MINERALS AND CONFLICT IN EASTERN DRC

Dominic Johnson, Pole Institute
July 2009

In recent months, the issue of "conflict minerals" in Eastern DRC - coltan, cassiterite, gold - has moved back up the international agenda. There are several reasons for this. One is the seemingly intractable nature of conflict in the Kivu provinces: The strength of Laurent Nkunda's CNDP rebellion up to January 2009 and the strength of the Rwandan Hutu militia FDLR up to the present is seen as due to autonomous sources of finance which are presumed to lie in mineral resources. Another is the continuing importance of mineral exports to the Kivu economy, where they provide the main source of export revenue and thus of foreign exchange. Research, by the UN Group of Experts amongst others, has shown up close links between individual traders and specific armed groups. It is thus assumed that armed groups derive their strength from these links and that ending the trade or bringing it under government control will deprive armed groups of their livelihoods and thus contribute to ending conflict.
This view, however, represents an intellectual short-cut which rests on a facile equation of mineral export wealth and war-fighting capacity. In popular campaigning, it is presented in sometimes downright misleading terms, eg when sexual violence in Kivu is presented as something militias do as a means of securing control over natural resources. In political strategy, it risks turning attention away from the real reasons for conflict and real steps towards peace towards an equally facile equation of natural resource sector reform and peacebuilding.
If natural resource control lay at the heart of war in the DRC, the theatres of war would be those where natural resources are most lucrative, but this is not the case. Natural resource sector reform is valuable in its own right, as a means to the end of securing greater benefits from natural resource exploitation for the Congolese people. But it cannot be a substitute for security sector reform or other conflict resolution strategies in Kivu.

Understanding the role of minerals in the Kivu economy

• Historically, the economy in the Kivu provinces is based on agriculture and long-distance trade, not mineral exploitation. Minerals only gained prominence when agriculture was destroyed by conflict and mineral exploitation became the easiest source of overnight revenue for the population. Mining areas are not seen as "special" by the Kivu population and jobs in mining are not seen as something to aspire to in the way they are in provinces where there was a colonial mining economy such as Katanga, Kasai, Maniema or Ituri. Mining always was and is socially marginal in Kivu, and nobody would base a sustainable and convincing strategy for gaining political power on a marginal sector. Economically it became important only when traditional activities, especially agriculture, were destroyed by war and displacement during the Congo conflict. It has risen to prominence as a default activity, giving access to quick revenues in exceptional times of crisis when normal ways of earning a living are disrupted and normal social relationships are suspended.
• The economic dimension of conflict in Kivu (which began in 1993) is about rights of access to land and control of trade routes, not about minerals. The history of conflict in Kivu, which Pole Institute has analysed since its inception in 1996, shows that the existence of a trade in minerals is not a factor favouring either conflict or its absence. Conflict is linked to nationality and ethnicity and to political and administrative power. Economically this has to do with competition around control of trade routes and trade revenues between elites and with competition around access to land and water between rural populations. It is precisely because conflict revolves around other things than minerals that the mineral trade can serve as a substitute source of revenue for parties who have lost their other, really important livelihoods. There was never fighting around control of the cassiterite mines of Walikale, the gold mines of Lubero, the coltan mines of Masisi or the pyrochlore mine of Lueshe in Rutshuru. In South Kivu, large-scale artisanal gold mining began as a means for displaced populations in remote areas to survive.
• Kivu is import-dependent. It is a transit region for imported consumer goods (vehicles, petroleum products, finished manufacturing from Asia, clothes and shoes, processed foodstuffs, luxury goods). Imports exceed exports. They come from Mombasa via Uganda and/or Rwanda, and beyond Mombasa from Dubai and Asia. There is more money to made from this import trade, especially that in petroleum products and building materials, than from the export trade, including for financing conflict. This goes for trade inside Kivu too: Traders who buy minerals from mining areas also sell consumer goods which they bring in from outside. They are taxed for both by whoever controls access to their customers. Typically, the road of any given mineral product from mine to market, or of any given agricultural product from field to market, passes through territories of several armed groups (including FARDC) who each take a cut. And in the other direction, imported goods are also taxed or simply confiscated.
• Conflict financing is commodity-neutral. Traders in minerals are not dependent on minerals. They have traded in other things in the past or still do. They can switch to other products at a moment's notice if minerals become embarrassing. There is only a handful of large trading houses in Kivu with sufficient international experience to undertake long-distance trade with Dubai via Mombasa, and they generally deal in anything. Ending the mineral trade will therefore not break the link between trade and armed groups, it will simply create links with other commodities. Today, armed groups or other violent actors have no organic link with minerals. They depend on profits from monopoly control of trade routes and/or of productive areas - whether in agriculture, mining or other forms of natural resource exploitation (timber, charcoal, bushmeat).
• The key to conflict financing is the existence of trading monopolies. Armed groups as well as FARDC units finance themselves by sustaining exclusive control of the access to productive areas (agricultural or mining) and also of the trade routes along which primary goods are brought out and consumer goods brought in. They can then impose taxes and exploit the population for their own profit, and complicit traders keep up these arrangements in order to frighten the competition away.
• "Illegal exploitation" has little meaning in the context of conflict resolution in Kivu. There are multiple levels of legality and illegality which can be mutually contradictory: the validity or even the existence of the relevant exploitation or trading permit; the payment of taxes and duties; the registration of trade at the border. It is perfectly possible to trade and exploit minerals illegally in order to uphold rural livelihoods in areas where state legality means violence, arbitrary rule and coercion. It is also perfectly possible to trade and exploit minerals legally and then use the proceeds or even the state revenues to finance armed conflict. Conflict financing does not begin with miners digging ore out of a hole in the ground, but with the payment of a laisser-passer to the armed unit in control of the road to the hole. Traders have to buy off multiple legal and illegal actors on the way from mine to market. As long as state activity in the DRC, especially but not only that of FARDC, does not conform to standards of good governance, "legality" cannot be the only standard of good practice.

Breaking the link between minerals and conflict in Kivu

• Mineral exploitation is not the cause of conflict in Kivu, it is a consequence of it and of the lack of economic alternatives. Therefore ending or re-organising the mineral trade does not end conflict. Conflict is ended by addressing the root causes: competing claims to nationality and to the right of use of land and trade routes. This is a political issue, not an economic one.
• Economic activity must be encouraged, not suppressed, so as to provide a greater variety of livelihoods which reduces the incentive or necessity for joining armed groups. If the trade in minerals or anything else stops, competition around other sources of survival will increase, which means greater conflict potential. In the short term, if mineral exports dry up foreign exchange inflows stop and this makes all commercial and urban life completely impossible, as no imports can be paid for any more. However, increasing revenue from other sectors, especially those destroyed by conflict since 1993, will encourage economic and social stabilisation and give more people a stake in peace.
• The key to addressing roots of conflict as well as the link between trade and conflict is the ending of monopolies. As soon as access to mines and the use of routes along which trade goods can be transported is no longer under control of specific armed actors and their trading friends but open to all, monopolies fall. More people have the opportunity to engage in trade and production and also to move in and out of mining areas, more economic actors gain an interest in establishing normal business relations with remote areas, and surplus taxation by armed actors becomes more difficult to sustain as the same business can be conducted more cheaply elsewhere.
• Immediate steps:
• ending geographical isolation by opening roads to areas currently only accessible by air and improving disused road links;
• facilitating and protecting traders from predatory violent actors where they provide the only means of exchange between mining areas and the towns;
• facilitating and encouraging a return to the economic activities people remember from the past in areas where populations have become uprooted.
• A long-term goal: transparency and some form of community control over revenues from natural resource exploitation. Only if communities know what is being earned from their work and where the money is and have a say as to what happens to it is there a chance of channelling revenues towards reconstruction and development instead of conflict.

Dominic Johnson, Pole Institute
July 2009

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