the press are actually two of the very middlemen that, according to the U.N. report, allegedly purchase from the FDLR and sell to Traxys. It appears that exactly those actors who have allegedly profited handsomely from their dealings in conflict minerals are now attempting to spin any efforts to improve their behavior as a mortal threat to Congolese miners.
Rather than trusting these nefarious actors to somehow clean up their act on their own, the United States should vigorously support a comprehensive solution for Congo’s mineral trade, one that includes a transparent supply chain, secure mining sites, improved governance of mining and trade, and improved livelihood options for miners. Stopping buying minerals from eastern Congo is not the solution: companies, the DRC government, and the U.S. government need to be part of a comprehensive plan to clean up the trade and develop serious alternative livelihoods for miners.