Tackling drivers of coltan smuggling in the DRC requires holistic solutions
The northeastern part of the country contains deposits of gold, coal and iron ore, as well as coltan – a term derived from the word “colombo-tantalite” which belongs to a group of geochemicals internationally known as tantalum.
Demand is increasing as 5G technology develops, due to the need for low voltage capacitors in the growing telecom industry. Global coltan production was estimated at around 2.3 kilotonnes in 2020 and is expected to grow at a compound annual rate of around 6% between 2021 and 2026. In 2021, DRC’s coltan production was around 700 tonnes metrics. by far the largest producer of coltan in the world.
Despite the importance of coltan to global technological development, the smuggling of this essential mineral into the DRC has remained a persistent challenge for the state according to a new study. Successive administrations of the country, both central and provincial governments, have not shown enough appetite to undertake the policy changes and public commitment to deal with the threat of coltan smuggling. Thus, coltan smuggling is made possible by a range of factors, including porous borders, the protracted war economy, and the cross-border price differential.
The vast expanse of ungoverned space on the DRC’s borders, stretching from Burundi and Rwanda to Uganda, provides an ideal geography for the illicit trade in strategic minerals. Even when state security agents from these countries are deployed to secure the borders, the unscrupulous personnel among them often look the other way when coltan is smuggled. Corrupt Congolese border protection and customs officials are also colluding with the smugglers.
Coltan trafficking is also diverted to Uganda via Bunagana, in Rutshuru territory, North Kivu. Similarly, some of the trade directed to Bukavu is diverted to Burundi via Uvira, in Uvira territory, South Kivu, using the border crossing points of Gatumba and Kavinvira. In one incident, a truck crossing the DRC-Rwanda border was carrying 24 bags of contraband coltan. Evidence from a UN report shows that 10 and 20 kilogram bags of coltan from eastern DRC are being sold by unregistered traders to Rwandan buyers via smuggling routes.
Extended War Economy
In the Great Lakes region, the DRC finds itself at the center of instability that is often described as a transnational war economy. It is a situation in which government officials in search of wealth collude with rebel leaders and international corporations to perpetrate the illicit mineral trade. These actors have a common interest in developing and preserving the war economy.
Most of these ungoverned spaces are naturally endowed with strategic minerals. Warlords created by the Congolese civil wars and the remnants of the Rwandan genocide rebels have unlimited access to coltan deposits.
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They continue to mine the ore and trade it in the legitimate commodity market through corrupt intermediaries. The struggle for control of coltan mines is at the heart of the conflict in eastern Congo, which has claimed more than four million lives over the past decade. State security actors and armed militias all have interests in the lucrative coltan trade. State agents and warlords tax miners for access to mines, making control of sites fiercely competitive.
Cross-border price differential
Coltan smuggling from the DRC thrives due to variations in prices in mining areas and in black markets in northern Katanga, Goma, South Kivu in the DRC and Gisenyi in Rwanda. In 2014, a kilogram of coltan cost $37.50 in Bukavu, $44 in Uvira and $34 in Kalemie. Each of these prices exceeded that set in the mines, which ranged from $28.80 to $40 in Kisengo and Mai-Baridi. In 2015, a kilogram of coltan sold for between 40 and 50 dollars.
Price fluctuations within and across borders played a major role in coltan mining and trade. In 2016, the kilogram traded at a record price of $100 in the DRC. Subsequently, in 2017, the price per kilogram of coltan fell in Congo to $20-$24. While many mineral traders from the Kisengo region of the country are said to have often crossed the border and sold the ore in Kigali, for over $50 per kilo. In 2018 and 2019, the average coltan price was $23.85/kg and $36/kg respectively.
Depending on the percentage of tantalum concentrate in coltan, the ore traded between $35 and $52.50 per kilogram in 2021 in Congo. Conversely, in neighboring Rwanda, coltan traded between $52 and $65 per pound (0.5 kg) in the same year. Thus, price swings contribute to the rise of black markets, fuel broader patterns of cross-border smuggling, and fuel dark trading networks in the coltan supply chain.
Ways to solution
The solution to coltan smuggling cannot come from the DRC alone. The approach should be multi-pronged involving national government, multilateral partnerships and the business community.
The central government should take initiatives to ensure the establishment of coltan refining plant(s) in North and South Kivu in line with broader national and provincial development plans to reduce the propensity for illicit cross-border trade in coltan. coltan.
This can be done through joint ventures with foreign and local investors subject to existing legislative frameworks to rid these partnerships of potential corruption. The State should fight border corruption among security officers by simplifying and harmonizing procedures, encouraging the use of new technologies and focusing on organizational and institutional development by improving the well-being of border personnel. .
Upstream and downstream companies engaged in the coltan trade should improve traceability by tracking specific information on the mine of origin, extraction methods, quantity purchased, date of purchase, places of trade, the intermediaries engaged to transport the minerals and the actual transport routes. .