sharing in governance of extractive industries
Levin Sources today announced an ambitious partnership to reduce instability in the Democratic Republic of Congo (DRC) by establishing a commercially viable, conflict-free supply chain of Artisanal and Small-scale Mining (ASM) gold. The initiative is a partnership with the United States Agency for International Development (USAID), Global Communities, Fair Congo and IMPACT.
The five-year, US $11.9 million USAID-funded program will link artisanal and small-scale miners in eastern DRC with buyers of responsible gold in international markets. It builds on recent successes achieved by donor-funded initiatives to export responsibly produced gold to jewellery buyers in the United States and Canada.
The objectives of the program are threefold:
Drive demand and co-investment for traceable, conflict-free ASM gold from eastern DRC by increasing its visibility, reputation and availability
Scale up exports of gold by strengthening and replicating the supply chain traceability, due diligence system and approach introduced by IMPACT’s Just Gold project
Improve the governance and business operations of ASM gold cooperatives through targeted participatory capacity building.
According to DRC mining law, artisanal miners are required to be part of a cooperative to engage in legal mining activities in designated sites. While some cooperatives exist, many tend to provide ‘license to operate’ in name only without adhering to the level of standards recommended and required by the law. This initiative will strengthen cooperatives by examining their business and governance structures and building commercial incentives to enable sustainable independent operation without continuous donor funding.
The initiative will provide a balanced approach to facilitating both supply and demand for responsible gold from the DRC. Levin Sources will stimulate interest, demand and investment in responsible ASM gold from the DRC with buyers from Asia, Europe and the United States, by:
Working closely with downstream actors in refining, smelting, manufacturing and retail to understand barriers that influence procurement decision making and map interested stakeholders
Developing a targeted business case to build capacity for potential investors and buyers, and drive demand
Securing interest and co-investment through various funding sources with the aim of leveraging $4 million for responsible gold supply chains from the DRC over the life of the program
Global Communities will improve governance and business operations of gold cooperatives upstream. IMPACT and Fair Congo will oversee and build the cooperatives’ capacity to manage the increase in exports of fully traceable, conflict-free ASM gold from eastern DRC.
The DRC has more than 1,100 mineral substances worth nearly $24 trillion. Artisanal gold, a major driver of the country’s economy, is also a key source of income for armed groups and criminal networks in DRC. It is one of its most commonly smuggled resources; more than 95 percent of artisanal gold mined in the DRC is smuggled into adjoining countries. Miners extract up to 16 tons of artisanal gold each year, but 1-2 percent is exported legally.
“Identifying downstream supply chain blockages and increasing demand for ASM gold is vital if we are to address instability in the DRC,” said Estelle Levin-Nally, Founder and CEO of Levin Sources.
“Levin Sources’ experience in supporting organisations manage downstream risks and invest in minerals responsibly, and network of key organisations in gold sourcing, means the initiative is a perfect fit for us. We believe this initiative is an opportunity for downstream organisations to invest in real, sustainable change. We’re proud to be part of an expert consortium working to manage improve the sector’s performance holistically.”
Currently, it is cheaper to buy gold through illicit channels than legal ones; local traders are willing to purchase gold at higher prices, and then smuggle it out illegally and avoid taxes, making illegal trade highly profitable. This new initiative will strive to provide commercial incentives for mining and exporting gold responsibly, in compliance with OECD Due Diligence Guidelines for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. The initiative also contributes to the broader USG strategy to address linkages among human rights abuses, armed groups and the mining of conflict minerals in the Great Lakes Region of Central Africa by requiring disclosure of publicly traded companies about where they source minerals.
ABOUT LEVIN SOURCES
Levin Sources is a social venture and consulting firm specialising in responsible mining and sourcing, by leveraging research, strategy, and convening power. Levin Sources has extensive experience in ASM, working with the private sector, governments, and civil society across sub-Saharan Africa, Europe, and North America, including many projects on gold supply chains in the DRC.
ABOUT GLOBAL COMMUNITIES
Global Communities is an international non-profit organization founded in 1952 that works closely with communities worldwide to bring about sustainable changes that improve the lives and livelihoods of the vulnerable.
Learn more at www.globalcommunities.org.
ABOUT FAIR CONGO
Fair Congo, sarl is a for-profit fully-licensed comptoir (exporter) registered in the Democratic Republic of Congo in 2017. Fair Congo is the first American-owned company to be granted an export license for ASM gold in the country, and the first and only exporter in the region to conform to the ‘OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.’
Find out more at www.faircongo.com.
Over the last three years, IMPACT has been implementing the Just Gold Project and has established a chain of custody for conflict-free ASM gold from Eastern Congo. IMPACT’s work in DRC has been funded by a range of donors including USAID, Apple, Dell, Global Affairs Canada, the PPA-RMT, and the European Partnership for Responsible Minerals.
More information available at www.impacttransform.org.
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