Whether the Democratic Republic of the Congo (DRC) supplies 70% of the world’s demand for cobalt or 30% is immaterial in the sense that this Rare Earth Material (REM) represents a new ‘Klondyke’ stemming from its key role in modern technology, not least mobile phones.
The ‘Blood Coltan’ movement forced US authorities to act: Section 1502 of the US Dodd-Frank Act requires that companies publicly traded in the U.S. disclose the use of certain metals, including tantalum, in their products and describe the process used to ensure that the purchase of these minerals does not fund the illegal armed groups operating in the DRC.
However, coltan trading operates in a shadowy world as a US Geological Survey report in October 2011 noted: ‘Niobium and tantalum materials are not openly traded. Purchase contracts are confidential between buyer and seller; however, trade journals report composite prices of tantalite based on interviews with buyers and sellers, and traders declare the value of niobium and tantalum materials that they import or export.’
Though the ‘shadow economy’ is often associated with all aspects of illegal trading, it also covers a ‘third sector’ located between illegal commerce and open trading, based on the ‘spot market’ principle that was pioneered in oil trading by Marc Rich and his colleagues in the mid-1970s to circumvent the Arab oil embargo of supplies to the West.
The Geological Survey also reported US import sources (2007–10): ‘Tantalum contained in niobium (columbium) and tantalum ore and concentrate; tantalum metal; and tantalum waste and scrap—China, 18%; Germany, 13%; Kazakhstan, 10%; Australia, 10%; and other, 49%.’ Where is the ‘other’?
In the absence of an effective and centralized authority such as in the DRC, national borders become merely nominal and only serve as a conduit for the distribution of bribes to facilitate passage of goods and becomes self-perpetuating as a revenue source.
Thus REM resources represent a new phase and subdivision in ‘natural security’ which is dominated by market demand: while theoretically it is possible to live without a mobile phone, many people would consider it impossible to do so; in consequence, guaranteeing the supply of these products and their components has become a de facto responsibility of Western governments if they want to stay in power Jasper Humphreys, The Marjan Centre