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Wagner Trading Chains In Mineral Production


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Wagner Trading Chains In Mineral Production

  1. 1. CTC - Certified Trading Chains in mineral production: the general concept Markus Wagner BGR – Federal Institute for Geosciences and Natural Resources Brasilia, October 7, 2008 8th annual CASM conference - workshop 7
  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 11
  3. 3. 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>3 of 11
  4. 4. 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>mining, Mutala, Mozambique 4 of 11
  5. 5. 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>panning, Ile-Ife-Ilesha, Nigeria 5 of 11
  6. 6. 6 of 11 <ul><li>benefits for producers and artisanal miners </li></ul><ul><li>security of tenure </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 (I) <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
  7. 7. <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><ul><li>competitive branding </li></ul>benefits of CTC (II) weighing, Kayonza, Rwanda 7 of 11
  8. 8. 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 8 of 11
  9. 9. CTC drivers for success <ul><li>long-term mutual economic benefit </li></ul><ul><li>multiphase approach, progressive compliance </li></ul><ul><li>acceptance through multistakeholder participation </li></ul><ul><li>credibility through independent auditing </li></ul><ul><li>support on international level (identify champions!) </li></ul><ul><li>reality check on the ground within pilot projects </li></ul>trucking, Kasumbalesa, DRC 9 of 11
  10. 10. 10 of 11 CTC road map security, Rutsiro, Rwanda <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 WS / round table “ pilot project Rwanda ” </li></ul><ul><li>03/09: start-up bilateral project “ transparency and control in the mineral sector DRC ” </li></ul>
  11. 11. thanks! for more information: Markus Wagner Bundesanstalt für Geowissenschaften und Rohstoffe (BGR) e-mail: [email_address] young miner, Nemba, Rwanda 10 of 10