Painting by Cheri Samba

Lokuta eyaka na ascenseur, kasi vérité eyei na escalier mpe ekomi. Lies come up in the elevator; the truth takes the stairs but gets here eventually. - Koffi Olomide

Ésthetique eboma vélo. Aesthetics will kill a bicycle. - Felix Wazekwa

Thursday, August 26, 2010

The vulnerable link in the minerals trade: Banks

Some of us have been wondering how this hue and cry and conflict minerals will actually impact the trade in the Kivus. Some, including myself, have suggested that the pressure in Europe and the US will just displace the trade to Asia, where companies care less about their human rights records.

We may have been wrong. Sources from within the industry indicate that the Malaysia Smelting Corporation - one of the largest buyers of Congolese cassiterite (tin) ore - is having a hard time getting lines of credit from banks for ore coming from Central Africa. The other big smelter, Thaisarco, already had to interrupt its Congolese purchases in August 2009 due to pressure from advocacy groups.

It is the banks, many of which are based in Europe and the US or listed on stock exchanges there, that are getting jittery about the US legislation. In addition, the Electronic Industry Citizen Coalition (EICC), the body that includes the world's largest electronics companies (Apple, Kodak, Philips, Sony, Microsoft, HP, Samsung, etc.), may be taking action of its own soon.

The big question is: Will all this pressure amount to a boycott of the Congo, harming tens of thousands of people involved in the mineral trade as well as the armed groups? Or will donors and the Congolese government take this opportunity to try to press for sustained reforms of local institutions and a better regulation of mining in general? After all, trade could be the engine of development and stability, not just the driver of conflict. The US State Department has been tasked to come up with a strategy. Let's hope for the best.

1 comment:

Anonymous said...

maybe neither. maybe like the Borg, the actors on the ground have not yet had a chance to regroup and adapt to the sanctions and find ways around them. Given the strategic importance of the minerals to the world and the absence of state in Eastern Congo, the markets may ultimately prevail.

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