Wagner Trading Chains 2


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  • I would like to present our approach to the implementation of traceability as well as minimum standards in mineral production. We are focusing on the support of artisanal and small scale mining of metals for industrial use. We do not deal with gold, gemstones or jewellery products which are directly linked to end-consumers It is a B2B approach. At present, our regional focus is the Great Lakes region of Central Africa and the metals we are looking at are Tungsten, Tin and Tantalum.
  • Wagner Trading Chains 2

    1. 1. CTC - Certified Trading Chains in mineral production: the present context Markus Wagner BGR – Federal Institute for Geosciences and Natural Resources Brasilia, October 9, 2008 8th annual CASM conference - partnerships
    2. 2. the general problem: illegal mining and trade of mineral resources is a source of finance for violent groups and contributes to regional instability 2 of 25 <ul><li>the general concept </li></ul><ul><li>bilateral projects </li></ul><ul><li>regional partnerships </li></ul>
    3. 3. CTC background 2007 G8 - RESPONSIBILITY FOR RAW MATERIALS: TRANSPARENCY AND SUSTAINABLE GROWTH 86. the artisanal and small-scale mining sector provides important livelihoods to many people in developing countries… these activities often are conducted in an informal manner and do not meet minimum social and environmental standards . <ul><li> (therefore, we) support a pilot study , in co-operation with the World Bank and its initiatives (CASM), concerning the feasibility of a… certification system for… raw materials… (with) focus on the artisanal and small scale mining sector… </li></ul>3 of 25
    4. 4. statistical consumption per capita during an average 79 years lifetime iron ore – < 4% 1.350 kg 35 t copper – 0,5% 1.100 kg 5 kg zinc – 1% 700 kg 7,5 kg lead – 3% 350 kg 10 kg tin – 25% 20 kg 5 kg tungsten – >6% 7 kg 450 g cobalt – 30% 2 kg 600 g silver – 8% 1.200 g 100 g tantalum – 20% 300 g 60 g gold – 10% 50 g 5 g total consumption statistical share of ASM Why ASM? German mineral consumption Source: BGR databank 4 of 25
    5. 5. tantalum ore: african production statistics 50 100 150 200 250 300 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Ta [t metal content] Ethiopia Nigeria Namibia DR Congo Zimbabwe Mozambique Rwanda (REDEMI) Burundi Rwanda Source: USGS Minerals Yearbook, BGR databank „ coltan boom“ 5 of 25
    6. 6. CTC dual policy objective: <ul><li>utilize mineral potentials in developing countries for the alleviation of poverty and the strengthening of regional stability </li></ul><ul><li>create open and fair access to the worldwide potential of strategic raw materials indispensable to the industrial value chain through creation of a level playing field </li></ul>panning, Kwara State, Nigeria 6 of 25
    7. 7. what minerals? the CTC window Source: BGR databank 0,01 0,1 1,0 10 100 1.000 10.000 100.000 commodity, relative crustal abundance [ppm] value per unit [USD / kg] FeO (9.1%) Diamonds (  0.0001) Cu (75), Co (29) Au (0.004) Sn (2.5), Ta (1) high value impedes cooperative 12 USD/ct 18.5 USD/ct 650 USD/oz 400 USD/oz iron ore: 80 US cents/mtu Cu: 5 USD/kg Co: 35 USD/kg gold diamonds Sn: 7,000 USD/t coltan: 12,000 USD/t tantalite: 77,000 USD/t heterogenite: 250 USD/t cassiterite: 1,500 USD/t industrial product artisanal product 7 of 25 low value prohibits ASM 100,000 t 10,000 t 10 - 100 t 100 kg <1 kg
    8. 8. CTC key features <ul><li>directly link business partners </li></ul><ul><li>introduce minimum standards (e.g. OECD ) on origin and CSR by voluntary certification adapted to the local context </li></ul><ul><li>certification of specific mine sites </li></ul><ul><li>implement the CTC concept on a regional / multinational level </li></ul><ul><li>focus on industrial commodities </li></ul>hauling, Kayonza, Rwanda 8 of 25
    9. 9. matrix for responsible use of mineral resources good governance <ul><li>administration of mining titles </li></ul><ul><li>record of production and trade </li></ul><ul><li>adapted legal framework </li></ul><ul><li>regular inspection on the compliance with standards </li></ul><ul><li>guarantees on trading volumes </li></ul><ul><li>documentation of state financial revenues </li></ul><ul><li>security of tenure for ASM </li></ul><ul><li>verification of origin </li></ul><ul><li>organizational structure of the mineral producer </li></ul>transparency standards <ul><li>definition of standards </li></ul><ul><li>third party verification , audit </li></ul>certification <ul><li>implementation of standards </li></ul>9 of 25
    10. 10. <ul><li>benefits for producers and artisanal miners </li></ul><ul><li>improved market access </li></ul><ul><li>fair returns and improved working conditions </li></ul><ul><li>increased capital for investment available </li></ul>benefits of CTC <ul><li>benefits for the government of the producing country </li></ul><ul><li>regulation of informal mining </li></ul><ul><li>increased state revenues </li></ul><ul><li>competitive image of the mineral sector </li></ul><ul><li>conflict prevention </li></ul>assessing, Nemba, Rwanda 10 of 25
    11. 11. <ul><li>benefits for mineral consumers </li></ul><ul><li>access to mineral production without reputational loss </li></ul><ul><li>enhanced supply security through diversification of sources </li></ul>benefits of CTC (II) weighing, Kayonza, Rwanda 11 of 25
    12. 12. CTC concept reports commissions places request national certification unit assesses reports engages auditor contractual agreement delivers certified product support through fair price and technology transfer producer: cooperative, small scale mine customer: industrial consumer gives feedback revenues dialogue accompanies international partnership government of producer country consults, supports reputational protection expert (development program etc.) government of consumer country 12 of 25
    13. 13. geology modal mineralogy radiometric age geochemistry trace elements major elements CTC analytical fingerprint for coltan ores 13 of 25 Burundi Rwanda Uganda DRC „ Kibaran“
    14. 14. rough diamonds gold cassiterite coltan 765 MUSD 450 MUSD 250 MUSD 35 MUSD 30 MUSD 9,000 kg 18 Mct. 12,000 t Sn metal content 50 t Ta metal content DRC: post-war illegal trade estimated unrecorded annual exports (2005 - 2006) total market value 14 of 25
    15. 15. transparent material flows transparent revenue streams mine supervision, certification fiscalisation Module 1 Module 2 mineral production sustainable development DRC: two modules, one programme CTC 15 of 25
    16. 16. CTC in DRC reports commissions CEEC assesses reports Division des Mines delivers certified product fair price producer: cooperative, small scale mine customer: processing company revenues dialogue accompanies IC/GLR revenue authorities DGI, DGRAD supports reputational protection SAESSCAM consumers 16 of 25
    17. 17. CTC in Rwanda ASM, Kayonza 2, Rwanda 17 of 25
    18. 18. REDEMI: Official Mine Production Figures 200 400 600 800 1,000 1990 1992 1994 1996 1998 2000 2002 2004 50 100 150 200 250 Source: REDEMI, BGR databank cassiterite [t concentrate] coltan, wolframite [t concentrate] cassiterite coltan wolframite Rwanda crisis coltan boom „ the Congo wars“ 18 of 25
    19. 19. CTC in Rwanda <ul><li>national approach, government agencies (OGMR, RBS, REMA) </li></ul><ul><li>participation of willing firms operating in Rwanda </li></ul>SnO 2 , Ta 2 O 5 WO 3 Gifurwe Kayonza Gatumba Nemba Rutsiro <ul><li>adaptation of CTC standard to local context </li></ul><ul><li>technical assistance to support best practice and compliance with the standards </li></ul><ul><li>in accordance with the key mineral policy strategy of Rwanda </li></ul>19 of 25
    20. 20. International Conference on the Great Lakes IC/GLR member states Sudan DRC CAR Tanzania Kenya Uganda Rwanda Burundi Sambia Angola Ethiopia Egypt Namibia Botswana Zimbabwe Malawi Moza mbique www.icglr.org Congo Bujumbura Nairobi 20 of 25 co-opted countries involved
    21. 21. IC/GLR : a house for peace-building and development / www.icglr.org pact on security, stability and development: the Dar es Salaam Declaration peace and security democracy and good governance economic development and regional integration humanitarian and social issues technical instrument: regional programmes of action legal instrument: protocols financial instrument: special reconstruction and development fund regional follow-up mechamism (RFM) 21 of 25
    22. 22. CTC partnership ICGLR - PROTOCOL AGAINST THE ILLEGAL EXPLOITATION OF NATURAL RESOURCES 11. member states undertake to establish a regional mechanism […] to serve as a tool for combating the illegal exploitation of natural resources. this mechanism shall institute accredited standards as regards natural resource exploitation and shall include provisions on certification of origin […]. 22 of 25
    23. 23. IC/GLR : regional initiative against illegal exploitation of natural resources <ul><li>stocktaking exercise on ongoing initiatives and proposal for integrated initiative </li></ul><ul><li>integration within national initiatives </li></ul><ul><li>meeting among member states on implementation strategy </li></ul><ul><li>revised and endorsed project strategy </li></ul>23 of 25
    24. 24. CTC road map conference, Berlin, Germany <ul><li>10/06 – 05/07: elaboration of concept </li></ul><ul><li>06/07: G8 summit Heiligendamm </li></ul><ul><li>12/07: Berlin conference on “ transparency in the mineral sector ” </li></ul><ul><li>07/08: TOR study “ CTC in mineral production - towards technical assistance ” </li></ul><ul><li>10/07: baseline audit “ assessing corporate social responsibility against international standards ” </li></ul><ul><li>09/08: scoping study ” CTC & EITI: synergies and scope for collaboration ” </li></ul><ul><li>10/08: consultation “ 8th annual CASM conference ” </li></ul><ul><li>11/08: consultation “ fatal transactions conference ” </li></ul><ul><li>12/08: implementation workshop / round table “ pilot project Rwanda ” </li></ul><ul><li>03/09: start-up bilateral project “ transparency and control in the mineral sector of DR Congo ” </li></ul>24 of 25
    25. 25. muito obrigado! for more information: Markus Wagner Bundesanstalt für Geowissenschaften und Rohstoffe (BGR) e-mail: [email_address] 25 of 25