US ‘conflict minerals’ law bad for Africa-Tech firms

Children at an open mine. The supply chain for “conflict minerals” is long and complex, making it difficult to prove that the materials did not originate in areas under DRC rebel control. Photo/AFP

Representatives of American high-tech industries are warning that a law intended to promote peace in the Democratic Republic of Congo could result in a “de facto embargo” of minerals mined in many African countries.

But the Obama administration as well as Africa-focused activist groups are defending the law known as the Dodd-Frank Act in honour of its two main sponsors in the US Congress.

The law requires US companies making use of four minerals — tin, tantalum, tungsten and gold — to demonstrate to US regulators that they have sought to ensure that the imports are not helping finance rebel groups in the eastern DRC. Congo itself is a significant but not irreplaceable source of these metals, industry analysts say.

But Dodd-Frank applies to imports of the four minerals not only from the DRC but from the nine neighbouring countries, including Tanzania, Uganda, Rwanda and Burundi.

The supply chain for these “conflict minerals” is so long and complex that there is at present no way for American tech companies to prove that the materials did not originate in areas under DRC rebel control, said Rick Goss, a spokesman for the US Information Technology Industry Council.

Tantalum is particularly important to makers of consumer products such as mobile phones and laptops.

But Dodd-Frank requires companies such as Microsoft, Intel and Hewlett-Packard to show that comparatively small imports of the other three listed minerals also did not originate in areas where an estimated five million Congolese have died as a result of chaotic violence during the past 15 years.

For these reasons, Mr Goss warned last week at a think-tank forum in Washington, US tech firms could initiate a “de facto embargo” of mineral imports from eastern and central African countries that make up about 40 per cent of the continent’s land mass.

“There are hundreds of thousands of people, perhaps more, in central Africa who rely on mining and related activities as their sole source of income,” Goss said at the Centre for Strategic and International Studies.

Dodd-Frank could inadvertently result in them having “no income whatsoever,” added the tech industry council’s vice president for sustainability.

The battle over Dodd-Frank is escalating at present even though it became law months ago. Rules needed to implement the conflict minerals measure were supposed to be promulgated at the end of March