TANTALUM-NIOBIUM INTERNATIONAL STUDY CENTER

Chausse de Louvain 490 1380 Lasne, Belgium Tel. +32 2 649 51 58 Fax +32 2 649 64 47 AISBL

12th August 2010

To whom it may concern, This document seeks to explain the context of tantalum mineral supply from central Africa, an area where all tantalum bearing minerals are colloquially known as coltan all the figures provided here relate to all tantalum minerals1 and not simply those nicknamed coltan. Tantalum production from CENTRAL AFRICA (the DRC, Rwanda, Uganda and Burundi) is a relatively minor part of the industrys supply chain, as the following chart will show: Sources of tantalum 2000-2009 by percentage Best estimates based on collated data from various industry sources
100.0

80.0

RECYCLE SECONDARY AUSTRALIA ASIA N. AMERICA S. AMERICA OTHER AFRICA CENTRAL AFRICA

60.0

40.0

20.0

0.0 2000200120022003200420052006200720082009

Likewise tantalum production in the DRC is of minor significance to the other artisanal production of the 3Ts and gold. The value of tantalum exports from the DRC is an order of magnitude less than exports of cassiterite (tin ore) while the combined tin, tantalum and tungsten exports are less than that of gold. We estimate that the relative values are of the order of: gold 55%; tin 40%; tantalum 4% and tungsten 1%. A recent excellent, unbiased, article on the relative values of exports of these minerals from the conflict zones is that by Nicholas Garrett and his associates2. Even allowing for a certain amount of guesswork in all
1

Such as tapiolite, wodginite, ixiolite, bismutotantalite, fermsite, stibiotantalite, simpsonite, microlite and minerals of the complex fergusonite, aeschynite and euxenite mineral groups. 2 Garrett, N. and Mitchell, H. (Resource Consulting Services, UK) Trading Conflict For Development, Document commissioned by UKs Department for International Development, April 2009.

these figures, and the changing relationship of metal prices, it can be seen that coltan actually has a relatively minor role. In addition, known and likely resources of tantalum in the DRC are relatively minor compared to the rest of the world far from the oft quoted figure of 80%, they are, in fact, closer to 9% of world resources, primarily located in poorly documented small deposits. Over 60% of the total likely resources are located in South America essentially Brazil and Australia; in both cases in a few very large deposits with well documented reserves; elsewhere the majority of deposits are either smaller, less well documented, or to date have not progressed from resource to reserve status. Most likely (unofficial) resource base in million pounds Ta2O5 million lbs percent 285 40% 145 21% 73 10% 10% 69 63 9% 47 7% 12 2% 5 1% 698

South America Australia China & SE Asia Russia, Middle East Central Africa Other Africa North America Europe

Now, for some specific background on tantalum. Tantalum minerals have been produced in the DRC for many decades: for all of that time, tantalum production has been a small fraction of the amount of cassiterite (tin ore) produced indeed in many cases the tantalum minerals were little more than a by-product of tin mining. To this day, a significant proportion of tin concentrates contain, after smelting, economic quantities of tantalum. Back in the 1950s, tin and tantalum were produced in industrial plants owned by foreign generally Belgian companies. Since Independence, essentially all of these industrial operations have withered and all production is now by artisanal means, with sales no longer made directly to the processors, but through various traders, with a whole infrastructure of licensed comptoirs and ngociants. Unfortunately, of course, since Independence, the DRC has had a sad history of rebellion and civil war. Exacerbating this is the fact that on more than one occasion, the rebels have gone on to become the legitimate government. Racial tension, rather than immediate financial gain, appears to be a root cause of many of these rebellions, even if the eventual financing of these ongoing rebellions is (or was) partially at least the result of expropriation of mineral producing areas. This probability that coltan was being so used was beginning to become apparent as long ago as 1999, during the dot.com boom: the industry was probably aware of this potential, and simply acted accordingly, rather than reacting to any specific third party reports.

For example, mid to late 1999, several new traders of dubious origin were offering parcels of material, but in general the established processors were very wary of these newcomers, preferring to stick with trusted long-term suppliers or known producers. This also included producers in neighbouring countries such as Rwanda, where the producers mines were audited. Similar mine audits in the DRC were, frankly, impractical not only due to the almost total lack of infrastructure, but the ongoing civil wars made such efforts too dangerous. By 2001 the dot.com bubble had burst. Spot prices which had risen dramatically in 2000 had dropped by an order of magnitude, back to and indeed below historic price levels. New production was coming on stream from the large deposits in Australia and Brazil, by 2003 production from the DRC had dropped off and the majority of the new traders had simply faded away. Also, by that time one of the largest processors had commenced publishing that it no longer purchased material from the DRC or a number of the DRCs neighbouring countries. The U.N. Report of Experts (S/2002/1146) from end 2002 undoubtedly highlighted the potential that mineral production, including coltan, was at least partially financing ongoing rebel activity. The T.I.C. did at that time write to all cited members, seeking clarification of their position, and was satisfied that our members were working, to the best of their knowledge, ethically. From 2002 through to 2008 the issue remained in the background, in that production from the DRC was much reduced, and as noted above only the long term traders were still in the mainstream market. In addition, the civil wars seemed to have reduced in scale (or at least subsided from public consciousness). Nevertheless, the T.I.C. continued to urge its members to act in an ethical way, while at the same time accepting that, not being a regulatory body, we would find it difficult to enforce. In addition, the T.I.C. could not prohibit or restrict lawful trade of 'coltan' originating in Africa a position that we maintain. With the publication of the 2008 U.N. Report of experts (S/2008/773), the T.I.C. established a Working Group on Tantalum and Niobium Mining. It held its first meeting in January 2009. The objectives of the Working Group are to promote the tantalum and niobium industries, to explore the issues related to the mining of their minerals on a world-wide scale and to help to improve the standards of Artisanal and Small Scale Mining (ASM) operations. In particular, the Group has developed a policy of due diligence in the form of transparency and traceability of raw materials along the supply chain. The Artisanal and Small Scale Mining Policy was approved by the membership of the association during the Fiftieth General Assembly held in Tallinn, Estonia, in October 2009. As stated on our website3: The Policy supports the recommendations of the report issued by the U.N. Panel of Experts in 2008, as well as a growing number of Non-Governmental Organisations (NGOs), that disengagement is not the answer, rather a comprehensive approach that requires members to work to a code of full, documented and audited traceability and transparency throughout the supply chain. The T.I.C. condemns any activities that
3

tanb.org/wg

have the effect of routing mineral revenues to United Nations sanctioned groups; the Policy therefore accepts the requirement to identify legitimate mines, and the need to work with the host Governments to improve governance that will ensure artisanal mining can be performed in conditions of freedom, equality, safety and human dignity Based upon that, we were developing a series of procedures ensuring that each member company practised full duty of care, but more recently we decided to part fund the iTSCi initiative of the International Tin Research Institute (ITRI), to trial tantalite within this scheme. ITRI represents the tin industry, whose exports from Central Africa are, as indicated above, an order of magnitude greater than tantalum, and who are consequently further down the road of supply chain transparency. We suggest you review the ITRI website for further information on this very important initiative.4 The T.I.C. is also working closely with the electronics and telecommunications industries (the EICC/GeSI) and is on the OECD working group developing a set of Due Diligence Guidelines.

itri.co.uk