GOMA, DR CONGO and WASHINGTON, DC –(ENEWSPF)–October 26, 2012. Gold smuggled from eastern Congo’s war zone is now the most lucrative conflict mineral and is ending up at jewelry stores and banks, according to a new investigative report by the Enough Project. The study found that following a 65 percent drop in profits from the conflict minerals tin, tungsten, and tantalum, armed groups have increasingly turned to smuggling the fourth conflict mineral, gold, to generate income that finances mass atrocities in eastern Congo. The armed groups use poorly paid miners, who work in dangerous conditions, including thousands of children as young as eight years old. The study maps out how conflict gold makes its way from eastern Congo to consumers worldwide who purchase it in the form of wedding rings and watches, and investment banks that buy gold bars.
The study found that over $600 million of gold is illegally smuggled out of the Democratic Republic of Congo every year in a six-step process. Rebel groups such as the Democratic Forces for the Liberation of Rwanda, or FDLR, are smuggling gold, and the Rwandan-backed M23 rebel group is attempting to retake control of gold mines and trading routes.
Sasha Lezhnev, author of the report and Enough Project Senior Policy Analyst, said:
“The conflict gold rush has hit eastern Congo’s war zone. Armed militias such as M23 and the FDLR are financing their operations with conflict gold. As our investigation revealed, smuggled gold continues to flow through to gold chains, rings, and banks through a six-step process. The Dodd-Frank law on conflict minerals is starting to spur reform in the gold sector, but lucrative gold smuggling continues unabated. It is time for more effective action.”
The report, “From Child Miner to Jewelry Store: The Six Steps of Congo’s Conflict Gold,” tracks the transnational trade from the mines in eastern Congo to end products sold to consumers.
The six main steps of the conflict gold trade (laid out in an accompanying infographic) are:
1. Mines operated by warlords in eastern Congo;2. Congolese smugglers working with armed groups;3. Regional smugglers in Uganda, Burundi, and Tanzania;4. Refiners in Dubai;5. Banks in Switzerland; and6. Jewelers in the U.S., India and China.
At the lowest end of the chain, gold miners in eastern Congo face some of the world’s worst working conditions and include up to 40 percent child miners, as young as eight years old. A handful of exporters in the region work with armed groups and smugglers to control the trade by pre-purchasing gold directly from the mines. A large percentage of conflict gold funds armed groups, many of whom use mass rape and violence to intimidate local populations in an effort to secure control of mines, trading routes, and other strategic areas.
According to the report, the majority of conflict-gold mines is located in South Kivu, making up an estimated 40-50 percent of Congo’s overall gold production. Gold from 15 major mines in North and South Kivu is mainly sold to smugglers, who illegally transport 99 percent out of the country to neighboring Uganda, Burundi, and Tanzania, and then take it to Dubai.
Enough Project Executive Director John C. Bradshaw said:
“Governments and companies need to do more to ensure transparency in the gold supply chain and to hold accountable armed groups and their business partners who profit from conflict gold. To end the conflict gold trade and create a legitimate market that improves living standards in eastern Congo, companies need to invest in a formalized, traceable, and certified conflict-free gold sector.”
This is the first of two Enough Project papers on the illegal conflict gold trade from eastern Congo. The second will offer recommendations on how to formalize the trade, cut down on smuggling, and create jobs that provide living wages for Congolese miners.
Read the full report: “From Child Miner to Jewelry Store: The Six Steps of Congo’s Conflict Gold” (PDF)
View or download a conflict gold photo slideshow (credit Sasha Lezhnev/Enough Project): http://www.flickr.com/photos/enoughproject/sets/72157631828402860/
View or download an infographic mapping out conflict gold’s six-step process: http://enoughproject.org/files/conflict-gold-infographic.png
Enough is a project of the Center for American Progress to end genocide and crimes against humanity. Founded in 2007, the Enough Project focuses on crises in Sudan, eastern Congo, and areas of Africa affected by the Lord’s Resistance Army. Enough’s strategy papers and briefings provide sharp field analysis and targeted policy recommendations based on a“3P” crisis response strategy: promoting durable peace, providing civilian protection, and punishing perpetrators of atrocities. Enough works with concerned citizens, advocates, and policy makers to prevent, mitigate, and resolve these crises. For more information, please visit www.enoughproject.org.