Global Investment Watch

Coltan is Killing the Congo

In recent months, more than 250,000 people have been forced to leave their homes in eastern Democratic Republic Of Congo because of fierce fighting between government and rebel forces. Many people have fled to the eastern city of Goma, which has now seen its population rise from 500,000 to 700,000. While recent press reports suggest a lull in the fighting between the government led forces and the rebel troops led by Laurent Nkunda, his men are still battling various pro-government militias roaming the eastern part of the region.

However, the numbers are devastating:

• 45,000 people die each month
• 5.4 million have died since 1998
• 200 of every 1000 children die before the age of 5
• 400,000 women have been raped

Why is the happening?

The greatest motive for violence in the DRC is not the thirst for political power so much as the thirst for the immense potential profit from the DRC’s ample mineral wealth. While “blood diamonds” have garnered attention in the popular media, a lesser-known but important natural resource has precipitated this ongoing crisis: Coltan.

In the early part of the 21st century, increased consumption of electronic devices of all types depleted stockpiles of a core component, tantalum. This caused the commodity prices of the metal to soar to $500 a pound. Tantalum is the refined element of coltan, which is found in vast quantities in the eastern, war-torn region of the Democratic Republic of the Congo (DRC). This had a dramatic effect on social and environmental conditions in the DRC and is a core factor in the horrific conflict in that region of central Africa.

Coltan is the name for columbo-tantalite, which becomes tantalum when it is refined. Coltan is used in cellular phones, computers, jet engines, missiles, ships, and weapons systems. Capacitors made of tantalum can be found inside almost every laptop, pager, personal digital assistant and cell phone. Though Australia currently mines 60% of the world’s tantalum, the world’s largest reserves are in the Democratic Republic of Congo, which accounts for 64% of the world’s tantalum reserves.

According to sources, Coltan extraction dramatically impacts the environment. The metal is found in high concentrations in the DRC’s Kahuzi Biega National Park, home of a rich tropical forest ecosystem. In 2001 more than 10,000 men, women, and children relocated to the National Park, in hopes of earning a living wage. Miners depended on the forest for sustenance, and relied on bushmeat for animal protein. The impact on large mammals was devastating with elephant and lowland gorilla mortalities are 3,700 and 8,000 respectively. The strain on wildlife by over-hunting was compounded by habitat loss due to deforestation from the construction of mines and camps.

The Economics of Conflict

There are reports that forces from neighboring Rwanda, Uganda and Burundi are involved in smuggling coltan from Congo, using the revenues generated from the high price of coltan to sustain their efforts in the war. It is estimated that the Rwandan army made at least $250 million over a period of 18 months through the sale of coltan, even though no coltan is mined in Rwanda. All countries involved in the war deny exploiting Congo’s natural resources.

These groups laundered coltan through neighboring countries, enabling the warring groups to finance the ongoing violence.

After Rwanda, Uganda, and Burundi’s successful invasion of eastern and southeastern DRC a great deal of what the UN labeled “mass scale looting” started to take root. While initial invasion tactics were still being worked out, military commanders were busy making business deals with foreign companies for the Congo’s vast mineral reserves.

When the mass scale looting died down as stocks of minerals were depleted, soldiers were encouraged by commanders to take part in small-scale looting.

Coltan is the most profitable mineral export from the Congo, but it is particularly difficult to track because it is often listed as cassiterite, a mineral of lesser quality, for which export taxes are lower. Coltan has been illegally extracted and sold via Burundi since 1995, three years before the invasion.

In 2000, Rwanda spent $70 million supporting about 25,000 troops and Uganda spent $110 million supporting twice as many troops. Rwanda and Uganda have financed their war efforts through commercial deals, profit-sharing with companies, and taxation among other things. Rwandan soldiers often steal coltan collected by villagers and sell it to diamond dealers themselves. From dealing in coltan trade alone the Rwandan army may have collected $20 million per month and coltan profits have been used to pay back loans from foreign creditors.

Recent Non-Developments

As was noted in Reuters earlier this week, in response to renewed fighting in eastern Congo, the U.N. Security Council last month approved a temporary increase in the U.N. peacekeeping mission in Congo, known as MONUC, to 20,000. It is already the largest U.N. force in the world.

Diplomats from European Union member states say they are still discussing the possibility of sending EU troops to help secure the delivery of humanitarian aid in Congo until MONUC’s 3,000 reinforcements arrive.

But prospects for an EU mission grew dimmer on Tuesday after Karel De Gucht, the foreign minister of Congo’s former colonial ruler, Belgium, said that talks with European counterparts in Brussels had left him with the impression there was little appetite for such a mission.

“No country is willing to take a lead,” he said. “Secondly, most of the countries say they are overstretched, firstly in Afghanistan but also in Iraq, so they have no troops … available.”

A solution to the disaster in the Congo seems intractable with little willingness by the western world to step up, governments in the region fueling the conflict for economic gain and global business interests motivated to let the status quo remain despite any reputational risk.

Does war make economic sense? Is rape an element of doing business? As long as we don’t pay attention, I suppose we must answer these questions in the affirmative.