Global Witness’ Latest Silly Suggestion About Conflict Minerals – by Tim Worstall (Forbes Magazine – September 24, 2013)

There are times when the actions of do-gooders makes me want to kneel down and weep bitter tears of pain. One such is the latest proposal from Global Witness on the subject of conflict minerals. They’ve decided that one particular program, one massively expensive and destructive of human wealth, should not be curtailed, adjusted or made more efficient: no, they’ve decided that it should be expanded. Forgive me for having rather strong views on this but it’s all happening in a corner of my working world and I can see what they’re doing wrong.

The background is over the use of conflict minerals in the supply chain. Conflict minerals are those coming from war torn areas of the world and it’s most certainly true that we’d like everyone to stop using minerals mined using slave labour, rape to keep people in line, minerals where the profits go to feed the armed gangs that control those mining areas. I agree with this aim and desire: it’s the methods proposed to achieve this goal that are so dire that they cause that pain in me.

For the latest suggestion is that the European Union should bring in regulations similar to those in Dodd Frank. This would require all companies to investigate their supply chains and thus check on whether they, or any of their suppliers, are using said conflict minerals. The problem with this being that this is a vastly expensive method of reaching this mutually desired goal.

A little history: Global Witness and the Enough Project launched a campaign to get something done about the use of such conflict minerals. The focus was upon smartphones and their use of four metals: tantalum, tin, tungsten and gold. The major concern was over the artisanal mining of these metals in DR Congo (formerly Zaire). The Enough Project floated around the idea (they claim was that this was an industry estimate of the costs) that such a checking of the supply chain would cost around one cent per item finally manufactured. And let’s be honest, one cent on the price of a smartphone to know that some starving child has not been worked to death to make it seems worthwhile. Given a billion or so phones sold a year (not an exact number, but the right order of magnitude for smart- and feature- phones) this would give us a cost of $10 million a year or so.

A sound investment in a more ethical world.

The industry itself proposed a pretty simple system to organise this. I know (no, I have no business relationship with any of them, I know them as background to the work I do in my day job) some of the people involved in doing some of the work on this. The result is this.

The basic idea is that the minerals dug up by these armed and criminal gangs aren’t in fact much use to anyone as they are. They must be processed in a factory and we usually call such factories “smelters”. That’s what turns the ore into the metal that is then used to make the actual products that we purchase: tantalite becomes tantalum, wolframite becomes tungsten, cassiterite tin and so on. The important point to realise is that there are a limited number of such smelters around the world. Certainly fewer than 500 places where any of these minerals can be processed into the metals (that’s for any of them, not the number of smelters that can process all three). No more than a dozen that can process tantalite for example, outside China there’s fewer than 20 to process wolframite for tungsten and so on.

The smelters are the natural choke point in this system. Thus the industry proposal was to monitor the minerals coming in to those smelters: as long as we can tell where the minerals are coming from then we will have choked off the ability of the blood soaked criminals to launder their gains. As an example, the German government funded a project at the BRG (rather like the USGS in America) to identify the fingerprints of all of the various mines for these minerals around the world.

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