6TH OECD MEETING / CONFLICT MINERALS, KIGALI, 13-15 NOV 2013
RMA Chairman’s Statement
Theme: Traceability in Rwanda
Distinguished Participants, Ladies and Gentlemen,
I am very pleased today to talk about traceability in Rwanda, where I will try as
much as possible to touch on where we stand today. Over the past few years, one
can realistically say that, there has been enormous progress. The impressive
progress has been made possible by Rwanda’s good infrastructure, significant
mining in 3Ts that dates back to colonial times and the good security. These factors
have from the onset facilitated a test bed for traceability and transparency
initiatives that have registered tremendous success. Examples include;
1. The activities of the German BGR which actually started before 2010 (that
is, before the Dodd-Frank Act came in place, and before the OECD related
requirements): The CTC pilot programme and BGR fingerprinting;
2. Rwanda was the first (and is still the only) country with almost complete
coverage by iTSCi tagging;
3. Electronic tagging (internal system) was introduced by Rutongo Mines;
4. Rwanda fully embraced the ICGLR Regional Certification Mechanism; and
5. The first ICGLR mineral export certificate has been issued to Rutongo
Mines (others will be following soon as the process is ongoing).
Ladies and gentlemen, Traceability in detail is not flawless. There have been some
related problems for some smaller players. But now the system is implemented to
all licensed mining sites. All in all, the program at the moment provides a good
We do not want to downplay the necessity for continuous improvement. One
always can become better. However, it is important to highlight that it is not lack
of traceability which hampers the further development of Rwandese mining sector
and the off take of our mineral production by world-leading western companies,
but the collateral damage caused or (to make it less harsh) the unintended
consequences imposed by the Dodd-Frank Act and the SEC rules.
The Due Diligence and traceability efforts in the Rwandese mining sector make the
output of at least the larger mines fully acceptable for smelters under the Conflict
Free Smelter Scheme. For example, MSC is a CFS compliant smelter fed by
concentrates from Rwanda, covered by due diligence and traceability. So, the
problem is not the acceptance by smelters, but acceptance by the customers of the
smelters. The OECD guidelines have been developed around the idea of the
smelters being the bottleneck – this makes a lot of sense.
In contrast, the SEC rules do not distinguish between perfectly audited material
treated by a CFS-compliant smelter and dodgy material coming “somewhere” from
the covered countries, but rather, it distinguishes merely by origin: As such, a
downstream company having anything from the covered countries in the feed, BE
IT CERTIFIED CONFLICT FREE or not has to;
1. Submit a Conflict Mineral Report; and
2. Undergo 3rd Party Auditing.
Thus, for downstream companies, the covered countries are simply BAD
whatsoever. There is nothing like asking the smelters to make sure that the feed
does not come from the covered countries. That is the de-facto ban. And I have
seen copies of the letter that ask for this outright ban.
So, what is the consequence? The Rwandan mining sector, despite all its efforts
can essentially only sell to the Asian market – at lower prices than the world
market, with less off take security and less opportunity for technical cooperation.
This means also that, transparency and the customers in Europe or the US are
negatively affected. For example, transparency is lost, when the material is
channelled through Asia instead of going through western smelters with direct
customer base in the US industry affected by the SEC rules. Again, products of
foreign brands can be sold on the US market regardless their possible content in
The Rwandan mining industry thus calls upon all the stakeholders in the OECD
process to ensure that traceability and Due Diligence provide unhindered access to
the markets. The material from the covered countries treated by a smelter audited
under the CFS protocol should be accepted as part of conflict free region and not
be considered something of lesser quality/ higher risk. This is something, the
downstream industry expressly does not want in its supply chain.
Ladies and gentlemen, I want to conclude by also calling upon the support from
NGOs. It would be good to have support by the NGOs. Sincerely, it cannot and
should not be in the interest of the miners and consumers that material validated as
Conflict-free cannot find access to the western market and has to go through less
transparent supply chains in Asia.
I want to end by thanking the organizers and I am optimistic that our cooperation
that includes all key stakeholders will continue to make things much better until we
Thank you very much for your kind attention!