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Gold/Mining/Energy : AVL.V - AVALON VENTURES

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To: Gary K who wrote (1460)3/27/2001 8:44:41 PM
From: charred  Read Replies (1) of 1474
 
Rich ore that fuels a war: Blood Money:
Col-tan-today's wonder mineral used in computers and mobile phones-is more
lucrative than gold to rebels and foreign armies fighting Africa's biggest,
messiest conflict Karl Vick
The hillside bears a gouge like a wound, and as the sun slides behind it,
the miners put down their shovels and climb up the crumbling walls of their
trenches by the hundreds.
The fortunate ones clutch tiny plastic bags of black sand, a pound of which
counts as a windfall. Twice a week a man called Pierre will come with his
soldiers and pay as much as $10 for it.
No one working in the mine is quite sure why.
"We don't know the importance of col-tan," said Martin Nkibatereza, leaning
on his shovel. "I mean, how is it useful?"
Col-tan-short for columbite-tantalite, an ore rich in the element
tantalum-is nothing less than today's wonder mineral.
In processed form, col-tan is vital to the making of mobile phones, jet
engines, air bags, night vision goggles, fibre optics and, most of all,
capacitors, the components that maintain an electric charge in a computer
chip. Last Christmas, when shoppers fumed at the shortage of PlayStation 2
platforms on which to play make-believe war, the reason was a shortage of
the black sand that Nkibatereza leaves his hut at dawn to collect-provided
the shooting from a real war has not forced him to spend the night hiding in
the bush. Col-tan is an ingredient in that war as well.
The two wars that have ravaged Congo for four of the last five years have
been funded by minerals, a substantial portion of which are siphoned off for
leaders of the armies fighting them. And in Congo's eastern section, home to
some of the richest col-tan ore deposits in the world, the mineral has
achieved a prominence reflecting its value, which spiked spectacularly in
the closing months of 2000.
The first time the world price doubled, Congolese peasants who had been
mining gold were told to forsake it for col-tan. When the price doubled
again-and then again and again, to more than $200 US a pound-the rebel group
that controls the area declared a monopoly on exports.
"I mean, we are at war," said Adolphe Onusumba, president of the Rally for
Congolese Democracy (RCD), the rebel group sponsored by Rwanda, whose own
war effort is also funded by col-tan. "We need to maintain the soldiers. We
need to pay for services."
As much as any of Congo's fabled mineral riches, col-tan explains what all
those armies are doing in Congo. Pursuit of any one commodity may not
explain why six foreign countries, two rebel groups and assorted militias
came here to fight.
When the RCD rebels and their Rwandan backers started the current war in
August 1998, Congo's wealth of gold, diamonds and copper was well-known, but
almost no one had heard of col-tan, then selling for less than $20 a pound.
But with the price of a pound of col-tan sometimes exceeding $100 a pound-or
$200,000 a ton-the trade goes a considerable way toward explaining why the
belligerents have been so reluctant to depart.
"At least around here, people look for col-tan more than for the gold and
the diamonds," said Bizima Karaha, the RCD interior minister.
"Before I saw it, I expected to see something extremely wonderful," Karaha
said. "It is just mud. I was sincerely not impressed."
On the Congolese government side, the granting of mineral concessions to
military allies has been well-documented: offshore oil wells to Angola,
diamond and cobalt to Zimbabwe, a share of a diamond mine to Namibia. Among
the rebels and foreign invaders who control the eastern half of Congo, the
expropriation of diamonds, timber, coffee and gold is also taken forgranted.
But col-tan, once regarded as less desirable than the tin ore with which it
usually is found, would outpace them all.
"We raise more or less $200,000 per month from diamonds," said RCD leader
Onusumba, whose army also controls the diamond trading centre of Kisangani
and charges diamond dealers 10 per cent of the cash they carry into the
territory. Mineral Generates $1 Million a Month for Rebels
"Col-tan gives us more: a million dollars a month."
The money pays the expenses of RCD's lightly trained rebel army of 40,000,
Onusumba said, and supports the recruiting drive for more troops, who will
have to fill the gap as Rwandan forces pull back from front lines as part of
a regional peace plan. That plan, rejuvenated since Joseph Kabila replaced
his slain father, Laurent, as Congo's president in January, calls for UN
peacekeepers to deploy as observers.
Rwanda has been the main military force in Congo since starting the war. But
how the tiny, poor country financed its campaign-especially the military air
transports needed to maintain a 1,600-kilometre front line-has frustrated
diplomats and World Bank officials examining an official defence budget
barely large enough to feed its army.
Informed that Rwandan President Paul Kagame had quietly told diplomats the
RCD covered such costs, Onusumba nodded.
"That is why I can't show you our bill," he said, referring to the bank
statement the RCD finance minister had just placed in front of him.
In Walikale, said to have the highest quality col-tan ore in North Kivu
province, farmers were even flown in from Rwanda to work in the mines, says
Eugene Ngayabaseka, North Kivu's provincial governor, who complained of
being deprived of export tax revenue from col-tan mined at the site.
The tax, which runs $10,000 a ton, is collected by SOMIGL, the company set
up in November to monopolize exports. To manage the firm, the RCD chose
Aziza Kulsum, known in Africa's Great Lakes region as Madame Gulimali and as
the area's premier smuggler. Her past ties to Hutu militias in her native
Burundi make her a puzzling ally for rebels backed by Rwanda's Tutsi-led
government.
"I have no relation with them now," Kulsum said of the Burundian Hutus,
while drumming her fingertips on the edge of her desk and grinning toward
the ceiling. "I did in the past."
Kulsum also denied her reputation for smuggling, but Onusumba said her
notoriety was what attracted the RCD to her. "I know she was involved in
smuggling-cigarettes, gold," said Onusumba. "She was approached. ... Isn't
it better to have her on your side, then she will help you?"
At the time the monopoly was formed, the RCD estimated that territory under
its control was producing between 100 and 200 tons of col-tan a month and
that SOMIGL would collect at least $1 million a month.
In the first month, it did. But January exports fell to 96 tons. And
February plunged to 17 tons. "The price came down on the international
market," Kulsum explained. "And also, there was a lot of smuggling."
Col-tan prices did fall steeply after the new year, to about $100 today. As
for the smuggling, competing col-tan dealers say SOMIGL's artificially low
asking prices gave them no choice but to take advantage of Congo's porous
borders.
Bukavu businessman Ramnik Kotecha said he ships up to 25 tons of Congolese
col-tan a month, but from across the border in Rwanda.
"The suppliers get it over there," Kotecha said. "Still, we are making
$200,000 to $300,000 a month ... but not like we were making it here (before
the RCD imposed its monopoly). Here, we were making $700,000 to $800,000 a
month," with profits above 50 cents on the dollar.
Even at half the peak price, the economics of col-tan remain lucrative.
Mining Col-Tan Is Dangerous Work
With shovels they buy themselves, the miners work eight-hour shifts in mines
that belong to no one and can be wildly hazardous. This month, a collapsing
hillside buried at least 50 workers at a mine 50 km northwest of Goma.
The mine that Pierre Hitiman visits twice a week lies in the mountains above
Lake Kivu. He drives part of the way in his Toyota pickup-with four
soldiers, since being hijacked six months ago and losing an entire ton of
col-tan-and walks the last hour, along footpaths that hug hills so steep the
potato and corn fields seem almost vertical.
The ore the miners carry in sacks on their heads to the car is "good," said
Hitiman's employer, a Congolese who declined to give his name. The
spectrometer at his Goma warehouse finds 25-percent tantalum in the samples,
which are ground, washed and poured into 55-gallon drums.
Where they go next, businessmen have grown wary of saying. Through the
rebel-sanctioned SOMIGL monopoly or through smuggling channels, the col-tan
makes its way to Kigali, Rwanda's capital. From there, the Belgian airline
Sabena flies twice a week to Europe, where a pool of buyers sets prices in
London. Roughly half ends up being turned to powder by H.C. Starck, a
subsidiary of Germany's Bayer Corp.
"It is capitalism in its purest form," said Robert Raun, president of Eagles
Wings Resources, an Ohio firm that buys Congolese col-tan.
Back in Mumba, the miners leave for home well before dark. The ethnic Hutu
militias that Rwanda was trying to eliminate when it first invaded Congo in
1996 continue to hold sway in the hills.
"We could be rich, but there is still the problem of insecurity," said Alex
Kabongo, who, like most of the miners in Mumba, turned to digging only after
the Hutu militias stole his cattle.
He pointed toward the darkening hills. "They are coming in the night."
Photo: Washington Post / At a mine in Mumba, Congo, diggers extract col-tan,
an ore rich in the valuable element tantalum. Rebel groups rely on ore
revenue to support the war in Congo.
The Edmonton Journal Sun 25 Mar 2001 Sunday Reader E4
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