HERTFORDSHIRE, ENGLAND -- A recent lapse in donor funding that threatened progress of the Conflict Free Tin Initiative project in the Democratic Republic of Congo has been overcome by new commitments from upstream companies.
The new funding sources will be sufficient to keep the iTSCi Program operating at Nyabibwe, South Kivu, DRC, pending further developments on funding, the ITRI said today.
In October 2012, after two years of a de facto embargo on 3T (tin, tantulum and tungsten) mineral production in South Kivu, DRC, the CFTI brought a chance of resumption of trade to the mines around Nyabibwe through a framework of due diligence and traceability according to internationally agreed concepts outlined by the Organisation for Economic Co-operation and Development (OECD) to bring conflict-free minerals from high risk areas to the international market.
The CFTI used the iTSCi Program to assure upstream supply chain vendors that material sourced from the mine was produced using legal labor. Downstream users, such as Philips and Tata Steel, now use some of the tin from mines within the CFTI in their consumer products.
The CFTI brought representatives of different levels of the supply chain together and demonstrated that conflict-free supply chains could be built from areas such as South Kivu, which previously was considered too high risk;. This proof of concept allowed a mine in North Kivu to be added to the iTSCi programme earlier this year.
The costs of the local iTSCi Programme activity were partially supported by the Ministry of Foreign Affairs of the Netherlands MFA, and initially by the South African Government through the Department of Trade and Industry's Regional Spatial Development Initiatives Program (RSDIP). These funding sources supplemented ongoing contributions from the upstream industry to both local and international costs of iTSCi, such as auditing and important management functions, ITRI said in a press statement.
While the iTSCi Programme has extensive local support, further donor funding would bring the demonstrated benefits to more communities at a greater rate. iTSCi remains in discussion with MFA over future possibilities that will continue to support Nyabibwe and help achieve this wider objective.
Yves Bawa, iTSCi regional program manager and staff member of implementing partner Pact Inc., said, "Currently iTSCi is operating in three countries impacted by Dodd Frank, including four Provinces of the DRC. However, further donor support would considerably accelerate the speed of extension across the region and strengthen the regional dynamics of traceability and due diligence of 3Ts minerals in the entire great lakes area, providing a much needed opportunity for development and stability.”
The iTSCi Programme still faces significant funding challenges, particularly at early stages of implementation in any new area as mineral production starts at an extremely low level and can take many months to build. Although iTSCi is a joint industry mechanism, initial private sector investment in challenging, remote and low production areas is difficult to justify on a business level and initial donor support is essential to ensure implementation over a wide area, ITRI said.
In a statement, Joseph Ikoli Yombo Y' Apeke, director du cabinet adjoint of the Minister of Mines of the DRC, appealed to new donors: “The Ministry is fully supportive of the iTSCi Program and we hope that donors, appreciating the success and rapid progress achieved so far, will find a way to commit funds to the implementation of iTSCi and capacity building of the mining services of the Democratic Republic of the Congo.”
Nevertheless, iTSCi has not found further funds either for the DRC, or in other areas impacted by Dodd Frank, such as Burundi and Uganda, among others. The Program is now entirely supported by upstream industry financing, which is extremely stretched, the organization said. "Any additional donor support would be very welcome and would make a significant difference to ensuring the continued success and extension of the Program."
Although the amount of mineral produced from the Kivu mine was relatively small and not all the tin generated was taken up by participating CFTI downstream companies, material produced through the complementary iTSCi and CFSP independently verified systems was well accepted on the international market. This demonstrates the growing confidence in traceable DRC minerals.
Kay Nimmo, tin representative on the iTSCi Governance Committee, said, “iTSCi prefers to operate as an open supply chain where an ever growing group of member companies recognise and work to the same standard, based on the OECD Due Diligence Guidance, while able to commercially compete in a normal manner to ensure a sustainable business case and best prices for miners. This is an important lesson learned through CFTI, where limited numbers of mines and operators in a small and restricted supply chain created a number of unnecessary challenges; in the end the vast majority of the conflict-free material produced from Nyabibwe went into the open international marketplace.”
Some of the funding provided by both MFA and RSDIP also contributed to the operation of iTSCi in the central area of Maniema earlier in 2013, with industry building on this startup by funding further extension, including to northern Maniema in recent months.
Of the approximately 5,200 tonnes of conflict-free cassiterite exported from the DRC through the iTSCi Programme in 2013, over 700 tonnes was from Maniema and around 370 tonnes from South Kivu.
