7 th Annual CASM Conference Certified Trading Chains

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7 th Annual CASM Conference Certified Trading Chains (CTC) in Mineral Production Markus Wagner,

7 th Annual CASM Conference Certified Trading Chains (CTC) in Mineral Production Markus Wagner, Gudrun Franken, Nicola Martin, Frank Melcher, Anna Stetter, Jürgen Vasters and Elke Westphale BGR – German Federal Institute for Geosciences and Natural Resources Ulaanbaatar, Mongolia, September 8 -12, 2007

CTC Background G 8 Summit Declaration 2007, Heiligendamm, Germany RESPONSIBILITY FOR RAW MATERIALS: TRANSPARENCY

CTC Background G 8 Summit Declaration 2007, Heiligendamm, Germany RESPONSIBILITY FOR RAW MATERIALS: TRANSPARENCY AND SUSTAINABLE GROWTH 85. Certification systems can be a suitable instrument… for increasing transparency and good governance in the extraction… of… raw materials and to reduce environmental impacts, support the compliance with minimum social standards and resolutely counter illegal resource extraction.

CTC Background II G 8 Summit Declaration 2007, Heiligendamm, Germany 86. The artisanal and

CTC Background II G 8 Summit Declaration 2007, Heiligendamm, Germany 86. The artisanal and small-scale mining sector provides important livelihoods to many people in developing countries… these activities often are conducted in an informal manner and do not meet minimum social and environmental standards. • (Therefore, we) support a pilot study, in co-operation with the World Bank and its initiatives (CASM), concerning the feasibility of a… certification system for… raw materials… (with) focus on the artisanal and small scale mining sector…

Why ASM? German Mineral Consumption Tantalum – 20% Silver – 8% 5 g 60

Why ASM? German Mineral Consumption Tantalum – 20% Silver – 8% 5 g 60 g Tungsten – >6% Lead – 3% 1. 200 g 600 g 450 g 10 kg Zinc – 1% 7, 5 kg Copper – 0, 5% 5 kg Iron Ore – <4% 2 kg 7 kg 5 kg Tin – 25% Share of ASM 300 g 100 g Cobalt – 30% Total consumption 50 g 1. 350 kg 20 kg 350 kg 700 kg 1. 100 kg 35 t Statistical consumption per capita during an average 79 years lifetime Source: BGR databank Gold – 10%

CTC Dual Policy Objective developing countries for the alleviation of poverty and the strenghtening

CTC Dual Policy Objective developing countries for the alleviation of poverty and the strenghtening of regional stability Gold, Osun State, Nigeria - Utilize mineral potentials in - Provide open and fair access to the worldwide potential of strategic raw materials indispensable to the industrial value chain

- Focus on commodities for industrial use - Directly link business partners and couple

- Focus on commodities for industrial use - Directly link business partners and couple there interests and objectives - Introduce minimum standards in the mineral production and trading chain with voluntary chain of custody certification based on verifiable indicators adapted to the local context - Implement pilot projects embedded in a national framework - Implement the CTC concept on an international level Tantalite, Mutala, Mozambique CTC Key Features

Expert (Development Program etc. ) Investment Bank, Development Bank, International Donor supports, finances, grants

Expert (Development Program etc. ) Investment Bank, Development Bank, International Donor supports, finances, grants loan reputational protection consults, supports Producer: Cooperative, Small Scale Mine contractual agreement Customer: support through “fair” price Industrial Consumer delivers certified product engages revenues Auditor assesses commissions Government of Producer Country Government of Consumer Country dialogue reports National Certification Unit places request accompanies CTC Concept International Initiative gives feedback

CTC Matrix for Responsible Use of Mineral Resources Standards Transparency Certification Good Governance -

CTC Matrix for Responsible Use of Mineral Resources Standards Transparency Certification Good Governance - Guarantees on trading volumes - Administration of mining titles - Verification of origin - Record of production and trade - Organizational structure of - Documentation of state the mineral producer - Definition of standards - Implementation of standards - Third party verification, audit financial revenues - Security of tenure for ASM - Legal framework adapted to ASM - Regular inspection on the maintenance of standards

- Long-term mutual economic benefit for producer and customer - Multiphase approach, progressive compliance

- Long-term mutual economic benefit for producer and customer - Multiphase approach, progressive compliance - Acceptance trough multistakeholder participation - Credibility of certification through independent auditing - Broad support on international level (identify Champions!) - Reality check on the ground within pilot projects Coltan, Manono, DRC CTC Drivers for Success

Tungsten, Kayonza, Rwanda CTC Pilot Project

Tungsten, Kayonza, Rwanda CTC Pilot Project

- Pilot project on mining of stanniferous minerals in Rwanda: Trade relation between Natural

- Pilot project on mining of stanniferous minerals in Rwanda: Trade relation between Natural Resources Development Rwanda Ltd. and H. C. Starck Gmb. H on the Nemba concession - October 2007: Baseline Audit based on the principles of OECD Integrity Instruments - 2008: Technical Assistance Program on Community Development, Health and Safety, Security, Environmental Issues, and BAT - 2009: Integrate CTC concept into bilateral cooperation with DRC in the mining sector Cassiterite/Coltan, Rutsiro, Rwanda CTC Road Map

CTC Analytical Fingerprint for Coltan Ores - Geology - Geochemistry Trace Elements Uganda DRC

CTC Analytical Fingerprint for Coltan Ores - Geology - Geochemistry Trace Elements Uganda DRC Ruanda Burundi Major Elements 6 Ti. O 2 wt% 5 4 „Kibaran“ 3 2 1 0 0 20 40 60 XMn 80 100 - Modal Mineralogy - Radiometric Age

CTC International Dialogue - G 8 Summit Declaration - 16 November 2007: Global Conference

CTC International Dialogue - G 8 Summit Declaration - 16 November 2007: Global Conference on “Transparency in the Minerals Sector” on the eve of G 20 Finance Minister Meeting - Dialogue with existing initiatives (KP, DDI, ARM, Durban Process) - 2008: Consultation Process - Identified „Champions“: - EITI (Extractive Industries Transparency Initiative) - ICGLR (Regional Mechanism for Certification of Natural Resources) - Bilateral Donors: Germany, (G 8 Partners) - CASM (Communities and Small Scale Mining Initiative)

For more information: Markus Wagner Bundesanstalt für Geowissenschaften und Rohstoffe E-mail: m. wagner@bgr. de

For more information: Markus Wagner Bundesanstalt für Geowissenschaften und Rohstoffe E-mail: m. wagner@bgr. de www. bgr. bund. de Cassiterite, Nemba, Rwanda Thank you!