CONFLICT CASE STUDY: Africa-free tungsten buying is "short-sighted" – Global Witness

Tungsten buyers should focus on responsible sourcing rather than avoiding certain areas altogether, according to Sophia Pickles, of non-governmental group Global Witness.

She added that buyers should also widen their scope and consider conflict implications in regions such as South America.

"Taking an 'Africa-free’ position rather than a responsible sourcing stance is not only morally questionable…it’s also a short-sighted business decision," Pickles said.

Taking this "Africa-free" approach, in other words, would not necessarily guarantee material was conflict free, in the same way that buying from Africa would not automatically result in the funding of conflict.

"The EU proposal introduced last week is not restricted to one area. It highlights that companies buying material from any high-risk zone – places like Colombia or Afghanistan – should also be checking their supply chains," Pickles added.

Sources have widely agreed, meanwhile, that the reason at least some buyers of downstream tungsten products have requested their goods contain no African tungsten is that they fear the complexity of the Securities and Exchange Commission (SEC) reporting requirements under the Dodd-Frank act.

"This isn’t about boycotting an area in order to avoid reporting on your business practices – it’s about sourcing responsibly from wherever you’re buying from in the world," Pickles said.

"Since 2010, international guidance, developed by the OECD, has been available for companies, including those in the tungsten industry, to ensure that the minerals they trade or use have not fuelled war in places like [the Democratic Republic of Congo]," she added.

For a number of years, research carried out by Global Witness has shown the connection between the minerals trade and the funding of armed conflict in the eastern DRC, Pickles said.

It was this link that led to the launch of schemes such as the International Tin Research Institute’s (ITRI) traceability and supply chain initiative (iTSCi).

In the years following the passage of section 1502 of the Dodd-Frank act, which applies to conflict minerals, industry associations and companies began to reassess their supply chains and also began to put OECD due diligence guidance into practice, either independently or through schemes like iTSCi, Pickles said.

This attention to due diligence has not been enough to satisfy some buyers of tungsten, however, as they continue to reject material from Africa, while at the same time, traceability schemes have been successful in supporting the tin and tantalum markets there.

Closed pipe supply
"In the eastern DRC, closed-pipe supply chains, whereby each step of the supply chain is known and controlled, have emerged for tin," Pickles said.

"Schemes like these can help companies discharge their due diligence responsibilities – although it’s important to remember that ultimately each company in the supply chain is responsible for its own checks," she added.

Technology company Motorola has also expanded its Solutions for Hope scheme, which uses a "closed-pipe" model to allow conflict-free tantalum to be used in the company’s products, to the North Kivu province in the DRC.

The Solutions for Hope scheme does for tantalum what miners in Africa have been hoping could be done for tungsten, but has not yet been achieved.

According to Motorola, the scheme makes sure minerals that fund conflict do not enter the supply chain and also "creates economic benefits for artisanal miners and their families".

It therefore supports the policies of the USA and the EU by avoiding the creation of a "de facto, country-wide embargo on the DRC" that could "impoverish non-conflict areas", Motorola said.

Sources have suggested, however, that there is a de facto ban on African tungsten, irrespective of whether it comes from a conflict zone, as there is a lack of education among buyers of tungsten, combined with the fact that only a small percentage of the world’s supply comes from Africa.

In Central African countries such as Rwanda, however, the tungsten industry forms a large part of the economy and provides high levels of local employment, which have been threatened by this de facto ban, according to the Rwandan minister of state for mining.

"End-user firms buying tungsten can and should apply the same due diligence framework to mineral purchases from the Great Lakes region – and any other conflict-affected and high-risk areas where they source," Pickles said.

Assuming they do so, in other words, it should be possible to buy traceable conflict-free tungsten from Africa.

Claire Hack
chack@metalbulletin.com
Twitter: @clairehack_mb

Claire Hack

chack@metalbulletin.com

Published

Claire Hack

March 24, 2014

17:47 GMT

London