An initiative aiming to relaunch legal mining in eastern Congo after an export suspension of conflict minerals will produce its first refined tin by the end of March 2013.

Under the Conflict Free Tin Initiative (CFTI), over 200 tones of tin ore worth around $1.7 million have already been sold to the Malaysia Smelting Corporation from the Kalimbi Mine in South Kivu in the Democratic Republic of the Congo (DRC). The CFTI ensures that each mined ore receives a plastic tag with a bar core that corresponds to a certification document, so that the minerals extracted from it can be exported legally.
The initiative aims to permit legal mineral exports from Congo after the adoption of the United States Dodd Frank law, which almost entirely halted the African country’s mineral trade.

The Dodd Frank Act aimed to ensure that the purchase by international firms of "conflict minerals" coming from the DRC, such as columbo-tantalite, wolframite, cassiterite and gold, did not financially support the conflict. Section 1502 of the law requires "that companies publicly traded in the US disclose the use of conflict minerals from the DRC and adjoining countries in their products and describe the process used to ensure that the purchase of these minerals does not fund illegal armed groups operating in the DRC to the greatest extent possible." It is assumed that illegally extracted minerals are currently helping to finance the leaders of the M23 rebels in the North Kivu province, which has displaced early 250,000 people since April 2012 and determined 57,000 people to seek refuge in neighboring Rwanda and Uganda since the beginning of 2012.

The Enough project, a key supporter of the law, claimed that its implementation resulted in a 65 percent profit reduction for armed groups from tin, tungsten and tantalum in 2011. In turn, a U.N. report, published in December 2011, stressed that the export suspension had a devastating impact on the lives of ordinary people who depended directly or indirectly on mining and was ultimately directing mineral trade into the hands of smugglers, such as Bosco Ntaganda, one of the M23 rebel leaders.
Out of the around 900 mines located in South Kivu, Kalimbi remains currently the only one which has internationally recognized traceability. A multi-stakeholder team, which included representatives of the DRC Government, the United Nations, the German Geological Service (BGR), the local project manager of the ITRI Tin Supply Chain Initiative (iTSCi), representatives of local business and civil society, validated Kalimbi as a conflict-free mine. The Congolese government is seeking to similarly tag other mines in the upcoming months.

As a result of the crackdown brought by the Dodd Frank Act, local prices collapsed by a factor of 6 to less than $1 a kilogram, while the only remaining buyers were Chinese exporters and smugglers. A week after the introduction of the conflict-free certification system at the Kalimbi mine, the price has returned to $3.5 per kilogram and more than 3,300 kg have been tagged. Currently, around 1,294 miners work at Kalimbi and have more than doubled their earnings to $4-$6 per kg from $2/kg. It is expected that the conflict-free tin will easily find buyers, given that global supply is currently limited, as a result of low stocks and a lack of investment.

Eastern Congo has been affected by violence since the 1990s. One of the key reasons for the ungoing conflict is the fact that region is extremely valuable from an economic standpoint, due to its oil reserves, gold, tin, tungsten and coltan-a metal used to make mobile phones, for which both Rwanda and Uganda have fought in the past. Rwanda has twice invaded the DRC in the last two decades, even igniting in 1998 a conflict known as "Africa's Great War," in which several countries were involved. The Rwandan government justified this latter intervention by emphasizing that it had to react to hostile Rwandan Hutu fighters who had fled to Congo after the 1994 Rwandan genocide. Similarly, in the recent past, Uganda and Congo have fought over regulating border oil exploitation and resulted in the signing of the 2007 Ngurdoto Accords.

If legal production and sale of minerals would replace the current illegal and violent extraction process, Congo could enjoy a peaceful transition from its current state of conflict. Still, one potential problem for the conflict-free trade minerals is that there are currently thousands of tons of minerals extracted during the export suspension, which are stockpiled throughout eastern Congo, which could enter clandestinely on the trade market, thus threatening the credibility of the traceabililty project.

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Recently, you’ve been writing about the beginning of a new inflationary cycle and an uptick in inflation. How does the new inflationary environment differ from where we’ve been since the financial crisis?

For several months, there has been a surprising rebound in the Chinese and Asian markets as evidenced by strong demand and associated price increases in iron ore, copper, industrial metals, uranium, the heavy rare earth elements (HREEs) and platinum. For a long time, investors predicted a hard landing in China—and they have been wrong. As a result, we’re seeing a very powerful “risk-on” rally. Investor expectations over the past couple of years have been for deflation and the associated “risk-off” trade. The situation is beginning to flip and inflation expectations are beginning to creep back into investors’ minds. The early investors and the smart money are making “risk-on” trades as equities hit new highs and as investors flee currencies.

The numbers show that the Chinese economy is rebounding strongly. Banks are lending, and investments for commodities are increasing. After almost two years of economic contraction in China, I believe the Chinese economy decisively turned upward as of year-end 2012. For approximately the last two years, metals prices consolidated while the bond and the equity markets rallied. Notably, the bond market rallied before the equity market. Times when bonds and equities outperform commodities are usually predictive of inflation. Eventually, profits should flow from equities to commodities in the traditional inflationary business cycle. It is only a matter of time before capital hits the commodity and junior mining markets.

I believe the strongest evidence that an inflationary rally has started is the outperformance of industrial metals, as well as precious metals that have an industrial component, such as platinum and silver. Copper is beginning to outperform gold. For the past two years, as markets were risk-off, gold outperformed. However, from 2000 to 2008 before the credit crisis, the industrial metals and the miners outperformed the risk-off assets. We’re beginning to see a rotation from a deflationary cycle to an inflationary cycle. All the money that’s been pumped into the system by central banks worldwide and this competitive currency devaluation in order to boost anemic economies may be unleashing the beginnings of a long-term inflationary rally.

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The person in charge of the Division of the Ministry of Land and Resources geological exploration, said recently that China prospecting breakthrough results exceeded expectations since the implementation of the strategic action to find and identify a number of world-class reserves of scale deposits.

It is reported that the prospecting breakthrough strategy action is based on the domestic action of a national strategy to enhance energy resources and support capabilities. The actions to implement the two years since, China has successively proven Nanpu, Hua Qing, Tahe, Penglai 19-3, 15 more than 1 million tons of proven reserves of oil fields; proven the Sulige, Puguang, Xu, deep 14 proven reserves of more than 100 billion cubic meters of gas fields, the initial formation of the the Sulige Tabei one trillion cubic meters of world-class scale atmospheric District; resources to add more than one hundred billion tons of coal exploration in Xinjiang and Shanxi reserves ; identify a very large sandstone type uranium the (camp uranium) in the Ordos Basin; tungsten, molybdenum, nickel, and other multiple large deposits of the emerging material resources in Gansu, Xinjiang newly discovered more than three large mineral deposits.
 

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New Year, Dayu County Xinhua Industrial Park, Long matter of a faction within the project site of the tungsten industry bustling construction scene, is stepping up construction workers. Long matter of tungsten industry last year, settled more than tungsten and non-ferrous metals industry base deep processing enterprises, the project is put into the annual realized main business income of 5.0 billion. It is understood that, in Dayu County seize Gan South Sioux revitalization and development and Ganzhou historical opportunity for the implementation of the western development tax policy and efforts to resource advantages into industrial advantages county tungsten and non-ferrous metal industry cluster ten billion yuan is moving forward.

Dayu County is rich in mineral resources, but a long time is difficult, due to the integration of resources and technological backwardness factors, the county's mineral resource advantages into industrial advantages difficult. Around the integration of resources on the subject, the county actively promote the consolidation and reorganization of mines and deep processing, mineral resources to the advantage of enterprise gradually concentrated support breed Weiliang, Jingwei batch of innovative enterprises; tungsten mine of new proven, take several mines bundled the way of public auction of mining rights, expanding the the Loncin Thailand, Jincheng, a number of large-scale mining and deep processing of one-stop enterprise. Cartel county ore quickly add value, the tungsten recovery rate from less than 70% to more than 85%. Efficient use of local resources, the county also encourage enterprises to base foreign expansion, the introduction of foreign mineral over 100,000 t of ore per year. Achieve the Tungsten and non-ferrous metals middle-class processing to high-intensive processing, and the county to speed up elimination of outdated production capacity, optimize the industrial structure. Leading enterprises, the county tungsten and non-ferrous metal processing enterprises are rapidly update the production process, the development of mechanized and automated production lines, the introduction and R & D and development of high-performance carbide, heat-resistant the earthquake specialty tungsten and high-performance coated tool high value-added products.

Zhuchaoyinfeng, project-driven, Dayu County efforts to create industrial clusters development platform. Gan Surigao del Sur district revitalization development and resource-exhausted cities in transition as an opportunity to favorable policies of the county with the hilly slope development pilot and abandoned mining reclamation and utilization planning and construction of the Wuli Mountain tailings into the tungsten and non-ferrous metal processing industry base, integration of more than 2,000 acres of land resources, relying on Xinhua industrial district north to expand to 5,000 acres, the Xinhua New Century Industrial Area One "to form a contiguous development, efforts to promote infrastructure construction of the Metro Industrial Area, for tungsten and non-ferrous metals deep processing base construction provides plenty of space. Focus on tungsten and non-ferrous metal industry, county flexible investment approach, sent 16 investment teams were dispatched around the stagnation Focused on large projects and high-end enterprise led firefly Industry and Trade the dragon thing of tungsten industry and a large number large project successfully settled. Since last year, the county's newly introduced 21 projects, of which 6 million over the project. I tungsten and non-ferrous metal processing industry base has now gathered 43 of the tungsten and non-ferrous metal processing enterprises, with Loncin Thai tungsten industry, Dragon matter of tungsten industry, Donghong Tin Yuet An ultrafine enterprises above designated size 24 , the formation of tungsten and non-ferrous metal mining - primaries - intensive processing - waste recycling loop industrial system.


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