UN report: What it says on natural resources

More excerpts from the UN Group of Experts' report. Today, a summary of what they said on natural resources. It's incredibly detailed, but worth reading line by line.

D. Exploitation of Natural Resources

Gold

124. The use of gold by armed groups has become markedly accentuated in the last few years due to the ease with which it can be smuggled, although this is difficult to quantify given that government mining documents from North Kivu and South Kivu show only a few kilograms of gold exported officially each year. A DRC senate report published in September 2009 estimated that 40 tonnes, or 1.24 billion US dollars of gold, is smuggled out of the DRC each year. On the basis of that figure and other interviews, the Group estimates that armed groups, in particular the FDLR, may derive several million dollars of revenues each year from the trade which therefore represents one of the most significant avenues of direct financing for them.

125. The Group has traced the flow of gold from sites exploited and taxed by the FDLR and other militia, and demonstrates in this section that significant amounts of gold are being trafficked through the region, particularly through Uganda and Burundi, and eventually sold in the United Arab Emirates. The Group demonstrates that the networks in Uganda and Burundi are inter-related and both have commercial ties to individuals operating in the UAE.

North Kivu-Uganda Networks

126. The Group visited the location of Kasugho in North Kivu, where it confirmed significant exploitation of gold mines by the FDLR in the jungles west of Kasugho, in Lubero territory, where some of the richest gold deposits in North Kivu are found (see the Group’s December 2008 report, S/2008/773, for further background on Kasugho). During operation Umoja Wetu, gold digging in the jungles west of Kasugho was only temporarily disrupted, and FDLR units reoccupied gold fields in that area in June 2009. The Group confirmed this on the basis of the observation of deliveries of general merchandise arriving in Kasugho for onward transmission to sites where mining activities had resumed. These findings were also corroborated through interviews with FDLR ex-combatants, FARDC and gold traders who consistently confirmed, as late as September 2009, that the FDLR contined to make significant profits out of the gold mines west of Kasugho, even if FARDC units had seized some of the main sites at Fatua, Makokwandro and near Oninga, in Walikale territory.

127. The Group received further detailed information on the FDLR’s control of gold in this area: an FDLR ex-combatant confirmed that FDLR battalion commander Colonel “Dmitry” based near Kasugho was in charge of the gold trade and was working with Mai Mai units in exploiting several gold deposits in Lubero and Walikale territories. Interviews with two separate FDLR ex-combatants from Oninga, a remote location in the territory of Walikale further west from Kasugho, mentioned in June 2009 that Col Dmitry had also been receiving at least three kilos of gold a month (roughly 90,000 US dollars equivalent) from their own specific FDLR units which, in turn, were taxing and trading at gold mines near Oninga. Local chiefs and Mai Mai militia interviewed by the Group in October 2009 stated that, despite the fact that the FDLR had been pushed out of Oninga town, the FDLR still controlled and taxed many gold mining zones south east of Oninga and south west of Lubero town. The Group received testimonies and MONUC reports that FDLR and various Mai Mai units, including those of Gen. Lafontaine, have formed an alliance covering parts of Lubero and Walikale territories where significant gold reserves are being jointly exploited.

128. The gold from Kasugho and Oninga is principally sold to Kahindo Muhiwa, Katina Kambale Mbayahi and Kambale Vikalwe, three Nande gold traders based in Butembo who the Group cited in its December 2008 report (S/2008/773), according to local businessmen in Butembo and a gold trader in Kasugho. In 2008 Mr Muhiwa, Mr Kambale and Mr Vikalwe created a company called Glory Minerals, along with a fourth partner, Nzanzu Mbusa, the widow of Dr Kambale Kisoni, who had been listed by the Committee for targeted sanctions in March 2007 and was assassinated in July 2007. The company documents for Glory Minerals are annexed in S/2008/773. Ms Mbusa, who is partly based in Kampala, claims to have since withdrawn her interest from Glory Minerals.

129. According to government mining officials, Glory Minerals has now received approval to start operating as an official gold exporting company. The Group obtained a document dated 12 January 2009 issued by Kabila Kakule, a government mining official in Butembo, asking all small traders in Lubero territory to provide all their gold to the three partners of Glory Minerals for export (Annex 40). The Group raised this issue with Leonide Mupepele, the head of the Centre d’Expertise d’Evaluation et de Certification (CEEC) in Kinshasa, who is also Mr Kakule’s superior, and who explained to the Group that Glory Minerals obtained permission to export so that the government could control the company’s activities and eventually force it to comply with due diligence requirements.

130. According to an email obtained by the Group, Mr Kakule on 2 February 2009 wrote to Alain Goetz, the owner of a gold refinery business, Tony Goetz & Zonen, in Antwerp, Belgium, to inform him that gold purchased by Glory Minerals does not come from areas controlled by the FDLR or Mai Mai, and that any gold supply from Glory Minerals “complies with United Nations standards” (Annex 41). The Group has established above that Glory Minerals continues to source gold from FDLR-controlled areas. Mr Kakule himself and other government mining officials confirmed the authenticity of this email, although Mr Goetz insisted until recently that he had no recollection of this correspondence.

131. In addition, trading sources as well as a former Mai Mai leader interviewed by the Group reported that Gen Lafontaine, who has several kinship ties to the Nande traders in Butembo, acts as an intermediary between the FDLR and many traders in Butembo, organizing the delivery of general goods to the FDLR in exchange for brokering gold deals. Several Nande traders in Butembo also stated to the Group that the three businessmen associated with Glory Minerals travel regularly to Kampala and Dubai to sell their gold.

132. The above information illustrates that the DRC authorities have allowed Glory Minerals to continue trading without investigating and verifying the information submitted by the Group in S/2008/773.

133. Seven different gold traders interviewed separately by the Group in Butembo, Kampala and Dubai confirmed that the main personalities involved in orchestrating the laundering and smuggling of gold from Butembo onto Kampala and Dubai are Rajendra Vaya and family, and J.V. Lodhia (who is known by Congolese and Indian traders as “Chuni”) and his son Kunal Lodhia. These businessmen of Indian origin are based in Kampala and have extensive family ties in Nairobi, Kenya. Mr Vaya is the director of Machanga Ltd, and J.V. Lodhia is the director of Ugandan Commercial Impex Ltd (UCI Ltd), both of which are sanctioned entities designated by the Committee in March 2007. Gold traders confirmed to the Group that both Mr Vaya and the Lodhia family pre-finance cash to trusted intermediaries who then offer slightly above market prices in order to guarantee maximum interest from DRC local traders. Mr Vaya’s network reportedly handles more volume of gold than Mr Lodhia’s network. The gold is then smuggled to Kampala by road or by commercial flight to Entebbe and finally onto Dubai, where it is handled by an associate of both families called Jigar Kumar.

134. Mr Kumar was named as a gold supplier on the 2008 client list of Emirates Gold (see S/2008/773), a major gold refinery in Dubai. Kampala traders have also confirmed that Mr Kumar is a family relative of Mr Vaya. Mr Kumar works at a foreign exchange bureau in Dubai called Asia Exchange Centre (see Annex 42), which employs workers whose presence have been noted by the Group at Mr Vaya’s Kampala-based foreign exchange bureau, Vaya Forex. The Group visited Asia Exchange Centre and confirmed that Mr Kumar works there.

135. In Kampala, the Group was informed by a gold trader, who correctly identified unmarked photographs of Mr Mbayahi and Mr Vikalwe (shareholders of Glory Minerals) that he met them in a hotel in Kampala in February 2009 where they attempted to persuade him to inform other gold traders to sell to “Chuni”, Mr J.V. Lodhia’s alias. The trader told the Group that Mr Mbayahi had spoken to “Chuni” on the phone in front of him and that Mr Mbayahi was subsequently collected from his hotel in a sports utility vehicle driven by a young Indian man who was accompanied by a Ugandan security official in uniform.

136. The Group obtained phone logs for Mr Muhiwa, another shareholder of Glory Minerals, which reflect frequent communications between Mr Muhiwa and a number belonging to Nilesh Lodhia, a former employee of J.V. Lodhia. The logs also show calls from Mr Muhiwa to another number which the Group has phoned and which was answered by a person who acknowledged he was acquainted to “Chuni”, the “dealer”. Mr Muhiwa was also in contact once with Mr Vaya in Kampala and 134 times with Mr Kumar in Dubai between May and August 2009. These communications corroborate reports of relationships between Mr Lodhia, Mr Vaya, and Mr Kumar.

137. Several gold traders interviewed in Kampala and Dubai, as well as an anonymous contact, informed the Group in separate interviews and communications that major gold trading businesses in Kampala were instructed to shut down their activities during the week of the Group’s visit to Kampala between 9 July 2009 and 17 July 2009. A Congolese researcher, known by the Group, visited Mr Lodhia’s offices in Kampala, which now hosts his other business Aurum Roses. The researcher was greeted by a Congolese employee of Aurum Roses who responded to the source’s enquiries as to whether they were buying gold. The employee stated to the source that it was possible to sell gold, and asked the researcher to come back the next day. This conversation happened on the day before the Group was expected to leave Kampala to travel back to the DRC.

138. The Group obtained video footage showing a prospective trader approaching the gates of Mr Vaya’s address in Kampala. The footage shows the gate opened by an Indian employee of Mr Vaya who tells the trader to come back the following week to sell gold. The Group annexed a still photo taken from the video footage which has been confirmed by several sources as an employee of Mr Vaya (Annex 43). The video footage has been archived at the United Nations. The recorded conversation happened a few days before the Group was expected to leave Kampala to travel back to the DRC.

139. In August 2009, the Group visited Dubai where it made contact with two Congolese gold traders who informed the Group that Mr Lodhia, or “Chuni”, was transferring gold to a shop they both identified in the gold Dubai souk (see box below for further details). The same traders also informed the Group that Mr Lodhia’s carriers have provided gold directly to Mr Kumar at the Asian Exchange Centre bureau.

140. The Group obtained phone logs of a prominent gold dealer in Bujumbura, Mr Mutoka Ruganyira, who is believed to be also trading in FDLR gold (see paragraphs 142 to 155 for a full explanation of Mr Mutoka’s activities). Mr Mutoka’s phone logs show 60 phone communications between himself and Mr Kumar in Dubai between April and July 2009 and four calls between himself and Mr Vaya in Kampala during the same period. Mr Mutoka and Mr Vaya acknowledged they are old associates and worked together in the gold business in Burundi before Mr Vaya left the country to concentrate his business in Uganda. Mr Mutoka informed the Group that he had been in contact with Mr Vaya because Mr Vaya facilitated money transfers on his behalf. Mr Vaya denied having any ongoing business relationship with Mr. Mutoka. The Group obtained receipts showing Mr Vaya purchasing almost 50,000 US dollars in flight tickets between May and June 2009 for associates travelling between Entebbe, Bujumbura, Nairobi and Mumbai. (Annex 44). Mr Vaya has been unable to explain what these flight tickets were purchased for.

141. The Group obtained Ugandan customs statistics, and analyzed several suspected front companies being used by the Lodhia and Vaya families, although is unable to conclude from these statistics how much gold they are exporting on a monthly basis. Several traders interviewed in the DRC, Kampala and Dubai however stated to the Group that both families sometimes export up to several hundred kilograms of gold a month. Nearly all gold declared by Ugandan customs is exported to the UAE (see box below for further details).

South Kivu-Burundi& Tanzania networks

142. Based on evidence gathered of numerous purchases of gold from trading networks and mining areas that are controlled by the FDLR and FRF in several different locations of South Kivu, the Group is of the view that most of this gold is smuggled across from South Kivu to Burundi where it is sold to Mr Mutoka Ruganyira at his office in Bujumbura, according to Burundian and Congolese government officials, local NGOs and FDLR and FRF ex-combatants and affiliates. Mr Mutoka was cited by the Group in its December 2008 report (S/2008/773) and is mentioned earlier in this report in paragraph 140.

143. The Group received numerous testimonies from DRC government mining agents and local businessmen that a Bukavu-based trader, known as “Mange”, who at the time of writing was not officially licensed to purchase gold by the government, purcahases large amounts of gold from FDLR held areas in Mwenga, Itombwe, Shabunda and Walungu territories and subsequently supplies Mr Mutoka.

144. In July 2009, the Group visited the locality of Burhinyi (Walungu territory) and the local market where gold from an FDLR controlled gold mine nearby was being traded. Local officials identified the only trader of gold attending the market as an agent of Mange. The Group also obtained government documents proving that a supplier of Mange, known as Neo Bisimwa, was involved in purchasing gold traded by General Rutambuka Ntabitondeye of Mai Mai PARECO. Gen Ntabitondeye had been issued with an official permit to trade gold in an area of Kalehe territory, South Kivu, that was jointly controlled by the FDLR and PARECO in 2008 (Annex 45).

145. In the course of the mandate, the Group interviewed government mining agents, small-scale gold traders and other businessmen in Bukavu, who confirmed that Mr Mutoka purchases gold from Mange as well as from another businessman, Evariste Shamamba who runs a gold exporting company Etablissement Namukaya. Mr Shamamba was cited in the Group’s report of December 2008 (S/2008/773) for trading gold from the FDLR, and continues such activities according to numerous testimonies received by the Group in 2009. The Group also obtained an audio recording of Mange acknowledging that he sells his gold to Mr Mutoka. This recording has been archived at the United Nations.

146. The Group has interviewed two other gold traders based in Bukavu who have been in telephone contact with Mr Mutoka and Mr Mange during the first nine months of 2009, and who stated that Mr Mange purchases gold in order to supply Mr Mutoka on a regular basis. The same traders informed the Group that another trader, Buganda Bagalwa, is a regular supplier to Mr Mutoka. The Group has determined that Mr Bagalwa has been in direct communication with Mr Mutoka more than fifty times between January and August 2009, and more than 150 times with Mr Mange between May and September 2009.

147. Mr Mutoka’s phone logs also show that he has has been in communication 22 times with Belgium number belonging to Guy Liongola, a gold trader based in Belgium, between January 2009 and September 2009. A previous Group of Experts report (S/2007/423) noted that Mr Liongola imported gold from Mr Shamamba’s company, Etablissement Namukaya.

148. A gold trader in Minembwe stated to the Group in the course of an interview in July 2009 that he had sold gold obtained from the Hauts Plateaux, including from FRF-controlled areas, and that quantities of gold are transferred from the Hauts Plateaux to Mr Mutoka’s agents in Uvira on a weekly basis. The Group obtained a testimony from an eyewitness who traveled, in early 2009, from Uvira to Bujumbura with an FDLR liaison officer who sold gold to Mr Mutoka in the course of the same trip.

149. Acoording to several interviews conducted by the Group, Mr Mutoka relies on the protection of top security officials in both Burundi and the DRC. Several sources in Burundi stated that Mr Mutoka benefits from his relationship with governmental officials in customs and security agencies, including General Adolphe Nshimirimana, the director general of the Burundian intelligence services. The phone logs of Mr Mutoka show frequent and regular communications between him and Gen Nshimirimana over a period of several months in 2009. Mr Mutoka acknowledged to the Group having a relationship with Mr Nshimirimana but denied contacting him more than twice every six months (see paragraph 87 for more on Gen Nshimirimana).

150. The Group analysed the telephone logs of Mr Mutoka between the period of January 2009 through to September 2009 and found evidence of over 270 phone communications between himself and six other gold traders in South Kivu reportedly involved in the illicit gold trade. Mr Mutoka told the Group that the last conversations he had with two such traders, Honore Lukingama Abanta and Mwite Ruganrwa took place in December 2008, in contradiction with the phone logs, and maintained that these traders called him only to check the price of gold. Both traders separately informed the Group that they called Mr Mutoka only to discuss personal matters. The phone contacts between the traders and Mr Mutoka generally coincide on the same days as each other, and shortly before or after Mr Mutoka officially exported gold to the UAE or made calls to Dubai. The Group was informed by other gold traders in South Kivu that Mr Abanta frequently delivers Mutoka gold from the high plateau in South Kivu.

151. One gold trader interviewed by the Group declared that Mr Abanta was aware of the Group’s visit to Mr Mutoka’s office on 3 September 2009 and the content of the discussions. Two gold traders interviewed in Bukavu in October 2009 also informed the Group they had been given specific instructions by Mr Mutoka not to cooperate with the Experts as the Group was investigating the smuggling of gold into Burundi.

152. Mr Mutoka nearly exerts monopoly on the entire flow of gold due to his ability to pay slightly above market prices and maintain a web of pre-financing networks operating in Burundi and the DRC. Burundian customs statistics obtained by the Group report that a company called Berkenrode BVBA, which Mr Mutoka has acknowledged owning, exports nearly all the gold exported officially from Burundi. The company exported 912 kilograms of gold, just two kilograms less than the entire declared exportations of Burundi between January 2009 and September 2009. All the gold was declared as exported to the UAE (see Annex 46 and box below for further details).

153. Mr Mutoka acknowledged that he had changed the name of his company from Gold Link Burundi Trading (GLBT) to Berkenrode BVBA in January 2009. Burundian customs declarations show he actually started exporting under the name Berkenrode BVBA on 16 September 2008, a few days after the Group first met Mr Mutoka in 2008 when he was exporting under the name of GLBT.

154. The Group obtained a notarised document signed by Mr Mutoka’s daughter, Ms Samra Sefu, reflecting the address of Berkenrode BVBA as 56 Jacobs Jacobsstraat, Antwerp (Annex 47). The Group has also obtained confirmation from Belgian company documents showing that Mr Goetz operates a company called Berkenrode at 56 Jacobs Jacobsstraat in Antwerp (Annex 48), which is directly next door to his gold smelting business, Tony Goetz & Zonen, based at 58 Jacobs Jacobsstraat. Mr Goetz’s attorneys have explained to the Group that his company Berkenrode in Antwerp is called Berkenrode BVBA in its full appellation. The Group subsequently received a letter and documents from Mr Mutoka’s lawyers which show that Berkenrode BVBA is also a company registered in Burundi under Mr Mutoka’s name (Annex 49).

155. Mr Mutoka informed the Group that he chose Berkenrode BVBA as his company’s name because it was a name he had heard and liked when he visited Belgium. After the Group had explained that it knew the company address was the same address as Mr Goetz’s, Mr Mutoka and Mr Goetz subsequently explained that Mr Mutoka had registered his company at Mr Goetz’s company address in Belgium to take advantage of taxation rates in Belgium, which were preferential to those in Burundi. Subsequently Mr Mutoka’s lawyers wrote to the Group and denied any association with Berkenrode BVBA in Belgium.

156. Mr Goetz, who has recently registered a new company, AGOR Ltd, at the Dubai Multi Commodity Centre (DMCC), insists that he has no ongoing business relationship with Mr Mutoka, nor does he have any recollection of being contacted by Congolese officials regarding possible gold consignments from Glory Minerals, referred to in paragraph 130 above.

157. During the Group’s first meeting in Antwerp in March 2009, Mr Goetz informed the Group that he had not purchased any gold from any source in the DRC or its neighbouring countries for several years. Later in October 2009, Mr Goetz admitted in response to a query by the Group that he had in fact purchased a consignment of 3 kilograms of gold from Mr Mupepele, the director of the CEEC in Kinshasa, who had come personally to his showroom in Antwerp to sell the gold in August 2008. Mr Mupepele told the Group that Mr Goetz had also purchased a second consignment from him by courier, which Mr Goetz acknowledged after several requests from the Group.

158. The Group also established that Gen Masunzu and Col Nakabaka, the commanders of the 10th military region, cited earlier in this report for their role in the diversion of military equipment to non-governmental armed groups (see paragraphs 23 to 35), are significantly involved in the gold trade in South Kivu. The Group has obtained a written complaint by the mining company Samiki citing Col Nakabaka’s control over mining areas in the company’s concession, and the refusal of military elements under his command to withdraw despite the recommendations from the governor of the province to do so (Annex 50). Several traders interviewed by the Group in the course of the current and past mandate, reported that mining areas controlled by Col Nakabaka are known as the “10^th military region”, and much of the gold is laundered on his behalf by Mange and Mr Shamamba, referred above as suppliers of Mr Mutoka.

159. The Group has also obtained a document detailing a request by Col Nakabaka made to Mr Shamamba’s company, Etablissment Namukaya (otherwise known as Congocom), for cement to complete the construction of his house in Uvira (Annex 51). The Group has also directly observed Gen Masunzu in August 2009 discussing matters with a company agent of Etablissement Namukaya in Bukavu. According to several traders, Col Nakabaka handles the gold trade in FDLR and Mai Mai areas, and Gen Masunzu controls the flow of gold from the Hauts Plateaux, where FRF and FDLR cohabitate.

160. The Group has annexed an organogram (Annex 52) covering the cross- cutting relationships of the various networks listed above, for ease of reference.

Gold networks in the DRC, Burundi, Uganda and the UAE

The Group of Experts documented fundamental irregularities in the international gold trade between the DRC, Uganda and Burundi, and the UAE, and gathered evidence of inconsistent and incomplete customs declarations and procedures, as well as a lack of adequate control procedures by government customs and mining authorities in gold exporting and importing countries.

The Group received strong indications of high level protection and in some cases complicity in the illicit gold trade by government officials. The Group was provided incomplete and partial customs declarations for gold exports by the Ugandan Revenue Authority (URA), which officially provided the Group with records of 130 gold exports between January 2008 and May 2009. The Group was nevertheless able to obtain statistics through a URA employee displaying 215 recorded gold exports during the same period. These records have been archived at the United Nations. The Group was also informed by Ugandan-based gold traders that they were encouraged to declare Congolese gold they imported or re-exported from Uganda as gold of southern Sudanese origin on their official documentation. The Group has made several requests to the Burundian authorities for information on gold companies and statistics since September 2008, and has received no official response although it has obtained these statistics independently. Another worrying indication is the fact that the Group has established that its movements and activities were being closely monitored both in Uganda and Burundi (see above).

The Group has obtained a written letter from the DMCC, dated April 2007 (Annex 53) advising all DMCC members to stop purchasing gold from DRC, Rwanda and Uganda. However Ugandan customs statistics obtained by the Group show gold exports from April 2007 as consistently arriving in the UAE. Mr Mutoka informed the Group that since his primary client in Dubai, Kaloti Jewelry, ceased buying from him in 2008, he declares his gold to customs in Burundi after which it is broken up into smaller packages and carried to Dubai by a number of his agents and declared at customs before being sold “anywhere in the gold souk”. Mr Mutoka admitted to breaking the gold stocks down into packages of less than a few kilogrammes to avoid detection by Dubai customs.

The Group has not received any responses from its official requests to the UAE authorities for customs and immigration documentation. The Group visited Dubai where it held official meetings and made all possible efforts to constructively engage with the UAE authorities in further identifying some of the gold trading activities as described above. In the UAE, the Group asked for customs and immigration documents and information on Machanga Ltd and UCI Ltd in order to compare the identities of the agents carrying and declaring gold on behalf of the companies during the period before the companies were listed under UN sanctions, against possible ongoing gold declarations by those carriers. These and other requests on other individuals and companies were not responded to.

The DMCC has provided information on AGOR Ltd, a company owned by Belgian gold dealer Alain Goetz, as well as two other DMCC member companies the Group has been investigating, including one that is located in the Dubai gold souk and which was alleged by two Congolese gold traders to be receiving gold from Uganda. According to the DMCC all three companies have reported no gold imports or exports as per their audited accounts which are updated only up to 2008.

Since the adoption of resolution 1857(2008) on 22 December 2008, the UAE is yet to submit a report on the implementation of the travel ban and assets freeze pursuant to paragraph 7 of the resolution,, which the Group considers would have been relevant to the cases of Machanga Ltd and UCI Ltd in light of the fact that the directors of both these companies continue to do business in the UAE.

The Group also notes that Jigar Kumar, who the Group has described in this report as being part of the gold-trafficking network referred to above, has been named on the client list of Emirates Gold in 2008 (see S/2008/773). Mr Mohamed Shakarchi, the Managing Director of Emirates Gold, claims that the company made a mistake by referring to Jayendra Kumar, their client, as Jigar Kumar. Emirates Gold did not provide any documentation to the Group supporting this claim, nor did it provide other documentation the Group had asked for and which Mr Shakarchi had repeatedly assured the Group he would provide.

The DRC authoriies have approved an export license for Glory Minerals, a gold company which the Group has shown in this report as well as in the December 2008 report (S/2008/773) as purchasing gold from FDLR networks. When the company was registered in 2008, it was done in the name of four traders including Nzanzu Mbusa. Ms Mbusa had last year hired a lawyer, Gerard Kabemba, who occupies an office in the new Ecobank building on the Boulevard 30 Juin in Kinshasa. Mr Kabemba is the legal notary for another gold export company that has been formed in 2009, called Northern Goldline. Mr Kabemba refused to discuss this company with the Group.

161. The Group received several testimonies from FDLR ex-combatants and local gold traders in Tanzania and the DRC relating to the transfer of several hundred grams a week of gold entering Tanzania from South Kivu, and comprising gold that has been sourced from FDLR-controlled zones. According to a dealer based on the beach in Kigoma, gold comes regularly by pirogue and is sold to local dealers in Kigoma who work on commission for businessmen in Dar es Salaam. Local traders in Kigoma cited three major gold dealers based in Dar es Salaam, including Crown Jewellers, Ruby Bureau de Change and a businessman known as Jafar, although testimony from FDLR ex-combatants indicated several more small purchasers of gold.

162. The Group met the owner of Ruby Bureau de Change, Mr Virendra Sagar, who told the Group that he had indeed bought gold from Kigoma but stopped at the start of 2009 due to an immigration crackdown on Congolese dealers by Tanzanian officials at Kigoma. DRC consulate officials in Kigoma were unaware of any particular immigration measures targeting DRC nationals. The Group also visited Crown Jewellers, where its owner informed the Group that he did not purchase any gold except for gold jewelry which he would then smelt. In the course of same visit to the shop, an employee of Crown Jewellers contradicted the owner by saying the shop regularly bought gold powder. Gold traders buying from the DRC had previously identified a shop run by a businessman known as Jafar as a gold-buying enterprise. The Group met Jafar in October 2009 in a shop called Golden Telecommunications in Dar es Salaam, of which he claimed to be a shareholder. Mr Jafar denied his involvement in the gold trade before walking out of the shop in mid interview.

163. The Group does not have any further evidence on the three businessmen above, but nevertheless considers the flow of gold from FDLR zones in the DRC through Tanzania as a potential arms embargo violation that needs to be stemmed, In conclusion, the Group regrets a general lack of cooperation by all parties, including transporters, with its investigations in the gold sector. Since 2008, the Group has been informed several times that gold trafficked out of Burundi and Uganda is being hand-carried on commercial airlines, notably Emirates Airlines, Kenya Airways and Ethiopian Airlines and that those involved in the gold trade. The Group has written several official requests since 2008 to seek the cooperation of all three airlines as well as the Kenyan, Ethiopian and UAE governments to facilitate access to cargo and passenger manifests. The Ethiopian authorities have systematically ignored the Group’s requests for information since 2008. Emirates Airlines was unable to work the Group as it never obtained authorization from the UAE authorities. Aftter several follow-up requests, Kenya Airways identified a focal point to assist the Group but failed to concretely offer meaningful cooperation, and cited the inexistence of data protection laws in Kenya as a reason not to provide the requested information.

Cassiterite

Internal buying networks

164. The FDLR continue to have access to considerable reserves of cassiterite, (as well as coltan and wolframite), in parts of South Kivu (especially Mwenga and Uvira territories) and North Kivu (particularly Walikale), despite FARDC military operations. The Group has focused its attention on the cassiterite trade which it estimates feeds back the most revenues back to the FDLR out of cassiterite, coltan and wolframite. The Group calculates that the FDLR could earn up at least several hundred thousand dollars up to a few million dollars a year from this trade.

165. The Group also established that MDM, WMC, Etablissment Muyeye, and Panju, mineral-exporting businesses cited in S/2008/773 for knowingly purchasing minerals from FDLR controlled areas, have continued throughout 2009 to trade in minerals originating from some of the same FDLR-controlled areas. The Group has obtained several pieces of documentation that corroborate such information. The Group also has obtained documentation showing that Huaying Trading Company (HTC), a Chinese-run comptoir based in Goma and Bukavu, as well as a trader closely linked to Clepad, another Goma-based comptoir, also source cassiterite that originates in FDLR-controlled areas in South Kivu. These comptoirs are amongst the major exporters of cassiterite in eastern Congo.

166. The Group obtained documents dated from 2008 (see S/2008/773) showing that MDM was run jointly by Mudekereza Namegabe, the president of Fédération des Entreprises du Congo (FEC), along with Michel Defays and Edouard Kitambala. MDM shares the same compound in Bukavu with WMC, another comptoir which is also run by Mr Defays and Mr Kitambala. According to a written statement by Mr Defays, MDM was financed by WMC until the company directors decided to suspend the activities of MDM in 2009. WMC have taken over the staff members of MDM and continues to export. Panju is run by Panju Zulfikar Ali, a Bukavu-based businessman. Etablissement Muyeye is run by Muyeye Byaboshi, another Bukavu-based businessman. HTC is a Chinese comptoir represented in Goma by Wang Xiaoming. Clepad is also a Goma-based comptoir run by Patrick Nkuzi and Clemence Nkuzi, according to government mining authorities.

167. Mr Namegabe and Mr Kitambala have made public announcements and issued statements that they have temporarily suspended the activities of their respective comptoirs, Groupe Olive and MDM. According to documents obtained from the Centre d’Evaluation, d’Expertise et de Certification (CEEC), a government mining agency in Bukavu, Group Olive and MDM have stopped registering any purchases of cassiterite from South Kivu since June 2009.

168. The Group has, however, obtained specific evidence that MDM has continued to purchase minerals from FDLR mines such as Kitopu and Miki which were sold at the market in Lemera since January 2009. The Group has also obtained documentary evidence that Muyeye, HTC and “Faustin”, a trader who supplies Clepad and MDM, also bought from these particular mines at Lemera market.

169. In July 2009 the Group visited the town of Lemera, which it had visited in 2008, in order to assess the flow of minerals through this market town. According to several traders there as well as a government mining document (Annex 54), almost all of the minerals flowing through Lemera were coming from Miki and Kitopu, two mining sites located in the Itombwe forest region. Several FDLR ex-combatants have told the Group in 2009 that Miki and Kitopu, which are remote locations outside the zone of influence of the FARDC, are two of the principle mining zones controlled and taxed by the FDLR in Uvira territory, South Kivu. Traders in Lemera told the Group that FDLR elements frequented Lemera market while mining officials have confirmed to the Group that the FDLR still transport cassiterite to Lemera from Miki through intermediaries, now that the FARDC has reinforced the control of the town. Several traders consistently informed the Group that Bukavu-based traders were buying from Lemera on market days.

170. The Group obtained government documents at Lemera signed by the same government mining official who signed documents obtained in the provincial government headquarters in Bukavu. These documents showed dozens of purchases of cassiterite sourced from FDLR-controlled zones, notably Miki and Kitopu. According to these documents, the purchase of these minerals, which amount to tens of thousands of kilograms of cassiterite over a five-month period, were made by MDM, HTC, Muyeye and Faustin. The Group annexed a sample of these documents obtained from both Lemera and Bukavu (Annex 55) and archived the rest at the United Nations.

171. Mr Namegabe, Mr Kitambala and Mr Defays have declared that such purchases are probably made by fraudulent inviduals in the name of their companies, and then delivered to other unlicensed businesses. The Group however verified with a company employee of Mr Namegabe and government mining officials who informed the Group that Mr Namegabe and Mr Kitambala still work in collaboration and export the material through WMC. The Group has also obtained a document from South Kivu’s provincial mining ministry showing that MDM made a purchase as late as September 2009, although mining officials insisted they had made a mistake, and had intended to book the purchase in the name of WMC (Annex 56)

172. The Group has also confirmed that Mr Muyeye processes his minerals at SOCOMI, a company in Bukavu run by Ketankumar Kotecha, whose other company Afrimex was cited in S/2008/773 for having purchased cassiterite from Mr Muyeye. Mr Kotecha informed the Group in 2008 that his company Afrimex had ceased mineral purchasing activities. However, the Group obtained a document signed by the South Kivu provincial minister of mines, Colette Embenako, asking the minister of mines in Kinshasa to approve an application for an operating license pending from June 2008 for SOCOMI. (Annex 57). The Group visited SOCOMI’s premises in Bukavu in October 2009 and found employees of Muyeye processing minerals there. The Group was later given a contract by one of Mr Muyeye’s managers, signed by SOCOMI in June 2008 (Annex 58) giving permission for Mr Muyeye to use SOCOMI’s treatment machines. The manager told the Group that SOCOMI was not exporting material, but only processing Mr Muyeye’s material. Cassiterite traders in Bukavu who sell to Muyeye have told the Group that Mr Kotecha helps export material for Mr Muyeye.

173. The Group furthermore obtained several government mining documents showing purchases of a few tones of cassiterite in 2009 by Panju from Miki in the Itombwe region as well as the Hombo region, where FDLR are also known to dominate the minerals trade in nearby areas. The Group has annexed some samples of the documentation (see Annex 59) and archived the rest at the United Nations. Mr Panju acknowledges he has indeed purchased small quantities of minerals from these and other areas controlled by the FDLR, but insists such purchases were made erroneously by his staff members.

Exports to international markets

174. The Group has gathered information on a number of international buyers who are responsible for taking the material purchased by the comptoirs. The Group has obtained documents and confirmation from HTC and WMC that these companies sell their material to the Malaysia Smelting Corporation (MSC). The Group obtained documents proving that HTC also sells to a company known as African Ventures Ltd, which is a Samoan-registered company with a Hong Kong address (see Annex 60). The Group has been informed by Congolese mining agents, as well as international buyers of cassiterite, that Mr. Muyeye also supplies African Ventures Ltd.

175. The Group has been informed by several international buyers that African Ventures Ltd operates as a middleman for Chris Huber. Mr Huber is a Swiss businessman who has been widely cited by various government officials and in public reports as having been involved in the large-scale transport of coltan out of the DRC and Rwanda during the period of the Rwandan-backed RCD-Goma rebel occupation in eastern DRC during 1998-2003. During this time Mr Huber worked with Rwanda Metals, a company then managed by Tri-Star Investments, a company which was in turn set up by the Rwandan Patriotic Front (RPF).

176. The Group contacted Mr Huber, who explained in writing that he acts as a “consultant” for African Ventures Ltd in Hong Kong. The Group has confirmation that Mr. Huber is also a consultant for a company called Refractory Metals Mining Company Ltd (RMMC), which is based at Shing Wan Road in Hong Kong, the same street as African Ventures Ltd (Annex 61), and which is a known supplier to the Thailand Smelting and Refining Company Ltd (Thaisarco), held by Amalgamated Metal Corporation (AMC), a UK entity. The director of Refractory Metals Mining Company Ltd is John Crawley, who is also a director of the tantalum processing company, Niotan Inc, in Nevada, USA. Mr Crawley confirmed that Mr Huber works for RMMC.

177. The Group also gathered evidence that Mr Huber also sources material obtained from companies with close ties to FARDC officers drawn from the former CNDP and who are in control of mining areas in Walikale and Kalehe territories. These relationships, as well as the web of companies linked to Mr Huber and Mr Crawley, are further explained in paragraphs 214 to 215 and the box below these paragraphs.

178. The Group has viewed company and government mining documents which show that Clepad exports its material primarily to Trademet, a Belgian company cited in S/2008/773. Mr Panju has told the Group he has exported primarily to Thaisarco and to MSC.

B. Exploitation of Natural Resources by CNDP networks and the FARDC

200. Subsequent to the rapid integration process and Kimia II operations, several mineral rich areas, some of which were previously occupied by the FDLR, have come under the control of FARDC units. Two of the most lucrative mining sites, notably the Bisie mine in Walikale territory and mining rich zones in Kalehe territory, are controlled by FARDC units which are composed almost exclusively of former CNDP units. The Group has focused on these two cases, although it has obtained information of other areas that have come under the control of former CNDP units, notably remote parts of Shabunda province near the Kahuzi Biega park.

Walikale territory, North Kivu

201. Since March 2009 the Bisie mine in Walikale, which provides approximately 70 percent of the output of cassiterite of North Kivu, has been under the control of units responding to former CNDP hardliners operating within the FARDC’s 1^st integrated brigade. The Group has confirmation from military officials, miners and traders in Bisie, mining officials and demobilized ex-CNDP elements that a part of government taxation revenues and part of the production from the mine have been controlled directly by Lt Col Hassan “Shimita” Bin Mashabi, an ex-CNDP officer working for the FARDC under the 1^st integrated brigade. This unit has been commanded by Lt Col Antoine Manzi until September 2009 and subsequently by Lt Col Yusuf Mboneza, both of whom are former CNDP officers. Col Manzi is cited in paragraph 182 of this report in connection with impeding demobilization of combatants. Lt Col Bin Mashabi has been cited by a demobilized CNDP element in a MONUC report in August 2009 for having attempted to re-recruit him in Gisenyi, Rwanda. The demobilized element alleged Lt Col Bin Mashabi had demanded he return to Walikale.

202. The Group has obtained a document issued by a local government official in Walikale detailing how Lt Col Bin Mashabi took control of the mine (Annex 66). The Group has obtained documents and testimonies from government mining officials in Walikale claiming that out of every 2,000 Congolese Francs taxed on each 50 kilogram sack of cassiterite mined, 1,000 Francs are given to security officials, and 30 to 40 percent of that sum goes to the FARDC (Annex 67). The Group estimates that the local military commanders at Bisie can therefore earn up to 60,000 US dollars per annum from these taxes, based on industry estimates of an average of 500 tonnes a month of production from Bisie.

203. A number of industry interlocutors informed the Group that since February 2009, they have been unable to access as much cassiterite as in the past from Bisie. The same industry interlocutors have been informed by military elements at Bisie and Walikale that this is due to an escalation in fraud at Bisie, a lack of control being exerted by civilian government officials at the site, and the orchestrated mining and transport of large amounts of minerals in complicity with business networks profiting from the militarization of the mine. Contrary to previous years when most cargoes from Bisie and Walikale were flown from an airstrip to Goma, industry sources report that a larger proportion of cassiterite than before is being evacuated by truck in large volumes from trading centres near Bisie and Walikale and taken by newly completed roads in a circuitous route to Kisangani, then Beni, Butembo and Goma, before being trafficked into Rwanda. DRC Government mining and customs officials also report that fraudulent exportations of all minerals cargoes from DRC have escalated in the last year.

204. A number of minerals exporting houses in Goma have taken advantage of the militarization of Bisie mine and the lack of government controls on the flow of minerals.

205. The Group has also been informed by mining and military officials that the brother of Lt Col Bin Mahsabi, known as Faustin Ndahiriwe, has also been trading cassiterite produced on behalf of the ex-CNDP officers based at Walikale. Mr Ndahiriwe is well known by the business community in Goma, having worked in the minerals trade since 1998 for Amos Golan, an Israeli businessman and former military official who was the honorary consul for Uganda in Israel when the Group verified this in September 2009. The Group has annexed Mr Ndahiriwe’s identification documents and his government-issued trading license (Annex 68), which an ex-bodyguard of Lt Col Manzi correctly identified as belonging to Mr Ndahiriwe, whom he also identified as the brother of Lt Col Bin Mashabi. The Group has obtained a picture of bagged minerals taken near Bisie mine in Mr Ndahiriwe’s name (Annex 69). The Group has also met Mr Ndahiriwe.

206. The Group has established that Mr Ndahiriwe has directly supplied a number of businesses in Goma with cassiterite, and in particular three exporting houses, or comptoirs: Hill Side, SODEEM and Pan African Business Group (PABG). The Group obtained documentation from all these three companies showing they have purchased cassiterite from Mr Ndahiriwe in 2009 (Annex 70). Mr Ndahiriwe confirmed that he is prefinanced by some of the comptoirs in Goma although he did not specify which ones.

207. Hill Side is a company owned and operated by Claude Ntuyenabu, a prominent businessman in Goma. SODEEM is a company owned and operated by Modeste Makabuza who, according to many CNDP members interviewed by the Group, has been an important supporter of the movement in the past. Pan African Business Group is owned by a group of Congolese and Russian businessmen and which is majority held by Novosibirsk Integrated Tin Works, a Russian company.

Hill Side

208. Hill Side has reported that between January and end-April 2009, it purchased only 7,530 kilograms of cassiterite from Walikale (Annex 71). However the Group has records of exports from aviation documents showing that between 22 April and 23 April 2009 alone, Hill Side recovered 5,300 kilos of material from Walikale (Annex 72), almost three times the amount given officially by Hill Side for its purchase on 23 April 2009, as detailed in Annex 71. The Group has also obtained separate statistics of purchases made by Minerals Supply Africa (MSA), a Rwandan company licensed to operate by the Rwandan government (Annex 73) and owned by UK businessman David Bensusan, and which show that Hill Side provided MSA 185,690 kilograms between January and April 2009, almost 25 times the amount Hill Side officially declared to the DRC authorities as having purchased throughout the DRC during the same period. According to official DRC government statistics obtained by the Group, Hill Side has generated exports worth only 117,340 kilograms of cassiterite up to the end of September 2009, and has sent them to Minerals Supply Africa. However according to internal statistics for Minerals Supply Africa, it has imported 360,565 kilograms from Hill Side from January to the end of September 2009, more than the double that the amount recorded by official DRC statistics. Mr Bensusan informed the Group that he prefinances comptoirs in Goma, including Hill Side. The computerized statistics obtained from Minerals Supply Africa have been archived at the United Nations.

209. Mr Bensusan claimed that roughly 30 percent of what he exports normally is sourced from Rwanda and the rest is sourced from the DRC. The Group has nevertheless obtained certificates of Mr Bensusan’s exports from Rwanda this year, all but two of which are documented as having Rwandan certificates of origin, and which are destined as material eventually purchased by Cronimet, a Swiss based company which has a shareholding interest in Minerals Supply Africa according to Mr Bensusan and Cronimet. The 42 certificates of origin give Mr Bensusan’s total exports from Rwanda to Cronimet from January 2009 to mid September 2009 at approximately just over 1,000,000 kilograms. The Group has further evidence on other fraudulent sales of minerals to Mr Bensusan, and is investigating whether these are also linked to Walikale. A sample of the certificates of origin for exports from Minerals Supply Africa to Cronimet has been annexed, and the rest archived at the United Nations (Annex 74).

210. Cronimet provides all Mr Bensusan’s production to Thailand Smelting and Refining Company (Thaisarco), held by Amalgamated Metal Corporation (AMC), a UK entity which has been mentioned earlier on in this report in the section on FDLR minerals trafficking.

SODEEM

211. Government mining officials and SODEEM representatives have calculated that SODEEM has exported officially 291,200 kilograms of cassiterite between January and September 2009. Mr Makabuza and his company representatives say that they are not aware of the identity of Mr Ndahiriwe. Alexis Makabuza, the brother of Modeste, has transported Mr Ndahirwe’s cargoes from Walikale through his aviation company Stellavia (Annex 75), which has delivered material to SODEEM. Mr Ndahiriwe has also used other aviation companies such as Doren, MPC, Air Kasai and particularly Safe Air to transport his material.

212. The Group was informed by several DRC-based traders and government officials that one of the biggest minerals traders operating fraudulently near Bisie in Walikale, as well as in many parts of South Kivu controlled by the FDLR, is a trader called Frederic Mastaki Lubamba, alias “Senegalais”. The Group was present when a DRC government official called Mr Lubamba on speakerphone, and Mr. Lubamba confirmed that he had sold nearly all his production to SODEEM. The Group corroborated this from internal SODEEM documentation which marks “Senegalais” as a major supplier to SODEEM (Annex 76).

213. The Group received official documents from government mining agents who stopped a consignment of minerals in Butembo that had been undervalued at a trading site near Bisie and trucked through Kisangani in May 2009 on its way to Butembo and then Goma on behalf of Mr Lubamba (Annex 77). The truck drivers informed the Group that the minerals were sourced directly from the Bisie mine. SODEEM company representatives attribute this incident to corrupt government officials in Bisie who undervalued the goods on local government taxation documents and embezzled the difference.

214. The Group has obtained samples of a government export permit and SODEEM’s internal records indicating that all company purchases are sent to African Ventures Ltd (Annex 78), a company that has already been described in paragraphs 174 to 177 (and annexed) as a front company operated with the assistance of Chris Huber. The Group refers to paragraphs 170 and 174 which also show how African Ventures Ltd has been purchasing from FDLR- controlled areas. As already mentioned, Mr Huber is a Swiss businessman who has been widely cited by various government officials and in public reports as having been involved in the large-scale transport of coltan out of the DRC and Rwanda during the period of the Rwandan-backed RCD-Goma rebel occupation in eastern DRC during 1998-2003. At that time Mr Huber worked with Rwanda Metals, a company then managed by Tri-Star investments, a company set up by the RPF. Mr Huber now acts as a consultant on “Rwanda” or “DRC” and “troubleshooting of serious problems in Africa that cannot be handled by the staff of RMMC” (see Annex 79) according to John Crawley, director of Refractory Metals Mining Company Ltd (RMMC), a company which has an address at Shing Wan Road in Hong Kong where African Ventures Ltd is also based. RMMC is a supplier to the Thailand Smelting and Refining Company (Thaisarco), held by Amalgamated Metal Corporation (AMC), a UK entity). Mr Crawley is also a director of the tantalum processing company, Niotan Inc, based in Nevada, USA.

215. Mr Makabuza denied to the Group that he has any association with Mr Huber, which contradicts several statements received by the Group in the DRC and Rwandan trading industry. The Group also received information from credible sources that at least two of Mr Huber’s Russian associates have been working at one of SODEEM’s properties but were apparently instructed to leave Goma during the period when the Group deepened its research into this matter. One of SODEEM’s founders is Isaac Bigwi Kalima, who is the son of Jean Malik Kalima, one of the top representatives of the private sector mining association in Rwanda (Annex 80).

International company networks related to Chris Huber and John Crawley

The Group established a connection between Chris Huber and a series of companies: African Ventures Ltd, Refractory Metals Mining Company Ltd (RMMC), Niotan Inc, Niotan Ltd and the Thailand Smelting and Refining Company (Thaisarco). In an email to the Group on 16 October 2009, Mr Huber said that he has acted as a consultant to African Ventures Ltd for two years (Annex 81). This company’s address is based at Shing Wang road, in Hong Kong, which is where RMMC is based, according to export documentation that was supplied to Thaisarco (Annex 82). John Crawley, who is a director of RMMC and Niotan Inc (a company based in the USA that specializes in coltan) also informed the Group that Mr Huber is a consultant for RMMC and was “an early investor in Niotan Inc”. Mr Crawley informed the Group in late October 2009 that African Ventures Ltd was “set up” by his father in 2005 and its trading activities are financed by RMMC (Annex 83).

RMMC’s chief executive officer is K.S Jong, who signed a document renaming Niotan Ltd. The company was renamed RMMC (Annex 84). The decision to change Niotan Ltd’s name to RMMC was shared with representatives of Thaisarco in an email sent on 22 January 2009, which copied in Mr Jong and Mr Huber (Annex 85). Mr Huber has told the Group that RMMC used to supply all its minerals to Thaisarco and that he had a nine year business relationship with Thaisarco. Mr Crawley referred to one of Mr Huber’s main responsibilities for RMMC as “liaison with Thaisarco”, operating in Rwanda and DRC and “troubleshooting of serious problems in Africa” (see Annex 79 again).

Congolese suppliers of African Ventures Ltd have given the Group different names of representatives working for African Ventures Ltd, including Peter Wong, based in Hong Kong, Peter Markusy and Abdud Samaad, a freight agent operating out of Mombasa. Mr Crawley has informed the Group in writing that the owner of African Ventures Ltd is “a person from China” and that the company has “no common shareholding to RMMC”. Prior to these admissions Mr Crawley had told the Group that he had very little knowledge of African Ventures Ltd. Mr Crawley is on the executive committee of the Tantalum and Niobium International Study Center (T.I.C.) and the working group for the development of a transparency program in the following groups: a) the T.I.C, b) E.I.C.C (Electronic Industry Code of Conduct Implementation Group) and c) GeSI (Global e-Sustainability Initiative).

Following the Group’s inquiries, Thaisarco has told the Group that it will be suspending all its purchasing activities from RMMC. Mr Huber has sent a statement to the Group, insisting that RMMC has “made every effort” to conduct appropriate due diligence on purchases of minerals from the DRC.

[...]

Competition for control of Bisie mine

217. The Group concludes that the above cases represent an overall pattern of systematic exploitation of the Bisie mine and fraudulent minerals exports by networks linked to military officials drawn from the former CNDP who have resisted the repatriation of foreign elements in their ranks..

218. The Group also notes the joint participation in the militarization of Bisie mine of a number of FARDC officials along with remnants of the 85^th non-integrated brigade that had had previously shared mining revenues with Kinshasa DRC government and military officials. The 85^th brigade had previously occupied Bisie mine until being moved out by FARDC/CNDP units.

219. In particular, the Group notes that Colonel Etienne Bindu, the deputy commander of the 8^th military region of North Kivu, has been directly involved in transporting minerals in his name. The Group obtained documents from the RVA in Walikale showing Col Bindu’s name appearing as having moved minerals out by air (Annex 87) in 2009. The Group also obtained a number of documents showing Col Bindu has transported several cargoes of cassiterite out of Walikale using Safe Air Company, with the assistance of a Safe Air director “Sadoc”, who is known to also act as a minerals dealer and who regularly supplies Hill Side (Annex 88 and Annex 71). The Group gathered additional documents showing that Mr Ndahiriwe has also used Safe Air company to transport his material (Annex 89).

220. The Group understands that Col Bindu and his direct superior, General Vainqueur Mayala, the overall commander of the 8^th military region of North Kivu, have been part of a wider power struggle for control of the mine that culminated in the massacre of up to 30 people at Bisie on 13 August 2009 perpetrated by FDLR fighters working in conjunction with a Mai Mai leader, Sheka Ntabo Ntaberi, who was previously connected to three companies interested in exploiting the Bisie mine.

221. The massacre took place a few days following the order by Adophe Muzito, DRC’s prime minister, that the Bisie mine should be demilitarized. At a meeting held by Mr Muzito in Walikale with civil society activists, local politicians, mining officials and businessmen on 7 August 2009, some of whom have given testimony to the Group, both Col Bindu and Gen Mayala were reported to have warned the participants that should the mine be demilitarized, it could fall prey to an attack by the FDLR.

222. Witnesses, MONUC officials, and mining, military and intelligence officials reported to the Group that Mr Ntaberi was a key orchestrator of the massacre and worked with FDLR units and remaining units of the 85^th brigade. An FDLR ex-combatant who had been based nearby Bisie corroborated this information. A witness of the attack stated to the Group that the perpetrators were wearing FARDC uniforms. The Group was also informed by FARDC and minerals trading sources that Mr Ntaberi was equipped with a satellite phone provided to him by Col Bindu.

223. Mr Ntaberi is a well known figure in the mining community. He had previously been part of an association called Groupe Minier Bangandula (GMB), a cooperative of local businessmen in Walikale working with Alexis Makabuza to exploit Bisie mine (Annex 90). GMB had collaborated with COMIMPA, a local artisanal mining association in Walikale that claimed it has rights to mine at Bisie mine. Mr Ntaberi was a founding member of COMIMPA (Annex 91) although he ended his relationship with COMIMPA on bad terms in early 2009 and began championing the interests of Mining and Processing Congo (MPC), a company with operations in the DRC and Rwanda, held by Kivu Resources (shareholding structures available at www.kivuresources.com), and which has an exploration permit covering the Bisie mine.

224. GMB and COMIMPA have had various legal disputes with Mining Processing Congo (MPC), which maintains the view that COMIMPA has been trying to encroach onto its property. COMIMPA has maintained that MPC has exploration rights only, and that COMIMPA is therefore allowed to work at the Bisie mine in accordance with mining regulations governing artisanal producers.

225. During the course of 2009 COMIMPA had partnered up with Oakridge Business Solutions, a UK and South African registered company that has bid for government IT projects in Rwanda, and which is run by Andre Van Zyl, a South African businessman. Oakridge Business Solutions had originally prospected to work in partnership with COMIMPA in exploiting gold deposits in the Oninga area of Walikale territory, but had then signed a Joint Venture contract to exploit the Bisie mine with COMIMPA.

226. The Group confirmed that Mr Ntaberi defected from COMIMPA and started publically promoting MPC’s interests in 2009, whilst making a number of anti-Tutsi political statements. The Group also met Mr Ntaberi at MPC headquarters in Goma in early 2009. MPC representatives say they had tried to persuade Mr Ntaberi not to create any disturbances after he was barred from meetings held between COMIMPA and Oakridge.

227. The Group has confirmed that since the 13 August 2009 massacre, FARDC-CNDP troops, including those under the command of Captain “Zidane”, have reinforced their position at Bisie. Gen Mayala in September wrote to a local official in Walikale promising to remove Captain Zidane (Annex 92), but at the time of the drafting of the report in mid October 2009, had failed to do so. In an email to the Group on 22 October 2009, Mr van Zyl informed the Group he intended to continue his work with Oakridge and COMIMPA at Bisie and the DRC authorities had returned his passport after confiscating it for a few weeks.

Kalehe territory, South Kivu

228. The Group received information from mining officials and testimonies obtained during field visits in South Kivu throughout its mandate that troops loyal to Lt Col Zimurinda, formerly of CNDP, have taken over many of the mining zones identified in S/2008/773 as having been occupied by the FDLR. Lt Col Zimurinda has been cited in this report for resisting the demobilization of Rwandan elements within his brigade (see paragraph 182).

229. Several former combatants who deserted from Zimurinda’s ranks confirmed his personalized control of many of the mines in Kalehe. Government officials also informed the Group on 24 September 2009 that roughly 1,500 kilograms of wolframite carried by Lt Col Zimurinda’s officers were intercepted by military officials from Kalehe, and the officers were subsequently released. The officials informed the Group that the minerals were brought to the Goma warehouses of Etablissement Muyeye. The Group obtained documents showing that MDM and WMC were named as recipients of cassiterite coming down to Bukavu from Nyabibwe, a mining zone where FARDC soldiers under Col Zimurinda’s command have also been controlling production (Annex 93). The Group has already explained in paragraphs 166 to 171 and in paragraph 174 the links between MDM and WMC, which is a supplier to the Malaysia Smelting Corporation (MSC). The Group has been informed by various traders and government mining officials that Muyeye is also sourcing cassiterite from this zone. Muyeye, also mentioned above for purchasing minerals from FDLR controlled areas, is a supplier to African Ventures Ltd.

Masisi territory, North Kivu

230. The Group was informed by minerals traders and CNDP sources that MH1, a comptoir run by Senator Eduoard Mwangachuchu and cited in S/2008/773, is also working in collaboration with FARDC-CNDP military officers in his zone of exploitation. Eyewitnesses, mineral trading and CNDP sources have told the Group that MH1’s coltan concession in Masisi, North Kivu, is under guard by armed elements and hosts a number of private arms caches that were not handed in by CNDP military at the time of integration. The Group has documents showing that MH1 supplies tantalum to African Ventures Ltd (Annex 94). Mr Crawley has not been able to identify exactly to whom a recent shipment of coltan from MH1 was sold to and told the Group “I could only guess who will take this material, a Chinese factory most likely”.

IX.Natural Resources

299. According to official statistics from North Kivu and South Kivu between January and September 2009, cassiterite exports have been 3,643,572 kilograms and 7,592,479 kilograms for South Kivu and North Kivu respectively. Coltan exports have been 157,795 and 416,190 kilograms for South Kivu and North Kivu respectively. Wolfram exports for South Kivu and North Kivu during this period have been 64,900 and 449,555 kilograms respectively. The Group does not consider gold statistics are worth detailing, given the scale of the fraud. As already mentioned, the DRC Senate has estimated more than 1.2 billion dollars of gold is exported fraudulently from the DRC every year. All the the above-mentioned statistics should be taken as purely indicative given the number of testimonies the Group obtained from industry and DRC mining ministry sources during the course of this mandate. As explained in prior sections, the Group established that the level of fraudulent mineral exports to neighbouring states has escalated significantly since 2008 and particularly since the rapprochement between Kinshasa and Kigali since January 2009.

301. According to interviewes with individual of the mining industry, the Group understands that operators who export fraudulently have been offering above market prices to control the market, while making back their margins on the savings they incur through avoiding paying official export taxes. [...]

306. The Group notes with concern the deterioration of transparency in some parts of the Kivus. The Group observed that administrative paperwork that was issued to government mining agents in South Kivu has largely diminished in 2009, making it far more difficult to obtain documentary evidence. Important paperwork, such as receipt books issued to mining officials to authorize the transport of minerals from mining sites and trading centres stopped being issued in early 2009 just weeks after the Group’s December 2008 report (S/2008/773) was published. Government officials in South Kivu have said they no longer have the necessary funds to print these books.

307. The Group also observed the sudden proliferation of gold exporting houses that are applying for licenses with the DRC Government even as the control of gold resources is continues to being used a means of financing for armed groups. [...]

Recommendations

Illegal exploitation of natural resources and financial support to non-governmental armed groups

6. The Group recommends that the Security Council request Member States to take necessary measures to clarify the due diligence obligations of companies under their respective jurisdictions which operate in the DRC mineral trading sector. The Group further recommends that Member States request companies to adopt codes of conduct detailing the procedures adopted to prevent indirect support to non-governmental armed groups through the exploitation of natural resources.

7. The Group recommends that the Sanctions Committee request the DRC authorities to issue or reinstate paperwork produced by the Division des Mines which detail the exact origin of the minerals at the time of purchase and ensure that Congolese exporting companies maintain written and documented evidence of every delivery of minerals to their warehouses. The Group further recommends that exporting and buying companies should never accept verbal assurances from their suppliers regarding the origin of minerals without credible, supporting documentation.

8. With respect to transparency and traceability initiatives at the level of regional governments and the industry, the Group observes that while both serve as a good basis for improved governance and transparency of the natural resources sector in the long-term, the current security situation in the mining areas of eastern DRC requires a prior effort to ensure demilitarization of mining sites, reduction of customs fraud and illicit mining activities under DRC law. With respect to the ITRI initiative, the Group notes that it does not provide an independent mechanism to ascertain the origin of minerals in its current state. Strengthening the institutional capacity of DRC mining authorities as well as law enforcement agencies are essential preconditions to create a suitable environment in which to create regional and international transparency mechanisms. In the short term, the Group recommends that the Security Council endorses the establishment of an independent monitoring team by the DRC authorities, with the support of the international community. Such a team would have a mandate to conduct spot-checks of mineral shipments, in cooperation with MONUC and the Group of Experts, and would act on the basis of a clear definition of what constitutes an illegal trading activity. Specific sanctions for illegal mineral trading activity should also be identified.

9. The Group recommends the Sanctions Committee request the Government of the DRC to take all necessary measures to reduce and eventually remove the presence of military units at mining sites, i.e., by replacing the FARDC with the relevant governmental authorities such as the already existing Police des Mines et des Hydrocarbures and relevant units of the Division des Mines. The creation of a national tribunal to prosecute the abuse of military and police powers in connection with the illicit exploitation of natural resources is also recommended.

10. The Group recommends that the Security Council and Sanctions Committee request all States in the Great Lakes region to immediately publish their full import and export statistics for gold, cassiterite, coltan and wolframite and centralise them in a body chaired by an independent auditor mandated to verify any statistical anomalies.

11. The Group recommends a simplification of the current DRC customs regime towards a single customs authority, or guichet unique, which should levy export taxes and publish them under one integrated system.

12. The Group recommends that the Sanctions Committee call on the DRC authorities to suspend the trading licenses of all non-compliant national companies and take legal action against the directors of those companies which violate the UN arms embargo by trading in minerals sourced from non-governmental armed groups.