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Both sides of Congo war get funds from sale of minerals used in mobile phones.
A Nevada-based company’s purchase of minerals looted from eastern Congo is helping to finance a decade-long war that has claimed the lives of millions of civilians, an unpublished United Nations report claims.
Niotan Inc., of Mound House, Nev., is the first American company to be identified as a buyer of conflict minerals from the Democratic Republic of Congo (DRC). It is one of several companies cited in the U.N. study on how the illegal trade of the region’s vast mineral resources, including gold, has kept the war going by enriching both rebels and Congolese army units.
Many of the rare minerals are needed to make mobile phones and other consumer electronic devices.
Also benefiting from the looted minerals are businessmen in Uganda, Rwanda, Burundi and the United Arab Emirates, as well as weapons suppliers from Sudan and North Korea, whose arms are purchased by rebels with the proceeds of the illegal mineral sales in violation of a U.N. arms embargo, the report says.
But companies far from the war zone, like Niotan in Nevada, are profiting, too, the report says. Mobile phones and gold jewelry sold in the U.S. may well have helped finance a war in which at least 200,000 women have been raped, according to U.N. statistics.
The U.N. report, which GlobalPost has obtained, says Niotan buys and sells the mineral coltan, used to make electrolytic capacitors for mobile phones and personal computers. The report details a four-step process by which the minerals move from the killing hills of eastern Congo to American electronics manufacturers.
(Read more about the supply chain by which minerals become the cell phones. Also, watch the video below about what life is like for a freelance miner in Congo.)
The damning report is expected to be officially published in about two weeks. It is being translated now into the U.N.’s five official languages. On Monday the Security Council voted to extend sanctions on individuals and groups in Congo that are selling the minerals but the U.N. has not yet extended the punitive measures to buyers.
The report says that Niotan buys from three war-zone suppliers — Chinese-run Huaying Trading Company (HTC), Bukavu-based World Mining Company (WMC) and Etablissement Muyeye, one of the biggest minerals trading houses in Bukavu. These groups get their minerals from areas of South Kivu province controlled by the FDLR rebel group, the report says.
HTC, WMC and Muyeye sell their minerals to Hong Kong-based African Ventures Ltd., run by John Crawley, director of Nevada-based Niotan. Crawley did not return a call seeking comment. The report said Crawley initially told U.N. investigators that he had little knowledge of African Ventures, before admitting that his father had set it up in 2005.
A second company run by Crawley, Refractory Metals Mining Company Ltd. (RMMC), originally named Niotan Ltd., is located on Shing Wan Road in Hong Kong, the same street as African Ventures. Refractory Metals ships the minerals to Niotan in Nevada, according to a separate investigation by the advocacy group Enough, which runs an anti-genocide project at the Center for American Progress.
Niotan imported 31.8 tons of tantalum ore from Refractory Metals in 2009, according to shipping records obtained by Enough, one dated as late as Oct. 31. Niotan is a “significant supplier of tantalum powder” derived from the coltan for the U.S. electronics industry, Enough said.
Niotan Inc. is a private company that employs from five to nine people in Mound House, Nev., and has annual estimated revenues of $5 million to $10 million, according to Hoover’s Business Directory.
Refractory Metals also supplies coltan to Thailand Smelting and Refining Company Ltd. (Thaisarco), owned by Amalgamated Metal Corporation (AMC) of the U.K. After significant pressure from advocacy groups, AMC said in September that it would discontinue importing minerals from the DRC after its present contracts run out.
John Prendergast, co-founder of Enough, called for the imposition of sanctions “on those that have been named in the U.N. experts report” and he urged the U.N. to take “tangible steps to exclude conflict minerals from the supply chains of electronics and jewelry products.” (Read an opinion piece by Prendergast.)
In extending its sanctions for another year this week, the U.N. Security Council said in a resolution that it was up to governments to police their own companies. The resolution did not name any companies or governments, as the report does. But it does set up guidelines for governments to follow to police their own companies.
U.N. member nations are asked to “ensure importers, processing industries and consumers of Congolese mineral products under their jurisdiction exercise due diligence on their suppliers and on the origin of the minerals they purchase.”
Nations are to turn over to the U.N. details of their licensing requirements and national legislation and to regularly publish import and export statistics for gold, cassiterite, coltan and wolframite. The resolution asks countries to give technical help to the DRC’s mining industry, law enforcement and border control.
David Sullivan, a researcher at Enough, said companies continue to buy conflict minerals because they are about half the price as elsewhere in the world. He said eastern Congo provides about 10 to 25 percent of the world’s supply of tantalum made from coltan.
Susan Rice, the U.S. ambassador to the U.N., told reporters the U.S. would work with the U.N. to “prevent the continued illegal exploitation of Congo’s minerals, including its gold, which is funding the rebels and the fighting in Congo.”
But Rice did not specifically say what the U.S. planned to do to stop companies like Niotan from buying conflict minerals.
“It is a more complicated task than, for example, the Kimberly Process with diamonds, where diamonds are obviously very readily identifiable by their source of origin,” she said. The Kimberly Process has been an international effort since 2003 to curb the export of diamonds that have fueled several West African conflicts.
“We will continue to work … from the context of our policy in the region to look for opportunities to constrain that trade,” Rice said. Earlier this month the Conflict Minerals Trade Act of 2009 was introduced in the House of Representatives aimed at ending the trade in these minerals from the DRC.
The Congo war began after remnants of the Hutu militia that perpetrated 1994 genocide in Rwanda fled over the border into the eastern part of the Democratic Republic of Congo. Uganda and Rwanda invaded eastern Congo to pursue them.
The war has largely devolved over the past decade into a free-for-all for gold and other minerals, with renegade army units selling arms to rebels who both employ violence and massacres to maintain the instability in which the illegal trade thrives.