01 June, 2014

All that Glitters Is not Gold...

by Virgil Hawkins

...Or emeralds, or diamonds, or cobalt, or tantalum, or platinum, for that matter... On 22 May, Al Jazeera aired a documentary under their People and Power series entitled Afghanistan's hidden gems. The program opened with an optimistic view of the potential role that Afghanistan's as yet insufficiently tapped emeralds, as well as a host of other minerals including copper, bauxite, cobalt, lithium, tantalum, and yes, gold, could play in developing the country. It suggested that their abundance was a “miracle” that could perhaps “lift the Afghani people out of poverty”. But it also went on to show the role of the minerals in financing conflict in the past, the dangerous and impoverished conditions currently faced by the miners, and interested foreign buyers for the minerals.

From the perspective of southern Africa, it all sounds so hauntingly familiar. The Democratic Republic of Congo (DRC) is equally 'blessed' with enormous mineral wealth, including many of the type (and more) found in Afghanistan. The extraction of, and trade in, these minerals have contributed to devastating armed conflict (the worst the world has seen in decades), and conditions for miners remain horrendous. And while the wealth generated has made a small number of multinational corporations, as well as local corporations and government officials exceptionally rich, it has done precious little to lift the Congolese population “out of poverty”.

Tungsten mining in the DRC (Photo: Julien Harneis)

This coming Monday (2 June) marks the deadline for US corporations using minerals potentially associated with conflict in the DRC to submit an audit of their supply chains to the US Securities and Exchange Commission. Apple, Intel and HP are some of the corporations that have already done so. The quality of some of the reports that have been submitted so far have been questioned, and many others are expected to fail to meet the deadline altogether. Repercussions for non-compliance are unclear. But one of the greatest impacts of the legislation that set this process in motion may well be that corporations simply avoid the DRC altogether in procuring minerals (instead of working to improve the situation), which would again serve to deny the opportunity for local growth and development.

But it is not only in conflict-afflicted DRC where enormous mineral wealth has helped enrich already wealthy multinational corporations and some select few (in the public and private sector) in the areas in question, yet has left so little for the wider population. The percentage of royalties paid by multinational corporations extracting copper and cobalt from mines in Zambia, for example, has admittedly risen in recent years, but it remains paltry. And allegations abound of some of these mining corporations falsifying reports detailing the volume of extraction to avoid payment of these royalties. Further south, miners demanding a decent wage continue to strike at Marikana, South Africa, nine months after the massacre there over the same issue. South Africa and Namibia, both exceptionally rich in mineral wealth, have the highest levels of income inequality in the world. In so many cases, in conflict or in peacetime, the wealth benefits a select few, and the bulk ends up leaving the country.

A number of years ago, I spent some time in the DRC's Katanga Province – where much of the country's mineral wealth is concentrated – as a representative of a non-governmental organization. We were investigating the possibilities for establishing poverty alleviation and development projects there, primarily in the health sector. Among the people we spoke to, a fair number treated me, a foreigner, with considerable suspicion. Many thought that the health project was just a cover story, and that I was in fact there to get involved in the mineral business. Some others accepted that I was there on NGO business, but still thought that it was only a matter of time before I discovered how lucrative the mineral business was, and jumped ship. Clearly, the ways in which the mineral wealth is removed from the country (legally and illegally) are many and varied, and equally clearly, the lure of the glittering stones, not least for those reaching in from the outside, is strong.

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