[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
______
METALS, MINERALS, AND MINING: HOW THE CCP FUELS CONFLICT AND
EXPLOITATION IN AFRICA
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HEARING
OF THE
SUBCOMMITTEE ON AFRICA
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
March 25, 2025
__________
Serial No. 119-7
__________
Printed for the use of the Committee on Foreign Affairs
Available: http://www.foreignaffairs.house.gov, http://docs.house.gov,
or http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
60-388 PDF WASHINGTON : 2025
COMMITTEE ON FOREIGN AFFAIRS
BRIAN J. MAST, Florida, Chairman
MICHAEL T. McCAUL, Texas GREGORY W. MEEKS, New York,
CHRISTOPHER H. SMITH, New Jersey Ranking Member
JOE WILSON, South Carolina BRAD SHERMAN, California
SCOTT PERRY, Pennsylvania GERALD E. CONNOLLY, Virginia
DARRELL ISSA, California WILLIAM R. KEATING, Massachusetts
TIM BURCHETT, Tennessee AMI BERA, California
MARK E. GREEN, Tennessee JOAQUIN CASTRO, Texas
ANDY BARR, Kentucky DINA TITUS, Nevada
RONNY JACKSON, Texas TED LIEU, California
YOUNG KIM, California SARA JACOBS, California
MARIA ELVIRA SALAZAR, Florida SHEILA CHERFILUS-McCORMICK,
BILL HUIZENGA, Michigan Florida
AUMUA AMATA COLEMAN RADEWAGEN, GREG STANTON, Arizona
American Samoa JARED MOSKOWITZ, Florida
WARREN DAVIDSON, Ohio JONATHAN L. JACKSON, Illinois
JAMES R. BAIRD, Indiana SYDNEY KAMLAGER-DOVE, California
THOMAS H. KEAN, JR, New Jersey JIM COSTA, California
MICHAEL LAWLER, New York GABE AMO, Rhode Island
CORY MILLS, Florida KWEISI MFUME, Maryland
KEITH SELF, Texas PRAMILA JAYAPAL, Washington
RYAN K. ZINKE, Montana GEORGE LATIMER, New York
JAMES C. MOYLAN, Guam JOHNNY OLSZEWSKI Jr, Maryland
ANNA PAULINA LUNA, Florida JULIE JOHNSON, Texas
JEFFERSON SHREVE, Indiana SARAH McBRIDE, Delaware
SHERI BIGGS, South Carolina BRADLEY SCOTT SCHNEIDER, Illinois
MICHAEL BAUMGARTNER, Washington MADELEINE DEAN, Pennsylvania
RYAN MACKENZIE, Pennsylvania
James Langenderfer, Majority Staff Director
Sajit Gandhi, Minority Staff Director
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SUBCOMMITTEE ON AFRICA
CHRISTOPHER H. SMITH, New Jersey, Chairman
MARIA ELVIRA SALAZAR, Florida SARA JACOBS, California, Ranking
RONNY JACKSON, Texas Member
BILL HUIZENGA, Michigan SHEILA CHERFILUS-McCORMICK,
AUMUA AMATA COLEMAN RADEWAGEN, Florida
American Samoa JONATHAN JACKSON, Illinois
JIM BAIRD, Indiana PRAMILA JAYAPAL, Washington
JOHNNY OLSZEWSKI, Maryland
Joe Foltz, Subcommittee Staff Director
C O N T E N T S
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REPRESENTATIVES
Page
Opening Statement of Subcommittee Chairman Christopher Smith..... 1
Opening Statement of Subcommittee Ranking Member Sara Jacobs..... 3
WITNESSES
Statement of Sasha Lezhnev, Senior Policy Advisor on Behalf of
the Sentry..................................................... 5
Prepared Statement............................................. 8
Statement of Thierry Dongala, Founder, Accountable Africa........ 21
Prepared Statement............................................. 25
Statement of Joseph Mulala Nguramo, Nonresident Fellow, Atlantic
Council Scowcroft Center....................................... 28
Prepared Statement............................................. 31
Statement of Obert Bore, Responsible Business and Human Rights
Program Lead, Zimbabwe Environmental Law Association........... 37
Prepared Statement............................................. 42
APPENDIX
Hearing Notice................................................... 76
Hearing Minutes.................................................. 78
Hearing Attendance............................................... 79
Materials for the Record
Statement for the Record submitted by Rep. Cherfilus-McCormick... 80
Material for the Record, submitted by Mr. Manareldin (Manar)
Zarroug, Chairman, Omnia Ventures & Al Faisalia Limited........ 82
METALS, MINERALS, AND MINING: HOW THE CCP FUELS CONFLICT AND
EXPLOITATION IN AFRICA
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Tuesday, March 25, 2025
House of Representatives,
Subcommittee on Africa
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:03 a.m., in
room 2200 Rayburn House Office Building, Hon. Christopher Smith
(chairman of the subcommittee) presiding.
Mr. Smith. The subcommittee will come to order.
The purpose of this hearing is to examine the role of
Chinese-owned enterprises in fueling conflict, instability, and
human rights abuses in Africa, particularly in the mining
sector.
I do yield to myself for an opening statement.
OPENING STATEMENT OF CHRISTOPHER SMITH
I, again, want to thank everyone for being here, especially
our very distinguished witnesses, and so many others who are
very much interested in these very pertinent issues that,
unfortunately, are leading to great loss of life and all kinds
of human rights abuse. So, thank you for being here.
The extraction of valuable minerals has long been a double-
edged sword for many African nations. While these resources
hold the potential for economic development, their exportation,
particularly in manners irresponsible or under corrupt regimes,
has often fueled violence and instability.
The Democratic Republic of Congo has vast mineral wealth,
especially in cobalt and gold, and other very, very important
minerals, which has been a significant driver of conflict.
Areas of gold mining also fuels conflict in Ethiopia and Sudan.
Armed groups have profited from the extraction and smuggling in
these resources, financing their operations and perpetuating
cycles of violence.
The United Nations has reported that mineral smuggling
finances warfare with various military forces and commanders
exploiting illegal mining for personal gain.
In the DRC, it is also estimated that more than 70 percent
of the world's cobalt, some say as much as 75 percent--an
essential need for lithium ion batteries, for smart phones,
computers, and electric vehicles is extracted there with bare
hands, as thousands, and some estimates put it as high as
35,000 children by one of our witnesses today, Mr. Lezhnev.
Thank you for your very heavily footnoted testimony.
If that were not horrible enough, the 2024 Trafficking in
Persons Report also stated that ``observers noted that children
in many areas are vulnerable to sexual violence, including sex
trafficking, in part due to traditional religious beliefs that
harming children could protect against death or ensure
successful mining. Again, an absurdity, but that is what has
been said.
China's near monopoly over the output and processing of
Africa's minerals and resources ensures that these abuses
continue unchecked.
The expansion of illicit mining in Ethiopia has exacerbated
existing conflicts as well. Regional states and non-state-owned
actors vie for control over mining concessions, using the
revenues to bolster their influence and, in some cases, the
Chinese State authority. This competition has intensified local
disputes and undermined efforts toward national cohesion.
The civilian gold mining operations have been linked to
funding armed conflicts. The control over lucrative mining
areas often leads to violent confrontation between various
factions, further destabilizing the region and ending peace
efforts.
Illegal mining has led to environmental degradation and
social unrest. The involvement of foreign entities, including
Chinese nationals, in these operations have strained local
communities and shored up the tensions between the populous and
the authorities.
In response to these challenges I have reintroduced the
Cobalt Supply Chain Act. This legislation aims to ensure that
goods made using or containing cobalt refined in the People's
Republic of China do not enter the U.S. market, addressing
concerns that such cobalt is extracted and processed with the
use of child and forced labor in the DRC.
Then it comes back in our defense and commercial supply
chains, which is a national security issue. And the reliance of
China for these critical minerals is a clear vulnerability to
the United States and to the western world.
As co-chair of the congressional Executive Committee on
China, I held a hearing in November 2023 that highlighted the
problem of China's Communist Party dominance in the DRC's
cobalt supply chain and how China profits from these unethical,
profits from these unethical mining practices.
I also chaired a hearing in July 2022 of the Tom Lantos
Human Rights Commission on child labor and human rights
violations in the mining industry of the DRC. One of our expert
witnesses then said that child labor is one of the worst forms
of child abuse, and that is absolutely true. It is forbidden by
both Congolese legislation, as well as international rules and
laws. And, yet, it continues.
The various beneficiaries of this system, China's state-
owned mining companies, remain silent, refusing to confront an
undeniable reality from dirt to battery, from cobalt to cars,
the entire supply chain is built on violence, exploitation, and
corruption. This much change. And the time for change is now.
President Trump's executive order for ``immediate measures
to increase American mineral production'' is a crucial step
toward strengthening our domestic supply chains. This action
will create American jobs, drive economic growth, and reduce
our reliance on foreign adversaries.
The United States must break its dependence on minerals
that finance the Chinese Communist Party, often extracted
through forced child labor, and stop indirectly supporting the
CCP's efforts to fuel instability and regional conflict in
Africa.
At the same as the CCP tightens its grip on global mineral
markets, the U.S. must take decisive action. In line with this
strategy, the U.S. Department of State has expressed openness
to forming direct critical mineral partnerships with the DRC,
an opportunity to strengthen collaboration and secure resources
essential for our technological advancement and national
security.
Today we have a very distinguished panel of experts that
will help us know and give us guidance as a Congress, as a
committee, as to where we go next.
Before going to them it is my delight and my honor to yield
to Ms. Jacobs, our ranking member of this subcommittee.
OPENING STATEMENT OF RANKING MEMBER SARA JACOBS
Ms. Jacobs. Well, thank you, Chairman Smith. Thank you to
all of our witnesses for testifying today on the drivers of
conflict and exploitation in Africa's mining sector.
As we all know here, there is a long history of
exploitation in the mining sector on the African continent that
has resulted in environmental degradation, labor exploitation,
corruption, and other human rights abuse, and has rarely led to
actual prosperity for local communities.
There are many drivers of exploitation in the sector;
whether that be poor governance that allows corruption to
fester, weak traditional institutions that foster a culture of
impunity, lack of economic opportunity for marginalized
communities, and so on.
These conditions create an environment that is ripe for
exploitation by domestic and foreign companies alike. They can
act with impunity to cut costs by not adhering to
environmental, social, and governance status, to the local
corruption eating into their profits. That means poverty wages.
That means unsafe and deadly working conditions. That means
contaminated water in local communities. Ultimately, it means
putting short-term gains ahead of the long-term development,
stability, and success of the African continent.
There is no question that Chinese-owned and operated
companies are dominating and engaging in exploitative practices
in the mining sector in certain African countries. Many of
these companies, frankly, don't care about the corruption, and
are not as concerned by the blow to their reputation.
For example, just this month the Kafue River in Zambia was
declared dead after a Chinese-owned copper mine contaminated
the river. In response, the Zambian Government fined this
company a measly $10,000.
This impunity exists all over the continent.
We are also seeing other foreign companies operate in the
sector and be accused of corruption and human rights abuses.
For example, Glencore, a Swiss company, pled guilty in the
United States to bribing officials in Nigeria, Cameroon, Ivory
Coast, Equatorial Guinea, and the DRC, and ultimately agreed to
pay the DRC $180 million in a settlement deal.
Last year the Biden administration sanctioned a UAE-based
gold company for purchasing gold from the Rapid Support Forces
in Sudan, ultimately fueling the war and the RSF genocide.
Famously, Israeli businessman Dan Gertler was exposed and
subsequently sanctioned for hundreds of millions of dollars
worth of opaque and corrupt mining and oil deals in the DRC.
We will continue to see these practices until we address
what is actually fueling exploitation in the first place.
Meanwhile, the United States has long attempted to increase
U.S. investment in Africa's mining sector as a means to secure
our supply chain and compete with China. But these investments
won't come to fruition, and won't be advantageous or strategic
in the long term if they do not meet high environmental,
social, and governance standards, to ensure our investments are
bringing benefits rather than more exploitation.
To do this, the U.S. Government and U.S. companies need to
consult with local communities on new investments to obtain
their consent and assess the impacts the project is having
local populations. If we don't do this, U.S. companies will be
on the wrong end of protests and public scrutiny experienced by
Chinese-owned and operated companies.
That is why I was so disappointed that the Trump
administration recently moved to pause the enforcement of the
Foreign Corrupt Practices Act, which is a law that prohibits
the bribery of foreign officials to obtain a business
advantage, and requires transparency for companies.
This is the exact kind of law we need to make sure our
investments are good. So, I urge the Trump administration to
reinState the enforcement of this law immediately.
I also continue to be alarmed by the devastating impact of
President Trump's foreign aid freeze, including on U.S. efforts
to address exploitation in the mining sector. The Trump
administration has terminated programs that were improving
accountability in DRC's mining sector, working to prevent
mining-related violence through dialog, and enhancing
transparency and addressing corruption in the extractive
sector.
If we are serious about addressing exploitation in the
mining sector, and bringing mutual benefits to both Africans
and Americans, then we need to bring all of our tools to the
table.
I look forward to hearing more from our panelists about
what is driving exploitation and how we should address it.
Thank you. I yield back.
Mr. Smith. Thank you, Sara.
I would like to, before recognizing our distinguished
panel, recognize a former Member of Congress, and a very
distinguished one at that, who has been very active on all of
these issues, Mark Walker.
Thank you, Mark, for being here and for bringing three
Congolese Americans with you who are extremely interested,
Adrian Boronse, Alain Buka, and Wilson Tatay. Thank you, Mark,
again for meetings we have had recently as well as in the past
on all of these relevant issues. You are tremendous, thank you.
I would like to now introduce our distinguished panel,
beginning first with Mr. Sasha Lezhnev, who is a senior policy
advisor at The Sentry, an investigating and policy organization
that seeks to disrupt predatory networks that benefit from
conflict, oppression, and kleptocracy in Africa and beyond.
Sasha has spent the past 25 years working on human rights,
conflict, corruption, and U.S. policy in Africa. He has worked
with the Enough Project. We were just reminiscing about some of
the past fights about Darfur and other issues when he has been
here before as a very prized witness.
I thank him. Also he has worked with the U.S. Institute of
Peace.
We will then hear from Thierry Dongala. Welcome back.
Thierry used to sit here as a member of this subcommittee staff
and did a tremendous job at that. He is the founder of
Accountable Africa, which conducts supply chain investigations
for gold and precious minerals traders, and provides due
diligence reporting for investors in Africa.
Previously he worked, as I said, on this committee as a
very distinguished member of the staff. We do prize his
insights.
In meetings prior to this he had a lot of good information
for the committee about this, which helped us frame this, this
hearing.
I want to thank you for that.
We will then hear from Mr. Joseph Mulala Nguramo.
Mr. Nguramo. Yes, sir.
Mr. Smith. Thank you.
He is a nonresident fellow with the Freedom and Prosperity
Center and in the GeoStrategy Initiative in the Atlantic
Council's Scowcroft Center for Strategy and Security.
He was born and spent his formative years in the Democratic
Republic of the Congo. He was the first, and thus far, I
believe, Congolese graduate from the United States Military
Academy--what a great accomplishment that is--at West Point,
where he majored in defense and strategic studies.
Then we will be hearing from Mr. Obert Bore, who is a
Zimbabwean lawyer coming in from Zimbabwe--and I thank you for
being online here--in legal research. He works on international
trade and China's investments in Africa, natural resource
governance, and climate governance issues.
Previously, Obert coordinated the alignment of Zimbabwean
laws with the 2013 Constitution, and served as a research clerk
for the Chief Justice of Namibia, and where he provided
research support to judges in drafting of court judgments.
Thank you.
I will now yield to Sasha for such time as he needs.
STATEMENT OF SASHA LEZHNEV
Mr. Lezhnev. Thank you so much, Chairman Smith, Ranking
Member Jacobs, and distinguished member of this subcommittee.
You are real champions for human rights, and I greatly
appreciate that.
I personally witnessed the horrors of child soldiers and
child miners as young as 8 years old in mines in the Democratic
Republic of Congo, as well as warlords, and Chinese, and other
companies profiting from this exploitation, all in the name of
getting us cheaper smart phones and cars.
This has got to stop.
Africa holds 40 percent of the world's critical minerals.
China made a strategic decision a decade ago to procure them,
spending well over $10 billion acquiring mines. But the
investments have come with corruption and human rights abuses.
Nowhere have these problems been more acute than the
Democratic Republic of Congo, the world's largest producer of
cobalt and tantalum, and the second largest producer of copper.
Corruption is on the increase since the China-DRC megadeal
worth $6.2 billion in 2008.
The DRC's corruption rating is lower today under President
Tshisekedi than under his predecessor Joseph Kabila. My
organization, The Sentry, investigated these deals and found
$238 million and then $55 million that went missing. The major
Chinese and other mining contracts remain opaque today.
Unfortunately, corruption has not been limited to the
Chinese. International tycoon Dan Gertler was sanctioned in the
first Trump administration after his corrupt mining and oil
deals led the DRV to lose $1.3 billion.
Human rights is also worsening, with increasing oppression
and thousands of child miners working at mines to send cobalt
mainly to Chinese crude refiners. The president's security
forces illegally control mines, and thousands of people have
been forcibly evicted to make way for Chinese mines in
particular.
Another mineral, gold, which you highlighted, has also been
at the heart of this escalating conflict in Eastern Congo,
which has displaced 6.5 million people. It is the world's third
largest displacement crisis.
Gold is a cheap source of revenue for armed groups. Backed
by Rwanda, M23 has taken over gold mines. Rwanda's new refinery
was sanctioned by the European Union last week after exporting
$800 million worth of gold, and illegally profiting from
conflict gold. This gold is then smuggled to the UAE, China,
and other countries.
China has been active in the conflict gold trade, from a
$38 million operation where a Chinese company paid armed groups
for access to 400 illegal mining operations in South Kiva, that
have allegedly smuggled up to eight tons of gold annually
following bribes.
China is purchasing record amounts of gold today,
potentially to establish a new BRICS currency that would chip
away at the U.S. dollar.
This is not a hopeless situation. Leverage exists in these
supply chains, and the U.S. Government, electronics companies,
and banks in particular, can make an impact in three areas.
The biggest obstacle to eliminating mining abuses is the
system of kleptocracy in the DRC. This state--the system of
State capture allows ruling elites and their commercial
partners to personally profit while leaving the population to
suffer from poor security, education, and health care. They use
violence to maintain power and repress dissent.
This system will continue unless there are consequences for
that corruption. Addressing this would also level the playing
field for U.S. companies.
The Treasury Department under Secretary Bessent should
robustly investigate and sanction the networks that facilitate
grand corruption, from refineries in Uganda, Rwanda, and the
UAE where they trade in conflict gold, Chinese middlemen, and
senior DRC officials who facilitate bribes and aid illegal
armed groups like the FDLR.
There must also be judicial accountability for abuses. The
Administration and Congress should support the establishment of
a DRC transitional justice mechanism, as advocated by Nobel
Peace Laureate, Nobel Peace Prize Laureate Dr. Denis Mukwege.
Second, U.S. Government has a key role to play in combating
the conflict gold trade in particular. Secretary of State Marco
Rubio should lead a public-private initiative to combat illicit
gold, partnering with the London Bullion Market Association and
bullion banks. The initiative should both increase gold trade
data transparency to ensure that sanctioned bodies aren't
behind the curve of criminal actors, and empower independent
monitoring teams to inspect and certify gold smuggling ops,
such as cash-for-gold markets.
Secretary Rubio and Secretary Bessent should also establish
an illicit gold task force to robustly investigate and sanction
trafficking networks. As part of it, Treasury's Financial
Crimes Enforcement Network, or FinCEN, could issue alerts and
keep banks updated.
Third, China still needs U.S. markets. So, Tesla, Apple and
others have important leverage over Chinese suppliers. Sunlight
is the best disinfectant to clean up corruption, especially
through mining contract transparency.
High tech and auto companies should use their buying power
to require Chinese and all suppliers to publish the ownership
structures of mining companies' contracts and service
providers; hire the Congolese workforce directly, not through
subs; and source only from crude refiners of cobalt and cooper
that have passed the electronics industry audits by a
responsible minerals initiative.
Relatedly, the State Department and companies should
strongly urge the DRC mining industry to create more artisanal
mining zones to give miners a legal space to operate and reduce
abuses.
Finally, it is important that the Administration should
nominate an Assistant Secretary of State for African Affairs
with urgency, to coordinate responses to the DRC and all of
these crises.
In sum, the U.S. Government, in coordination with the
electronic companies and banks, can combat the abuses and
corruption by China and others in the mining sector and reduce
risks for U.S. businesses. I sincerely hope that progress is
made so Congolese and other mining communities in Africa no
longer experience the horrors that I have personally witnessed.
Thank you very much.
[The prepared statement of Mr. Lezhnev follows:]
Mr. Smith. Thank you very much. Thierry?
STATEMENT OF THIERRY DONGALA
Mr. Dongala. Chairman Smith, Ranking Member Jacobs, and
distinguished members of the committee, thank you for the
invitation to testify on metals, mining, minerals, and how the
CCP fuels conflict and exploitation in Africa. Your leadership
and interest in this topic is timely and warranted, as the
majority of the conflict zones in Africa are around mineral
deposits.
So, as a due diligence firm that has conducted supply chain
investigations in various countries, ranging from Tanzania to
Sudan, Ethiopia, DRC, Ghana, Cote d'Ivoire, and so forth,
accountable Africa has been on the front lines of steering
investors and traders away from the pitfalls of illicit mining
practices and networks which are ever growing.
Within saying any names, I just want to thank those
responsible investors and traders that we have worked with over
the past 5 years who have shown the courage to do business
responsibly. All too often our due diligence reports have given
them the tough counsel of having to turn down lucrative African
mineral deals for the sake of maintaining their clean
conscience and protecting their reputation, which for them may
cost.
We are sure it wasn't easy to explain to their
shareholders, you know, that they had to forgo these steep
discounts and wildcat profits. But I just want to, I just want
to let them know that they maintained not only a clean
reputation and conscience, but they respected the dignity of
the African communities in which they operate.
I would like to start this testimony, also, with a personal
story.
When I got married in the Congo, Pastor Dede held our
wedding bands and he kind of weighed them and was, like, this
is real gold I think. After he said, you know, this is real
gold, he held the wedding bands up and kind of had a prayer, a
sanctification prayer, saying, you know, whatever the trail of,
the trail of supply for this gold, these gold rings, may it be
sanctified to start, you know, a heavenly union.
This kind of surprised me because, you know, I am in the
business of conducting supply chain investigations, and here I
am in a church and the pastor is bringing it up. It kind of
brought to mind how familiar, all too familiar the Congolese
are with the trail of sin and suffering that can follow behind
these minerals: gold, cobalt.
This is we are talking about an issue that is not far from
the common, from the common man on the streets, whether it is
in the Congo, or in our iPhones here in, in Washington.
The part that matters the most, I would say, is what is
clean gold? We have so many standards floating out there that
it gives wiggle room for people to, for people to abuse the
systems of certifications. I mean, this is at the source of
what a lot of the conflict and a lot of the exploitation comes
from, because a lot of them are wiggling out of accountability
because they are getting certified. Some people are considering
it clean, and others aren't.
So, going on to that point of a moral standard needing to
be established in the industry, today we can witness that there
are too many unaccountable and foreign entities that get to
determine what makes minerals clean in Africa.
My colleague Sasha mentioned LBMA, which is one of the good
bodies trying to do a lot of proactive work. But at some point
these bodies need to come together. UAE has their standard,
LBMA has their standard.
So, stemming from--stemming the corruption and the conflict
fomented by the bad actors that take advantage of this wiggle
room will require us standardizing that definition of what is
clean.
I wanted to--don't want to be too verbose, but I kind of
want to share another anecdote.
You know, today some western, you know, audit firm can
certify something clean and, and, you know, they have never
been on the ground. Or if they go on the ground, it is a show
of, you know, 2 or 3 hours and they, they go, take the goods
and go.
But I want to say how local fishers in the Congo can have a
different perspective than these audit firms. A local fisher
can look by looking at the--I'm sorry--oh, yes, a local school,
can then start by the local school. A local school can look by
the, local school principal can look by the attendance of the
schools.
A lot of times when you introduce cash into the gold mines
you start to see attendance levels, especially the primary
schools, dip. The principal could probably tell you if the gold
mine is clean or not, because a lot of his students are going
to the gold mine because there is cash.
The local fishers also can tell you just by the, just by
the, you know, impact of the fish that they are catching, the
environmental impact.
This sort of moral standard needs to take into account
local, I would say local mechanisms for judging the cleanliness
of the minerals.
When governments or communities get serious about enforcing
a standard of cleanliness for mining activity, bad actors can't
operate, as Sasha mentioned. You turn on the light, light is
the biggest disinfectant.
I like to say when you turn on the lights the roaches
scatter. You know?
This, you know, this African moral sovereignty that, that
we need to include into accountability standards requires, you
know, the retreat of foreign--not necessarily the foreign or
foreign authorities, but at the same time we need African moral
leadership to rise to the occasion.
We have seen it with the case of ITSCI where they tried to
establish a standard of, of certification. This was based in
Kigali. But based on the testimony of the witness, this was a
compromised certification process. You know, the Global Witness
issued a report in 2022 that the ITSCI was effectively a
laundromat, how a due diligence scheme appears to launder
conflict minerals.
So, this is an example where we have these various
authority structures claiming something is clean, and then it
gives wiggle room. Next thing you know they are fueling,
funding conflict.
I want to recommend two more things apart from
standardization of the moral, of what is clean gold.
I want to recommend competition. This is something that
doesn't cost the U.S. Government anything.
Right now there is we are at a stage of all, all pretty
much sanction is our main tool, which is it is effective on the
ground. But I believe that we can do not necessarily all
carrot--all stick and no carrot. I think we could add a carrot
to that stick.
Under existing authorities, OFAC has authority to license
activities. So, if we could encourage traders to, to apply for
licenses, this would effectively give, bring competition to the
space. Because right now in countries like DRC, Sudan, and all
the others that have network sanctions in place, what happens
is as soon as the sanction system is in place investors and
bankers want to usually finance the mining activities run away,
because they don't have time to decipher between the good and
the bad actors.
What happens is even the good actors, the ones that are
willing to be accountable, they will run away. Not necessarily
run away, they will run to the only competition that is still
there. That is usually the Chinese and other bad actors.
If we could establish kind of a licensing channel, which
the authorities exist, where traders can actively, proactively
submit their trading data to OFAC to maintain their licenses,
not only will OFAC be able to stay ahead of the curve of
illicit gold trends, because they will be gathering data, but,
also, we would be rewarding those who are doing good in the
space where there is gold, cobalt, and others.
In the absence of competition, we have given the market
over to bad actors, including the Chinese.
The last recommendation, I think it is quite just a
development recommendation. It is supporting industrial energy
projects, like the Grand Inga Dam in the DRC.
How does that matter?
Well, doing this will make the economics of exporting
processed minerals to China comparatively costly. Right now the
race for strategic minerals is not for the deposits but for the
refining capacity. China controls over 85 percent of the
world's refining capacity for rare earths. It is because energy
is cheap is China.
Prioritizing the DRC's launch of the Grand Inga Dam project
will undercut China's export-led growth model that dumps
products and labor in Africa, while also interrupting China's
mineral extraction barter system that circumvents the U.S.
dollar in Africa.
You know, this, this is really key because if energy is
cheap in DRC and the minerals can be processed in DRC and
transformed, there is no need to send it to China.
Last, I want to end on a warm note.
I just came back from Sudan where I conducted another
supply chain investigation. It was during the month of Ramadan.
The mining community I visited in the north didn't have much,
you know, external wealth, but you couldn't guess it from the
amount of food and charity they shared at the breaking of their
fast with me. Though everyone was living through a civil war,
because Sudan, right, a civil war, they all joined in their
hard knock pursuit of gold at the mining site, these
communities maintained the utmost hospitality.
It reminded me that the mining activity doesn't happen in a
void, but within a social fabric that must be respected. By
visitors, investors, governments alike, this social fabric can
be respected. But we notice that this is a challenge of the
African model in Africa: they don't respect the social fabric
in mining communities, which we can.
Thank you.
[The prepared statement of Mr. Dongala follows:]
Mr. Smith. Thank you.
I now recognize Mr. Nguramo.
STATEMENT OF JOSEPH MULALA NGURAMO
Mr. Nguramo. Thank you, sir. Thank you.
Thank you, Chairman Smith, Ranking Member Jacobs, and other
members of the House Foreign Affairs Subcommittee on Africa for
the invitation to testify on metals, minerals, and mining, and
how the CCP fuels conflict and exploitation in Africa.
My name is Joseph Mulala Nguramo. I am a Congolese
national, and I grew up in the war-torn region of Kivu in
Eastern Congo, particularly Goma. I was honored to graduate
from the United States Military Academy at West Point in 2014.
I am currently a nonresident fellow with the Freedom and
Prosperity and Scowcroft Centers in the Atlantic Council.
I am grateful to the U.S. and the American people for the
great opportunity to dedicate my professional career to the
building of U.S.-African relations, as well as promoting
democracy, freedom, and good governance. I am humbled and
honored to be invited here to share my thoughts on these
issues.
My testimony will look at the impact of China's mining in
the DRC and the implications to U.S. national security in the
region.
The DRC's wealth in natural resources is estimated at $24
trillion, representing 70 percent of global cobalt, and proven
reserves of gold, coltan, lithium, copper, and diamonds.
As long as the Chinese Community Party controls the mining
sector of the DRC, the entire region remains economically
fragile and threatened by civil unrest. The CCP has been
playing a predatory game globally, fueling conflicts and
corruption, encouraging bad governance, emboldening the rise of
autocratic regimes, autocratic and tyrannical regimes, leading
to a significant regression of democracy around the world, as
the Atlantic Council Freedom and Prosperity reports have
demonstrated.
Currently, the volume of trade between Africa and China is
estimated at $280.1 billion, and is rising steadily by 1.5
percent annually as of last year. Yet, almost all investments
are in the mining and infrastructure sectors, without long-term
benefits to the countries' GDP and the populations.
Indeed, the CCP routinely operates in shadow of governments
that lack transparency, and care little for human rights and
democracy. I wish to argue that political, political and social
stability in the DRC is essential to U.S. national security.
In the DRC ongoing civil unrest and unmitigated human
rights crisis, humanitarian crisis, are largely due to China's
ruthless and irresponsible grip on the country's natural
resources. Controlling almost 90 percent of the Congo's mining
sector, the CCP has failed to use its economic and financial
power to defend and promote the rule of law, freedom, and
quality of governance, but has, instead, mastered strategies to
take advantage of a country in chaos.
China has significant economic interests in the DRC, and to
just, to just name an additional example, in Sudan, and, yet,
the countries are at the precipice of collapsing, becoming
failed states, no different than the current situation going on
right now in Haiti. While the U.S. Government has come to
characterize the ongoing massacre in Sudan as a genocide, I
will focus more on the DRC, because the nature and the
character of the ongoing conflict between Rwanda and the DRC
are of a magnitude to destabilize the entire region and
significantly impact U.S. national security.
The DRC's minerals have become essential in a world
transitioning to clean energy, and are a key component in
microchips and semiconductors which we use in our critical
infrastructure and advanced weapon systems technology,
including missile defense, fighter jets, satellites,
communication equipment, and the related research and
development.
Unfortunately, the current DRC Government lacks the
competence and leadership to ensure a safe and a consistent
supply of these products. It has, instead, allowed China to
control its mining sector. Given this situation, the U.S. and
its allies' national security will be experiencing growing
dependence on the CCP's global supply chain. This process will
be precipitated as the DRC and Rwanda are on the brink of a
war, and the stability of the entire region is threatened. The
latest developments in Sudan and the African Great Lakes Region
are cause for alarm.
The CCP mercantilist model is aimed at securing monopolies
over critical natural resources and to create illegitimate and
unstable political systems in places like the DRC and Sudan,
planting the seeds of civil unrest, violence, and wars. Despite
the dominance in the DRC mining sector, the CCP has failed to
advocate for implementing good governance, defending human
rights, fighting corruption, and protecting fair and good
elections, to ensure sustainable stability and prosperity.
For example, China demonstrated no interest at all in the
transparency and legitimacy of the DRC's Presidential elections
in the past elections. Not surprisingly, China has remained
silent about the DRC Government's widely understood abuse of
power.
A similar trend of violence and humanitarian catastrophe
can be observed in Sudan. Despite investing billions of dollars
in oil, China has stood by as Sudan has become a failed State.
China even opposed United Nations Security Council resolutions
to hold the Sudanese Government and the rebels accountable for
the genocide, all in the interest of its own gain. In exchange,
the Sudanese Government backed China's stance on issues like
the Hong Kong National Security Laws and the Xinjiang conflict.
According to Transparency International's 2024 Report,
Corruption Perceptions Index, about 90 percent of African
countries scored below 50, indicating high levels of corruption
and mediocre governance. Just the Sub-Saharan African alone
scored an average of 33 percent out of 100, making it the
lowest scoring region globally.
The U.S. Government reports on global business Climate,
religious freedom, human trafficking and rights, support and
document these allegations. China remains indifferent. As long
as China remains indifferent, as long as China empowers
undemocratic regimes for its own gain, the future of democracy
remains fragile.
Through its Belt and Road Imitative, the CCP controls about
40 percent of global energy reserves. It does so by
disregarding human costs and the nature--the nature of
governments it works with. Just in the DRC alone, China has
come to control almost 90 percent of the producing sector, led
by the Chinese companies such as China Molybdenum, Huayou
Cobalt, and NORINCO.
The CCP defense contractor NORINCO, as it turns out, also
acquired stakes in the DRC, has been looking to acquire stakes
in the DRC defense and security sector, and has been supplying
weapons and military drones to various participants in the
ongoing DRC conflict.
China, by failing to control the distribution of military
weapons, continues to fuel the conflict.
Alternatively stated, combined with its veto power at the
U.N. Security Council, China has failed to use its economic and
financial power in Africa to defend and promote the rule of
law, freedom, and quality of governance, and to help prevent
conflicts. Ultimately, political and social chaos in Africa
benefits China's economic interests by keeping Western
investments and collaboration at bay.
To conclude, the Chinese model is based on exploiting
Africa's natural resources to the detriment of U.S. national
security interests. Concurrently, it props up corrupt political
systems held in place by predatory and kleptocratic elites who
enrich themselves at the expense of their own citizens. These
systems perpetuate poverty and lead to regional conflicts and
wars, as can be witnessed in Sudan and the DRC.
The U.S. national security approach countering China in
Africa should be by a bipartisan concern, transcending
Administrations and short, and short-term thinking. The U.S.
needs a comprehensive and a coherent long-term grand strategy,
not just focused on Europe, Asia, and Latin America.
Africa is the future of the world because of its growing
and dynamic young population and abundant natural resources. I
hope that the U.S. Government and its allies will do their
utmost to avert a regional war in the DRC and bring stability
to the region. There have been years of passivity and inaction
regarding Africa, and the U.S. has been too slow to recognize
how its own national security interests are tied to peace and
stability and economic development of the African continent,
especially Central Africa.
It is crucial that the U.S. counter China's grip on natural
resources within the region in the interest of its own national
security, democracy, and human rights in Africa. The United
States should take its responsibilities, as the moral global
leader of the international rules-based international world
order. If the U.S. fail to lead, who else will?
Certainly in the absence of U.S. global leadership and
engagement, the vacuum will be filled by autocratic,
repressive, tyrannical, and authoritarian regimes, as we are
seeing in Venezuela, North Korea, Russia, Sudan, and the DRC,
unfortunately backed and aligned with the CCP.
I appreciate your attention to these issues and I am
looking forward to your questions.
Thank you.
[The prepared statement of Mr. Nguramo follows:]
Mr. Smith. Thank you so very much for your testimony and
your insights.
I would like to now recognize, from Zimbabwe, Mr. Bore.
STATEMENT OF OBERT BORE
Mr. Bore. Chairman Smith, can you tell me if you can hear
me?
Ms. Jacobs. We can hear you. Thank you.
Mr. Bore. Thank you.
Chairman Smith, Ranking Member Sara Jacobs, and
distinguished committee members, I appreciate this opportunity
to testify before this committee on metals, minerals, and
mining, and how the CCP fuels conflict and exploitation in
Africa.
I am indeed honored to appear before you today.
I serve as a Program Lead on Responsible Business and
Investments of the Zimbabwe Environmental Law Association, a
public interest law organization with over 20 years of using
the law to promote equitable----
Beg your pardon?
Ms. Jacobs. You can keep going.
Mr. Smith. Please continue.
Mr. Bore. Thank you.
As I was saying--there is a buzz, I think.
Mr. Smith. Not on our end, but on yours?
Oh, good.
Mr. Bore. I serve as the Responsible Investments and
Business Program Lead for an organization called Zimbabwe
Environmental Law Association, which is essentially a public
interest law organization with over 20 years of experience
using the law to promote equitable, just, and sustainable
natural resource management, economic benefits, and protection
of the rights of marginalized communities in Zimbabwe and the
Southern Africa region.
Before I share my insights and perspective on what drives
conflict and exploitation in the mining sector of Africa, allow
me to provide some context and why Africa is a key player in
the global mineral supply chains.
I think I don't have to tell you that I am alluding to the
fact that Africa is endowed with abundant mineral resources.
The continent actually is home to an estimate of 30 percent of
the world's mineral reserves, with 8 percent of natural gas, 12
percent of the world's oil reserves, and 50 percent of the
world's gold, as well as 90 percent of the global chrome. With
these abundance of metals and minerals, the sector is actually
the backbone of several African economies, and continues to
generate significant foreign currency and revenue, as well as
creating opportunities for employment.
Forty-two out of 54 African countries are classified as
resource dependent. This isn't normal. This tells us that the
entire African continent depends on these minerals for revenue
generation.
According to the African Union's Africa Mining Vision,
recognizes the potential of mining in driving broad-based
economic development on the continent.
In terms of critical minerals required to transition to
renewable energy and meet the planet's goals, Africa also
occupies a strategic position. The continent holds about 70
percent of the world's cobalt, 60 percent of the world's
manganese, 25 percent of the world's bauxite, and nearly 15
percent of the world's copper, among many other critical
minerals.
Zimbabwe, where I am from, where I was born, has the
largest lithium reserve in Africa and sixth in the world, as
well as the second largest chrome deposits in the world. Thus,
without a doubt, mining continues and should drive economic
development of the continent.
However, while mining presents great economic opportunities
for development, it has not been, you know, easy for the
continent to harness and maximize benefits from these metal
resources. The sector has been blocked by governance challenges
due to structural problems, there has been years of corruption
that has remained a significant barrier to responsible
investments in sustainable mining.
Several companies, both Chinese and non-Chinese, have been
implicated in corrupt practices to secure mining concessions.
You all know of the cases of Glencore where they accepted to
pay fines as a result of using bribes to, you know, secure
mining and oil contracts in multiple African countries.
We also have companies like Bollore, a French company, that
was fined 12 million for corrupt charges in Togo.
Similarly, Chinese entities like China Nonferrous Metal
Mining Corporation, as well as China National Oil Corporation,
have been implicated in corruption in both Zambia and DRC, and
even in Nigeria. While these are just examples of large
corporations implicated, they are not the only bad guys. They
are simply the ones which were caught on the wrong side.
For years, places like Kivu in the Congo have been
afflicted by conflicts intricately linked to its vast mineral
resources. Various actors, including multinational
corporations, have also been implicated in activities that
exacerbate these conflicts. Some of the major tech companies
from the U.S., Apple, have also faced some scrutiny over the
potential use of conflict minerals, such as tin, tantalum,
tungsten, and cobalt from DRC.
Linked to these governance challenges fueling tensions and
conflict among communities and mining corporations, African
countries have outdated mining laws which create loopholes that
foreign entities can exploit. For instance, Zimbabwe uses a
1961 piece of legislation that was created at a time when the
country was under colonial rule. As an organization, as a
mining and metal organization, we have been advocating for
reform of the Mines and Minerals Act to include provisions for
higher standards for transparency in how mining rights are
awarded.
So, essentially, many African countries, you know, they
have weak regulatory frameworks that do not reflect the
changing global contexts that require higher standards of
environmental, social, and governance requirements.
A case is point is where a Chinese company by the name
Nikita Minerals, which operates the largest lithium project in
the world, and the largest project in the world and the largest
in Zimbabwe, polluted a major community dam and was merely
fined 5,000 U.S. dollars, a figure that neither reflects the
environmental harm nor impact on the community itself.
There was a similar case in Zambia, which I am glad Member
Sara Jacobs mentioned earlier, in Zambia where the company was
simply fined 10,000 for environmental pollution, despite the
enormous environmental public damage that resulted from that
pollution.
So, beyond regulatory gaps and weak institutions,
challenges in the sector are coupled with high levels of
unemployment on the continent, which creates opportunities for
predatory employment practices where companies tend to employ a
vulnerable labor force which is often exploited easily, as they
are desperate for jobs. In the DRC, Zimbabwe, Zambia, and many
other countries, both Chinese and Western companies have been
accused of underpaying workers and failing to provide adequate
safety equipment, providing a workplace, you know, safe
equipment.
We know of several workers whose employment contracts have
been terminated for seeking to enforce their constitutionally
guaranteed labor rights.
Another important factor aiding the exploitation of
Africa's minerals is the continent's desperation for investment
to finance development. This has resulted in several resource-
backed loan agreements being signed, where African governments
have been exchanging mining rights or mineral resources for
infrastructure development.
In theory, if the borrowing process is carried out
transparently and effectively, and if the loan has favorable
terms, and the infrastructure projects are well selected and
executed, the transaction would be expected to generate
positive returns for the borrowing countries. However, this is
not the case.
As of 2018, more than 11 African countries had signed
resource-backed deals with Chinese financial institutions whose
terms are often opaque and result in unsustainable debt levels
and exploitation of natural resources. A case in point is
Angola's deal with Export-Import Bank of China which raised
serious concerns about transaction ability.
For China, it is evident that it is strategically using its
financial muscle through resource-backed loans to exploit
natural resource and court African governments into sweet deals
which are difficult to turn down, as they are difficult to turn
down, as most African governments require funding development.
In some instances, the opaqueness of these deals have resulted
in some governments actually questioning efforts due to, you
know, those contracts.
As the scramble for critical minerals intensifies and draws
our attentions, it is evident that the resource-rich countries
are more prone to conflict and social instability that are
linked to their mineral resources. One of our recent studies in
Zimbabwe, Mozambique, and DRC has revealed several instances of
forced displacement linked to extraction of critical minerals
resulting in social unrest and violation of human rights.
For instance, in Zimbabwe Chinese lithium mining projects
in areas such as Buhera, Kamativi, Nikita, and Gwanda, have
contributed to social tension due to local real intangible
community benefits, as well as unfair labor practices.
As if that is not enough, these mines increased competition
over water between communities and companies, given that the
purpose of processing high worth lithium is water intensive.
I might mention, worked lithium foundries in Zimbabwe is
concentrated, is concentrated in water-strained regions, which
makes it very, very difficult for companies to extract the
water, but also increases competition with communities to use
water that they need for everyday life.
A study by the Business and Human Rights Resource Centre on
the impact of China's global investments in--investments on
human rights, between 2013 and 2020, shows that Africa has the
second highest number of human rights abuses that are recorded
against Chinese companies. In the fact of these violations,
communities impacted struggle to access remedies and seek
redress because of captured judiciaries.
Furthermore, several Chinese mining projects are linked to
cases of forced displacement. For instance, a BYD-sponsored
project by Shenzhen Chengxin Lithium Project in the eastern
part of Zimbabwe has been hailed as a good example for
responsible mining project, yet, several communities from this
area were not adequately compensated and there was
displacement. In places like Cabo Delgado in Mozambique, there
have been serious tensions as a result of projects like Total
Energies who have been exploiting.
So, evidently, it is not only the Chinese who are
contributing to fueling conflict and exploitation of Africa's
mineral resources, there are several other companies that are
not Chinese that are also, you know, complicit.
In coming to my conclusion I also make four recommendations
on what the U.S. Government can do.
One of the key things we think is important is to review
the engagement strategy with Africa that is going to secure
critical minerals to ensure prosperity.
African governments are now inviting exports for
unprocessed minerals in line with the recently launched Africa
Agreement on Strategy, which was just launched in Ethiopia and
Addis Ababa last week. The idea was to compel initiation and
validation of projects on the continent. This provides an
opportunity for the U.S. to strategically provide the requisite
schemes and knowledge by setting up refining plants in
partnership with African actors.
Second, while the U.S. Government is currently engaging
with the DRC for a deal for critical mineral security it should
expand its engagement codes of, you know, dealing with Angola,
DRC, and Zambia, of course and other, including other cases.
But one of the key things we know is that need for
technical assistance around responsible mining, traceability,
and responsible standards. Zimbabwe, as many African countries,
are looking for potential partners to break the cycle of
Chinese dominance. It is important for me to highlight that due
to sanctions for countries like Zimbabwe, they felt abandoned,
and China took advantage.
In some context it was of the desperation to look for the
lowest suitor available, China became one of the investors that
was there for the country to, you know, allow mining deals.
So, I think we need to ensure that the U.S. Government
rethinks its sanction regime in countries like Zimbabwe because
when sanctions were imposed by the U.S. Government, it created
a void in companies that are disinvested, created an
opportunity for a Chinese company. So, I call upon the U.S.
Government to also look at its sanction regime on Zimbabwe.
Third, I think my colleagues before me have already talked
about providing alternative markets, and diversifying the
investment portfolio for the continent.
But my last recommendation is supporting democratic or
democratic governance actors, particularly NGO's that are
working to improve the regulatory frameworks and enforcement
capacity around State institutions. Because the role of civil
society in exposing corruption, human rights abuses, cannot be
understated. It is crucial for the U.S. Government to rethink
again foreign funding toward institutions, and for U.S.
companies just three key recommendations.
U.S. companies that are contemplating investing in Africa,
they should set higher standards for environmental, labor, and
governance. This is crucial for them to manage reputational
risks and also avoid clashes with the local populations. It is
vital for us to ensure that we have something to compare with.
Currently in countries like Zimbabwe, for instance, there
is nothing to compare with. So if we say Chinese are bad, but
there is not a lot of western investment that can be compared
with for say the best practice or the benchmark, U.S. companies
should also ensure that with their investing in Africa,
communities are benefiting from these natural resources by
putting in place community benefit sharing mechanisms on
corporate social responsibility. This has been done somewhere,
and it has worked.
Last, I think I want to emphasize due diligence as a key
recommendation, that there is proper due diligence when
communities where the minerals are being extracted are actually
consulted in the process of order. I think the colleagues
before me have mentioned how some of the actors are not
inclusive, you claim that a company is undertaking due
diligence setting up in Europe or the U.S., communities where
the mineral is coming from have actually not been consulted.
In conclusion, the U.S. has an opportunity to initiate and
enter into critical minerals deals in a transparent manner,
with higher ESG standards, and provide alternatives to counter
Chinese dominance. With better options and alternatives,
African governments may begin to see how certain deals,
resource deals with Chinese are predatory and not beneficial
for Africans. This can also serve as an example of how
responsible investments can be done.
Thank you.
[The prepared statement of Mr. Bore follows:]
Mr. Smith. Thank you so very much for your testimony.
I have a million questions, but I will save two because we
do have such a great turnout for this hearing, underscoring the
importance so that members on both sides of the aisle
contribute to it. So, I will come back and ask other questions
in the second round and anything else we would like to do then
as well.
In 2008 I traveled to Goma when very credible reports
surfaced that U.N. Peacekeepers were raping young children as
young as 12 and 13, bribing them, and for a meal were
exploiting them sexually. I went over there.
I chaired four congressional hearings on the issue. Kofi
Annan issued his zero tolerance policy, which sounded good. Jay
Harold Loop from the U.N. came and testified. Very well-meaning
and he was very sincere. But it didn't vary at the lack of
enforcement of the zero tolerance policy. I held an additional
hearing about zero compliance with the zero tolerance policy.
Because, again, words are great. Policies are great. But if
they are not enforced, they are close to being meaningless, if
not worse, because they give a false sense of hope.
This year's Trafficking Victims Protection Act, the report,
the TIP Report for 2024 in the Congo points out, and I quote,
that in 2020 ``the DRC's Minister of Human Rights issued a
decree increasing oversight of mining communities, including a
zero tolerance policy for forced child labor in the mining
sector.(
However, the Government did not report certifying any mines
or identifying any potential victims during the reporting
period. Very disturbing. Again, well-meaning, but what happened
with regards to implementation?
If our witnesses could speak to that because, you know,
these artisanal mines are catastrophic for children, obviously
the other mines, when you have forced labor. One of our
previous hearings on this very issue pointed out that the
children are not getting--they shouldn't be there in the first
place, it is child labor, it is a violation of human rights,
their rights, but they also don't have the right kind of
protection.
They are breathing in dust as they are in the case of
cobalt mining. They get very sick. Some die, but many get very,
very sick. The long-term consequences are absolutely
deleterious to their lives.
So, if you could speak to that.
Parenthetically, along the same lines, you know, the GAO,
General Accountability Office or Government Accountability
Office, issues a report on section 15.02 of the Dodd Frank Act.
It pointed out that in 2023, 62 percent of the companies did
perform due diligence to determine responsible sourcing of
conflict minerals, and they were unable to determine the
mineral source.
So, again, things were blocked. Well-meaning but it
doesn't.
Finally, I will just point out, you know, I have been very,
very concerned. Because I chaired 106 congressional hearings on
human rights in China. I did chair the China Commission. I am
shocked at how they exploit their own labor, how they, you
know, whether it be in Xinjiang or anywhere else. You know, the
use of forced labor is prevalent throughout all of China.
That same mind set and that same sense of exploitation was
carried right into Africa as they procure things like cobalt
and, again, child and adult forced labor.
What is it all about when it comes to cobalt? You know,
China's share of the global electric vehicles in this past
year, or 2024, skyrocketed to 76 percent. A fourth of all the
EVs in Europe are coming from China. So, this is all about
making more money on the backs of children, African children,
and on the backs of their parents.
So, if you could speak to those issues, you know, including
this lack of real due diligence, lack of enforcement of a zero
tolerance policy that sounded great when it was issued.
Mr. Nguramo. Thank you so much, Chairman Smith. I think you
just characterize it correctly. We need to be--I think we need
to be very demanding it terms of accountability, zero tolerance
policy.
From my modest experience living in the U.S., I know we
mean well. We try to help. We try to help. But we really have
to be very direct, particularly in places like the DRC, because
in this country, they are actually the officials who are
supposed to enforce the laws and the policy in their countries.
So if they can do that, we can do that. So I'd like to say
that, yes, we have put a lot of pressure on the officials in
these countries to make sure they're actually enforcing their
own policy and their laws and punish actually people who are
doing bad stuff. Thanks.
Mr. Dongala. I just wanted to encourage--I thank you for
the TVPs question because I'm going to share industry kind of
trick that I've been using that has helped us. So we've been
monitoring, like I said, the school attendance levels. That
data is very valuable because we know that if we start to see
the school attendance levels to drop, we need to start looking
for where these kids are going.
So I think the future TVPs report should find a way to
include these data points of attendance levels in mining areas,
something worth monitoring, because from an industry practice
of due diligence, I use it to say, Okay, look, we need to start
looking at this. Then from a due diligence side, the big issue
is that due diligence is seen as a western demand. There's no
local buy-in, in due diligence.
But if we can translate this due diligence demand locally,
like the example I use of Pastor Dede, you know, about the--
that notion exists locally. But if you can get buy-in from,
like I say, whether it's the local school principal, the local
fisher's union, the mothers of the children, they do have buy-
in on the environment. So that being said, I think if we get
more of the local mining communities involved in due diligence
processes and even getting their signatures on the
certification, it will render more effect. Even enforcement
because then the community will be, like, you don't have our
certification. Why are you here? So yes.
Mr. Lezhnev. I would just add that it's the systematic
kleptocracy that is the heart of exactly what you're talking
about, Chairman Smith. I met a mining inspector in the DRC who
told me, frankly, I live on the back of the local population.
I'm incentivized to get money from them and then pass the money
up the chain. Otherwise, they'll replace me here.
To change that system, you need transparency,
accountability, and incentives for a clean trade. I think the
legislation that you highlighted needs to be kept because it's
a baseline. Without that, you have the free for all that we had
before when you visited in 2008.
A whole group of Congolese Civil Society Organizations,
over 100 of them wrote during the first Trump administration
saying, if you repeal this Conflict Minerals Act that they
would be reactivated, the terrorist networks and the armed
groups, which would be very bad. But it needs to be
supplemented by other measures to incentivize responsible
investment like Thierry mentioned which is very important.
There is such a thing as a Burma responsible investment
reporting requirements.
We can follow on that. We can have awards for responsible
investment from the State Department and others. Then we need a
better system to trace these minerals that is much more
accountable and transparent.
Thierry highlighted this ITSCI system that has failed and
the responsible minerals initiative suspended them. Unless
there are seriously reformed to replace, that really needs to
be much more transparent on the ground. We need a better system
for gold which we talked about, only those kind of things, plus
incentivizing legal artisanal mining.
Then if it's legal and following the law, our children will
not be there, at least of a certain age. So I think those kind
of things can help. Thanks.
Mr. Smith. Mr. Bore.
Mr. Bore. Thank you so much the question. I think for me
there's a cocktail of tools that can be utilized to address the
problem. My colleagues told me--they mentioned importance of
due diligence. When you look at due diligence in most cases, I
think 2 month ago, I visited a lithium project. It's a project
owned by a Chinese company by the name Sichuan Zhiyuan.
Basically this company, they have a joint venture with the
Zimbabwean government. They're mining lithium. You get into
their community and they ask them, have they ever been
consulted about this project that has been exploited by this
company.
Most of them, they have never been consulted. But there is
an environmental impact assessment report that was approved by
EMMA which is the regulator. You start asking so how you do
have legislation that requires environmental management agency
to sort of approve only if there's consultation that are
inclusive and communities have not been consulted.
So you see that institutions, they might not actually be
implementing the law that exist. You have institutions that are
not necessarily doing their duty and the law exists. Then you
send a--you're asking these guys. So where are you sending your
lithium to? Who are you buying?
They start telling you, we are selling to companies like
BMW to LG, to Tesla. Some of them were even saying Tesla was in
Zimbabwe doing due diligence. I live there. The company I go
to, the community, if you ever heard of the company by the name
of Tesla here.
So one of the key things that I need to insist, when tech
companies are doing due diligence, they shouldn't just rely on
the data that they get from the mining companies themselves.
They have to go to the traditional leaders in the area. The
local leaders will give them more information about how their
community members are being impacted by the project. I'll end
it there. Thank you.
Mr. Smith. Thank you. Ms. Jacobs.
Ms. Jacobs. Thank you. As we've discussed already, there is
a long history of exploitation in the mining sector on the
African continent. Exploitation has emanated from not just
Chinese companies but from other foreign companies too.
So if we're serious about preventing and addressing
exploitation in this sector, we need to address the core
drivers rather than just focus on one specific actor. So Mr.
Bore, I was hoping you could explain why exploitation and
corruption is so rampant in the mining industry. Why are so
many companies able to take advantage and often get away with
corruption, exploitation, and diversion of minerals?
Mr. Bore. Thank you so much for that question. For me, I
think exploitation and corruption in the mining sector is a
systematic issue that is driven by a combination of factors,
both governance challenges, lack of regulatory enforcement,
power imbalances between the states, the west government and
also the multinational companies. In most instances,
multinational companies are able to negotiate bills because of
the power imbalances.
In many African countries, mining operations are taking
place in a politically unstable and economically very fragile
environment where institutions are very weak and oversight
mechanisms are sometimes compromised. So there are a number of
factors and why companies are exploiting. I mentioned earlier
on during my address the issue of resource backed loans.
I think it's one of the key things that we have noticed was
almost all the loan agreements that are extended to African
governments by Chinese financial institutions, they are not
known in the public. No one can scrutinize them and minerals
are collateralized for future mineral production. But no one
really knows.
Even the estimate of the value of the minerals that are
being collateralized for purpose of infrastructure development.
So that's one of the key factors. I think if African countries
could have access to credit and not use resource backed loans
as a strategy to get access to finance and development, we
could, I think, break the cycle. The other thing is regulatory
capture. I think this point has been overemphasized. Thank you.
Ms. Jacobs. Thank you. Mr. Lezhnev, anything to add?
Mr. Lezhnev. Thanks for the great question. I would say two
reasons: lack of transparency and lack of real accountability.
You highlighted the excellent case that the U.S. Government
sanctioned UAE-based gold refiner for sourcing from the Rapid
Support Forces in Sudan.
That's just the tip of the iceberg. That was one company.
There's a whole supply chain there of RSF companies and UAE-
based companies that are trading tens of tons of gold per year
and fueling that conflict.
We need to go much more--much deeper and much more robustly
into those networks to hold them accountable. I think No. 2 is
there needs to be transparency to level the playing field for
all companies. So the extractive industry's transparency
initiative is a great example of that.
Chinese, Russian, whatever company is extracting minerals
in that company has to play by those rules. Now there needs to
be better enforcement of the EITI standards. So for example,
they now require contract transparency. Only 26 percent of the
countries implementing this contract transparency are actually
fully disclosing all the contracts. DRC is a great example of
that.
There needs to be more followup on that transparency. But
once you level the playing field, then you can really start to
eliminate some of that exploitation. So I think we highlighted
some of the ways.
On that transparency front, the gold trade data right now
is 2 years old if you're trying to get access to this. The
sanctions bodies are just playing catch up with people with
these smugglers, very few of whom have been sanctioned. We need
a much better system.
The industry is developing this thing called a gold bar
integrity initiative which the U.S. Government needs to work
together on them. We should not be behind this curve. We should
be working with industry to help lead these initiatives.
Ms. Jacobs. Thank you. Since you brought up the role of the
UAE gold trade in Sudan, I just want to highlight that in 2022,
over 30 billion dollars in gold was smuggled from the African
continent to the UAE. This illicit trade has fueled conflicts
in the DRC, South Sudan, and Sudan where UAE-based companies
have purchased gold from the RSF as we mentioned who is
committing genocide.
You talked a little bit about how the U.S. can take more
actions against UAE-based companies. Could you elaborate on how
the U.S. should hold these companies accountable? Beyond in
Sudan where it's become very clear the role that the UAE is
playing, what other concerns are associated with Emirati mining
companies involvement in the mining sector?
Mr. Lezhnev. Sure, yes. Great question, and thank you for
highlighting that and for your leadership on this issue. We
really need a better system to independently monitor global
gold trading centers. The UAE, Hong Kong, Switzerland, Brazil,
there are certain choke points where illegal gold, whether it's
from Venezuela, Sudan with genocide happening, Congo, et
cetera, are going, right?
The Kimberley process for conflict diamonds actually
provides a useful window into how to do this. So they have
independent monitoring teams that can go and inspect and
certify these global gold trading centers, especially these
cash for gold markets. If you're trying to buy--if you're
trying to sell gold in the UAE or some of these other places,
including Hong Kong, you can just get cash for a slight
discount and nobody is really following up.
I think it was would be a great opportunity for Secretary
of State Marco Rubio to help lead this with industry who
actually put pressure on the UAE and other gold trading centers
in 2020. Then basically those centers did almost nothing. Now
that pressure has been backed off.
I think it's imperative on industry to hold these global
gold trading centers' feet to the fire and also for banks to
conduct enhanced due diligence. They have a key role to play.
These centers need finance and banking systems. Banks can play
a key role in that.
Ms. Jacobs. Thank you. I yield back.
Mr. Smith. Thank you. Dr. Jackson.
Mr. Jackson of Texas. Thank you, Mr. Chairman. On Sunday, I
just returned from a visit to the DRC. I went to the DRC,
Rwanda, the Republic of the Congo, Burundi, and Uganda.
I met with the President in the DRC, the President in the
Republic of Congo, the President in Burundi, and the President
of Rwanda. I left encouraged in some ways and discouraged in
other ways as you can imagine. I feel like that there is
unbelievable potential in the area for peace and security and
for the killing and the bloodshed to stop.
The resources there are just through the roof and tens of
trillions of dollars in resources. DRC could be one of the
wealthiest countries on the entire planet. But I do believe
that certain things have to happen, and I don't know exactly
what the answer is to get there.
I think that for this to exist, the eastern DRC has to be
an area where everyone has a vested interest in the safety and
security and the ability for foreign companies to come in and
invest in the area. When I say everybody, I mean the DRC, I
mean Burundi, I mean Uganda and Rwanda, everybody that's there.
We all know right now that the eastern DRC is a completely
ungoverned area.
It's like the wild, wild east, right? I truly believe that
there is no ability for the government in Kinshasa to actually
control that area right now. They do not have the resources or
the ability to really, like, impact what's happening there.
They are actually becoming in my mind just another entity
there that is trying to take advantage of the resources there
and get what they can. Everyone is doing it. We know this,
right? We know that Uganda is bringing minerals in from there.
Rwanda is doing it. Burundi is doing it. Everyone is doing it.
There's really nothing there to stop them.
I think that the Congolese government has to do a couple of
things. One, they have to address the domestic issue, right?
There are a large number of people in the Congo that are not
Congolese citizens. They are not treated as Congolese citizens,
including most of the members of M23, so on and so forth.
Now M23 is a rebel group, and we know that there's an
influence there and there's a component of the Rwandan Defense
Forces, the Rwandan military. But honestly, M23, with or
without Rwanda right now, is pretty much uncontested in the
area. They're just doing anything they want right now, and the
Congolese military is not even fighting back right now.
As a matter of fact, they're just running away ahead of the
M23. Or in some cases, they're laying down their weapons and
they're joining M23, right? So I think that the Congolese
government is in a bad position here.
But I do believe it's been a longstanding issue. It's my
understanding that there are certain people in the eastern DRC
that are unrecognized as Congolese citizens. That may be in
part because this used to be Rwanda before the lines were
redrawn many years ago, and that used to be part of Rwanda.
But I would submit to you that there's a large part of
Uganda that also used to be Rwanda as well. After it's been
redrawn, now it's Uganda. Those people were immediately
assimilated and treated as Ugandan citizens.
But that has not happened in the DRC. I think that's part
of the problem. I think that this domestic issue has to be
addressed, that everyone in the region, everyone in the country
has to be treated as a Congolese citizen with all the rights
and privileges of such.
I think that this is a difficult thing to do. But I think
at some point, the armed resistance of M23 are not going to
just put down their weapons and walk away. I think that they
are an armed resistance.
There has to be an effort somehow to incorporate them into
the Congolese military and make them feel like Congolese
citizens that are protecting their country, not that's going on
right now. I think that's one of the problems. I think the
other problem is that they have the domestic problem and they
have international problem obviously, which mainly focuses
right now around the relationship with Rwanda.
I think that there has to be an ability for Rwanda and the
President. I talked to Kagame. I talked to Tshisekedi. I talked
to both of them, and I think that one of the biggest problems
right now is personally they can't get along.
I think that at some point people have to put their
personal differences aside. This has to be a region that's
beneficial for everybody, that everybody sees profit and
everybody has a reason for that to be an area of stability,
right? I think that--I don't know the answer to this for sure.
But the neighboring countries have to benefit from the
minerals that are in the eastern DRC as well, whether that's
they have some refining capability and the minerals are mined
there and refined elsewhere. Or there's a refining capability
in the DRC, refining capability in Rwanda. Everybody has an
ability to make some money from what's going on there.
Then I think everyone will have an interest in making sure
that this is a safe and secure area. They're going to need
foreign investment to come in. They're going to need other
countries' businesses to want to come and operate there.
Right now, that can't happen because there's not the
required level of safety and security. There's not the lack of
corruption. There's going to be a certain level of corruption
everywhere you go.
But when I was there, I was shocked at the level of
corruption there. I talked to a Swiss company this morning, and
they told me that their company was worth something like 18
billion dollars. They got a tax bill last year for their
company for 18 billion dollars which is ridiculous, right?
They protested it and they got it reduced to a billion
dollars which is still hundreds of times more than the profits
that they make in a year. So they're being taxed at an
unreasonable rate. Bribes obviously are a big deal.
The Chinese can afford to pay the bribes or they're willing
to pay the bribes. We as the United States are not. Many
countries are not willing to do that, so they end up being able
to compete without competition.
There's a biased justice system as well. You can never be
assured that if you go there and you get into some kind of
legal disagreement that it's going to be a fair judgment and
it's even going to rule in your favor if you're in the right.
There's manipulated exchange rates.
There's unreasonable fines. There's evidence everywhere
that members of the government and their family are getting
filthy rich from what's going on there while the population
there is starving and living in a horrible environment. I think
that we have to come up with a way to fix this.
I think that until that happens, a lot of this other stuff
is not going to matter. I don't know the answer to this. But I
would like to get your opinion, each of you. Do you think that
in the current situation that we're in that--and obviously,
there's other issues too, I just want to mention too just for
the record.
But there are some--it's not all financial. Now I think a
large part of it's being driven by the financial benefit from
the minerals there. But I do think that there are other issues
at hand too.
I do think that Rwanda has a legitimate concern regarding
FDLR and the terrorist threat on their border as well. They
have a tourism industry that they have to protect. It's up in
the northwestern part of their country that's right on the
border with population centers there.
If mortars and rockets start landing there, there's no more
tourism there. I saw maps and you know this because you're from
there, from the area, you've been there, some of you. The city
of Goma, it's on the border and it's one continuous city that
goes into DRC and there's no differentiation.
So there has to be some level of security in that regard as
well. So we need to figure out how we get these governments
together and we come up with a reasonable way that everyone can
profit financially from partnerships there so that they all
want to see a level of safety and security there and that
everyone feels secure because everyone is fighting some type of
rebel group as well, whether it's ADF and the Islamic group
that Uganda is engaged with or whether it's FDLR fighting to
overcome--M23 fighting to overcome FDLR, so on and so forth.
But my question is, do you guys--and one at a time I'd like
for you to answer me. Do you think that the current existing
government in the DRC has the ability to do what I'm
describing? Mr. Nguramo, do you want to start?
Mr. Nguramo. Thank you, sir.
Mr. Jackson of Texas. If not, what do you think the answer
is----
Mr. Nguramo. Sure.
Mr. Jackson of Texas.--in brief terms?
Mr. Nguramo. First of all, thank you so much for you
attention to this ongoing crisis in the Congo, in the region. I
appreciate very much bringing the attention to this conflict.
But this crisis been going on for decades right now.
I feel very fortunate to be here in the United States. But
all this time, I think about my fellow citizens, in particular
in Goma. When I look at this problem, I think finding a
solution is possible.
Let me use a story. When I was at West Point 10 years ago,
I was actually with Rwandans cadets and hope they listen to me.
We went along very well, very, very well. Actually, we're
actually good friends. So in other words, peace is possible in
that region.
I just hope that the leaders, particularly DRC, they
understand that it's possible. I really agree what you just
raised. Yes, sir. There's a lot problems on the DRC side,
especially rampant corruption and bad governance.
But at the same time, the DRC side as well has to
understand the problems of the Rwandan concerns which is true,
absolutely true. If you look at the U.N. reports that have been
coming out the past 4 years, with absolute evidences, there
were collaboration between the senior FARDC officers with FDLR.
I'm not making this up. It's in the U.N. report.
Why did the USA government and especially the DRCG tolerate
that? Now you see the consequences. On the other hand, for
example, the resources along those lines, I think there's a lot
of existing mechanisms, economic/political. We just need to
enforce them so that they can bring regional stability.
For example, which I think is quite frankly one of the best
things ever. If the regional country actually focus on it,
these agreements. Keep in mind these agreements came right off
the M23 again.
Simply the regional country and particularly the DRC
government had to focus on implementing those policy
recommendations that were in that agreement, including firing
the corruptions, implementing good governance, and the security
sector reform. But what we have seen over the past, let's say
10 years, I think is this year, this agreement was signed.
Really, we saw little progress.
Now people can argue, the President Tshisekedi has arrived.
He has not much time. But come on. Seventy years I think are
enough to show what to do or the limits of what they (Felix
Regime) can do.
But I'd like to think that--in particular to come back to
your question. I like to be optimistic. But I'm not seeing any
positive sign from the DRCG/Kinshasa particularly to try to
address some of the root causes of how this conflict has come
so bad to the point of bringing the region again back to the
mess we saw back in 1990's.
Particularly because--and again, I point out the U.N.
reports which are very, very--actually, I always like it when
all side contests the report. It means it's credible. It's
correct because it's not point to one side, yes.
For example, when the Goma collapsed, if anybody was
reading quite carefully and objectively what's happening behind
the scene, it was predictable. It was really predictable. For
many reason, I know there was no military strategy. It was
looting strategy in place.
It was just some kind of maybe a looting system from the
DRC elites in Kinshasa. So tried to do what is correct. But
anyways, sir, I'm optimistic. I'm very optimistic. I hope that
President Kagame, Tshisekedi all the efforts.
I saw their meeting in Doha, I think. I hope it goes
somewhere to find solutions. But most importantly, I'd like to
really emphasize on Washington, sir. Washington, most of these
guys are looking at the Washington leadership.
They're looking at particular Trump administration, what
they're going to do. We have the G20 summit coming up in
November. I really hope the Trump administration would be
engaged.
I think it did not look good for all the leaders in the
world to be in Johannesburg or Cape Town with the mess just in
the backyard. So we still have some time, I think, to do what
we can and somehow bring to a successful conclusion, along
those lines. Thank you.
Mr. Jackson of Texas. Thank you.
Mr. Dongala. Thank you, Doctor, for your engagement on this
issue. I see you've really been boots on the ground there. I
have conducted due diligence in DRC for about 4 years. Up until
now, I still have not been able to approve some of the traders
and investors that wanted to go there.
They're mad at me. But I'm doing my job. I think that goes
to answer your first question about the ability. Christ said
you judge a tree by its fruits. The past 7 years, the fruits
have not been tasteful.
So what I would say is the--as far as the answer to that
ability, I think the President himself, President Tshisekedi,
is juggling with that question. I think he's come to terms that
he hasn't had the ability. He's talked about a government
reshuffling.
If there's a government reshuffling, that shows a drastic
change in difference. Perhaps that would embolden my answer to
say, yes, give him a chance, another chance to show their
ability. Then apart from that, I would say where the U.S. can
play a role in helping with the ability, one thing the U.S.
really does well is business and even business between states.
The U.S. could help broker this business deal between all
the parties. Me being in the industry space, I'm seeing this
trend that I'm briefing Treasury on it every once in a while.
Central banks are getting involved in the--and all over Africa,
you're starting to see central bank gold purchasing programs
happening.
So now in Tanzania, their central bank is purchasing gold.
Ghana, their central bank is purchasing gold. It's very
interesting because central banks have sovereign immunity.
So in a way, we can't sanction a central bank. So you have
to be very careful with these programs, that they're not
masking bad behavior. But if they get involved in the market,
it has a huge consolidating impact.
So if the DRC central bank became a gold purchaser, a local
gold purchaser, and the other--they have central--the CEEC.
It's a community of central African states which includes
Rwanda, Burundi, DRC, and Congo-Brazzaville and Central African
Republic. So they already have a framework to collaborate
economically.
So the U.S. could be helpful in getting those interests
aligned. It could have an impact on the ground. I just want to
make one important point. There's a huge difference between the
government that you deal with and the people on the ground.
The people are--I mean, in Congo, there's so many tribes.
We're used to intermarriage. Even my wife, she's from another
tribe. I come from the Congo tribe. She's from--and so it's--
the people, what you're seeing happening among the corrupt
elite sometimes is not a reflection of the people. So I think
pieces----
Mr. Jackson of Texas. I think that's part of the problem.
Mr. Dongala. Exactly.
Mr. Jackson of Texas. People see this too.
Mr. Lezhnev. First of all, thank you so much for traveling
to the region, Dr. Jackson. I viewed your trip from afar and
really salute you for heading out there during this very
challenging time. I liked your phrase that the wild, wild east.
I think we need to use that more.
First of all, I would say to your question the--any
solution needs to start with the fact that the DRC is the DRC.
There's talk of annexing parts of it and so forth. The DRC is a
sovereign country and needs to remain as such.
Having said that, I think there absolutely is the
possibility of a symbiotic relationship between the DRC,
Rwanda, Uganda, Burundi, and other countries. We've outlined
that in several papers that we wrote during the last M23
crisis. I think that started to be followed for some time.
Then people were tempted by illicit exploitation and
smuggling and criminal activity on all sides really. You
highlighted that the DRC military units have aided and abetted
a terrorist group, the FDLR, and that continues. So any
relationship that can be symbiotic has to be based on
transparency and accountability.
Those who have been aiding and abetting the M23, those who
have been aiding and abetting the FDLR, they need to be held
accountable. Looking to the United States, are they going to do
that or not. The European Union has actually taken some
advanced action compared to what we have done.
But the Trump administration did sanction some Rwandan
officials and M23 which was very good. It was a useful start.
There needs to be a much better system for tracing and auditing
the gold and the other critical minerals that are in the east
so that it's much more transparent so that there can be
processing facilities on the Congolese side and processing
facilities on the Rwandan side.
Everyone is very clear in a multi-stakeholder framework
where they're real. As Thierry said, you can't just trust
people to say, oh, yes, sure, it's conflict free. Well, guess
what. It's not.
So we need to have real monitoring teams out there. The
ICGLR I think is a good mechanism to try to do that. But we
need more support to that system such that it can be actually
workable.
I think that the last point I would say is that we need
more democratic governance in the DRC. It's not really
democratic at the moment. That really needs to be reformed and
amended and shifted. Thank you.
Mr. Bore. Thank you so much, Dr. Jackson, for the question.
I'm probably not the most qualified to speak about this
conflict in DRC. I think my colleagues who been in the area I
think have a better place to.
But speaking from my understanding of some of the drivers
of the conflict, I think there are two processes that have
happened at the regional level. One, the process that--the
Luanda process led by the Rwanda President who tried to bring
the two, DRC and Rwanda to the table as well as the Nairobi
process. I think these two processes in a way should have at
least de-escalated the conflict.
Unfortunately, I think the government in Kinshasa is not
buying into the negotiation and demands. Probably I think
Angola is trying to bring them to the table. One of the
conditions now is the M23 is saying we also want to be on the
negotiating table.
So governments can negotiate. But the leaders of the group
also want to be part of that negotiation which I think is quite
important. Of course, you cannot support these groups to be
part of formal processes.
But we ought to accept that the situation is reached
another level that it calls for these measures that are not
usually what one would want. So the DRC government should
accept that. At least we need to have leaders of these groups
to also come and understand really their interests are.
Then the other thing is around strengthening the
institutions, State institutions really. I think U.S. is a vast
country. It's quite big. Arguments that we have also heard that
it's quite difficult to manage such a big country with enormous
resources and so many people with interest.
But I mean, the U.S. also I think can play a role through
this continual, or security partnership deal and come up with
some sort of like preconditions since DRC is already seeking to
partner with the U.S. That can also be one of the preconditions
to stabilize the region. Thank you.
Mr. Jackson of Texas. Thank you. I'll just close by saying
I think there's incredible opportunity here. I think that the
new administration, President Trump's administration, sees
the--they want the bloodshed and the violence in eastern DRC to
stop.
But they also see the U.S. national security interest in
the area. That's DRC in particular but all of the continent of
Africa. I think that if we can't get this fixed, if we can't
develop this safety and security and the stability in the area,
the people that win every time are the corrupt governments that
are making money from it and the Chinese who thrive in this
type of environment and on occasion the Russians. Thank you.
Mr. Smith. Thank you very much. Mr. Olszewski.
Mr. Olszewski. Thank you very much, Chairman Smith, Ranking
Member Jacobs, and to all of our witnesses. I want to just say
clearly we have an abundance of resources here but also no
shortage of concerns. So worthy of our time and attention. So I
thank you again for calling us together.
I also just want to reinforce the point that Ranking Member
Jacobs made earlier about if we're serious about exploitation,
just making sure that we're taking the holistic view of things
here. Certainly concerned about the impact of what the CCP is
doing. But also thinking about those issues of transparency,
economic opportunity that so many of you raise today.
I want to just thank you for that. It's probably no
surprise to members of this subcommittee that I'm especially
appalled and interested in the stories of children who are
victims of the sector that is fueled by violence, corruption,
and cruelty. We know that there are as many as 40,000 child
laborers in the cobalt mines now.
Just this year between January and February, more than 400
children in the eastern DRC were recruited by armed actors with
some as young as 14--being as young as 14 years old. We know
that these children earn as little as two dollars a day and
face deadly landslides, hazardous conditions, and diseases but
continue to abandon school and work due to poverty and hunger.
We know that, Mr. Dongala, I appreciated you mentioning the
ways in which gold mining investments often reduce and less
students in school.
I appreciate also your comments about monitoring attendance
levels in mining areas as we address these concerns. It's a
real concern. The human capital index for the DRC is at 0.37.
That means that a Congolese child born today will achieve
only about 37 percent of their full potential compared to what
would be if they had that full qualify education, health care.
It's one of the lowest scores in the world. A staggering 97
percent of 10 year olds in the DRC cannot read and understand a
simple text.
In this committee and elsewhere, I will just continue to
bang the drum about the importance of education among those
other supports. Certainly, any successful strategy to address
China's exploitation and support for Africa's use of its
critical mineral sector must include the supports for families,
children, and local communities. I will note in 2019, there
were a number of large companies that do benefit from this
cobalt mining such as BMW and Samsung and that launched the
cobalt for development program with the stated goal of
supporting safer and more ethical practices. These initiatives
included better access for education for Congolese children
which can help provide opportunity and reduce the prevalence of
child labor in mines.
I guess my question then maybe for Mr. Dongala and Mr. Bore
just in the interest of time, can you talk a little bit more
about what initiatives have been most effective in supporting
educational outcomes and providing those alternative options
for income for child miners across Africa? Then if you could
answer the question, especially in the context of without the
presence of USAID and the ways in which those programs have
been just gutted in recent months so that we can scale the
programs that can work to counter CCP dominance in the region
and ensuring those critical extractions, support local
communities rather than exploiting them.
Mr. Dongala. Thank you, Congressman. It's very refreshing
to see someone so engaged on--it's a business question, but
it's also community question. And so from the private sector
side, some of the initiatives that we've done, usually there
has to be a--when a mining company or a processing plant is
established either in Zambia, DRC, Ghana, I think Kotavar, they
all have the same framework where the village leader, there
needs to be an agreement with the village.
This agreement has most of the families that are impacted
by the education, their children not going to school are going
to be signatories to this agreement. The village that signs off
on this community agreement for mining should have provisions
on education and say, hey, are your children still attending
school? How many children do you have?
Lean on that community agreement that the mining company
has and all the big companies have them, from Barrick down to
the smallest. Even the tiniest one they have, they have to get
some sort of community agreement where they're mining. It's
just that community agreement is just some random document that
everyone kind of makes up, and it doesn't have real teeth.
But if you start to require that agreement monitors
education, hey, are your children--we as a community signed off
that we're committing our children to staying in school in the
midst of these mining operations. Something that at least gets
their attention on the issue. And then from there, I think
initiative can build on. That's what we've been doing, and I
hope others can do more.
Mr. Bore. So for me, better access for education is one of
the most effective ways to reduce child labor by exploitation
in the mining sector and particularly in the DRC where we have
this staggering statistics of children as young as 10 and 14
not being able to read and write. And child labor I think in
the mining sector is often driven by poverty and lack of
economic opportunities and even social protection systems. When
families cannot afford school fees, automatically, children are
forced to contribute to the household income by working in
those dangerous mining conditions.
What I think in terms of what those mechanisms in terms of
providing access to education could do, you talked about the
cohort for development which is quite a noble initiative that
is focused on improving access to education and supporting
safer mining practices, particularly for artisanal cobalt
communities. But beyond I think the other initiative that we
have seen in DRC, I think in 2019, the government also
introduced nationwide free education policy. While this is
quite an interesting program and increased school enrollment
and challenges around overcrowding classrooms and teacher
shortages, I think more needs to be done.
You may also be aware of the World Bank education program
which has supported several education opportunities in DRC,
including funding for school construction, teacher training,
and curriculum development. But of course, these are not the
only ones. UNICEF and even the international labor
organizations have come up with some important mechanisms to
support children to access education in the DRC.
But one last one I think the U.S. could also contribute is
around conditional cash transfer programs that provide major
incentives to families who are keeping their children in
school. And this has been really successful in countries like
Ghana where this has actually been implemented. And I think
it's something that can also be borrowed for the DRC context.
Thank you.
Mr. Olszewski. Thank you, all. Thank you, Mr. Chairman.
Mr. Smith. Thank you. Ms. Radewagen.
Mrs. Radewagen.
[Speaking foreign language.] Thank you, Mr. Chairman. I
want to thank you all for being here today as we examine the
impact of how China's involvement in mining in Africa is, and
being from the Pacific Islands, I care deeply about what's
going on.
So I'd appreciate the perspective of each of you. What way
can we make existing legislation or regulations like the Frank-
Dodd Section 1502 account for community buy-in to the
certification process or encourage Africa moral sovereignty
over the certification? Mr. Lezhnev.
Mr. Lezhnev. Sure. Thank you so much for the question, a
very good one. When this legislation was originally drafted and
I happened to be around at that time as well. There were
provisions that were added on to it that were part of it that
were there to support certification and support for artisanal
mining communities in the DRC and in the region.
Then when that piece of legislation--and I think in the
House, it was called the Conflict Minerals Trade Act. In the
Senate, it had another name. When it got folded into the wider
Wall Street Reform bill, some of those sections got stripped
out and there was money attached to those.
It's--I think it would be very helpful if Congress could
allocate some support to the artisanal mining communities and
for certification because as we've seen, as the other witnesses
highlighted, the governments of the region are very corrupt.
And they have corrupted some of these systems. And we need some
better international independent monitoring and some support
for alternative livelihoods, both to eliminate child labor as
well as get some of these armed groups to make sure there's
real inspections of these mines happening.
It's all there on paper. But is it going to be actually
implemented? I sat on the governance board of an organization
that's a U.S. Government private initiative called the Public-
Private Alliance for Responsible Minerals Trade which is a
great organization that has supported efforts like that on the
ground.
But it's really been a drop in the bucket. So I would call
on Congress to support those kind of initiatives more robustly
so that we can really begin to eliminate the smuggling and the
illicit actors that have stepped into some of those voids.
Thank you.
Mrs. Radewagen. Mr. Dongala.
Mr. Dongala. Thank you, Congresswoman. I would say on the
certification, African moral sovereignty, my colleague, Obert,
mentioned something about including village chiefs. The role of
the village chief in the Congo and many of the countries is
kind of a ceremonial role that in DRC law it is recognized.
There's a whole traditional court system that's recognized.
Getting simply them to sign off on the community agreement is
already required according to law. But certification, if they
can be involved in certifying because now they're putting their
moral obligation, their moral authority on the line.
Usually in these communities, their moral authority is
really all that they have. They kind of--sometimes they trade
in that which is very bad. But it's starting to have them sign
off that this is not hurting your community is a step of
accountability that can be taken.
Mrs. Radewagen. Mr. Nguramo.
Mr. Nguramo. Thank you, ma'am. And thank you so much for
your interest in this question. Let me just put things in
perspective a little bit.
When Dodd-Frank Act came out, I was still pretty much in
high school in Goma just to see how this has been going on and
maybe a lot of progress on it. But here's the thing. I think my
colleague have already a lot about this and particularly Sasha
and Dongala who have been working on this for a long, long
time.
But I'll just insist on making sure that we actually
enforce our policy and the laws. I think it's really, really
come back to that. If people don't see consequences of bad act
or bad behavior, they can really change.
So which come back to transparency, accountability. I like
us as well to I think to relate to what the Congressman just
mentioned, education. Most of these kids working in these
mines, I think there was just a good opportunity. They want to
go to a library. They want to go to school, know how to read
and write, and be able to access to information to make
critical judgment of their own future.
So we have to--that's really good, Congressman. We have to
make a particular--we have to emphasize on educational
communities. We have to build the grassroots providing first
come with stability of these areas of these communities,
providing them the necessary needs like education, all those
kind of things, basic infrastructure so that they can have a
better future.
Mrs. Radewagen. Mr. Bore.
Mr. Bore. Thank you, Congressman--Congresswomen, for this
question. So for me, I think my colleagues have already
mentioned some of the responses. But one of the critical
things, I think, would important around supporting African
government in creating legal pathways for artisanal small
scales to operate under license and even access to financial
services.
Currently, a lot of African countries criminalizes
artisanal small-scale mining. And we know a lot of the problems
emanate from the fact that in unregulated sector it's easy for
it to be influenced. So I think if the artisanal small-scale
mining sector is operationalized--formalized rather and also
supported in terms of access to finance for them to actually do
the engines or certification process which is quite expensive
for small-scale miners, I think that will I think also address
some of the challenges around transparency and accountability.
I think we want to ensure that companies are able to
publicly or compelled to publicly disclose their due diligence
practices and processes. But even the names of their suppliers
to create more pressure on accountability. And last, while the
Dodd Act I think quite a very important piece of legislation, I
think the focus obviously has been on the 3TGs.
It could also be expanded to other lithium so that we are
able to catch them all. So the limitation on the minerals, the
3TGs, needs to be expanded the scope of the Dodd Act. I think
that would also assist particularly looking at emerging mineral
quality chains like lithium, for instance. Thank you.
Mrs. Radewagen. Thank you, Mr. Chairman. I yield back the
balance of my time.
Mr. Smith. Thank you very much. Mr. Baird.
Mr. Baird. Thank you, Mr. Chairman, and thank all of you
witnesses for being here. We really appreciate you sharing your
perspective about what's going on in Africa. But Mr. Nguramo,
did I pronounce that correctly?
Mr. Nguramo. Yes, sir.
Mr. Baird. I want to congratulate you for graduating from
the U.S. Military Academy at West Point.
Mr. Nguramo. Thank you.
Mr. Baird. But then I want to get into--in your testimony,
you mentioned that the trade between Africa and China is
estimated at about 282 billion or so. And it's growing at about
one and a half percent annually. And yet almost all the
investment in the mining and infrastructure sectors--this is
according to your testimony--without long-term benefits to the
countries and the gross domestic products, the GDPs of the
populations there.
So indeed China routinely operates in the shadows of the
governments that lack transparency. They care very little about
accountability, transparency, human rights and democracy. So I
picked up that you wished to comment about the fact that
political and social stability and prosperity in the DRC is
essential to our national security.
So in that vein, my background, I'm interested in
agriculture. I'm taking a long time but I'm finally getting
down to my question. Okay. I'm interested.
Mr. Nguramo. Take your time, sir.
Mr. Baird. But increasingly, we've received reports that
the local populations are very angry with the Chinese companies
because of the environmental disasters that are directly linked
to their negligent business practices. So do you believe that
African governments are increasingly dissatisfied with Chinese
companies operating in their countries? And have the
environmental disasters caused by Chinese companies affected
the agricultural sector across the continent?
Mr. Nguramo. Can you repeat the question, sir?
Mr. Baird. I want to know if the Chinese practices and the
destruction they've done to environmental issues in their
country, has that been a factor across the whole continent?
Mr. Nguramo. Let me just mention the thing about the DRC
because I've been tracking that closely, my home country.
Definitely the CCP practices in mining sector has been
destructive to local populations. There are some credible
report by, for example, the Amnesty International which has
shown that the lack of respective environments, the lack of
providing, let's say, adequate protective equipments to
particularly young children who work in these mines have come
to create some significant health problems to the children,
including destruction of the environment.
Drugs is translating into social conflict. As we can see,
for example, in Ituri I think is one of the case, I think,
study we can look at. Now how that, I think, will translate to
maybe some kind of dissatisfaction of the population across the
country, across the continent, I think it remain to be seen.
But we can that there's some trends. I think part of the reason
why we are seeing all this conflict going around, particularly
DRC and the Sudan.
Mr. Baird. Yes.
Mr. Dongala. May I add, Congressman?
Mr. Baird. Yes.
Mr. Dongala. On the agricultural connection to--we were
doing some investigations in Ghana. And there's a whole new
term they call galamsey which is this wildcat kind of mining of
gold. And they pollute waterways all over the area.
The thing is that a lot of the conflicts in Africa is
between the cattle herders and the farm landowners. For the
longest time, the farm landowners have been complaining about
the cattle herders who come on their land and it causes tribal
conflict. But now they're complaining about the illegal miners,
and this is in China.
So it's actually becoming a farming issue as far as the
pollution. A second point on that is that there's--it's not a
one-off issue. But we've seen it probably three or four
different countries.
Chinese firms are going into conservation areas which
they're supposed to be protected. But it gives them also the
anonymity. Because no one is there, they can do it kind of
without anyone looking.
These conservation areas which are, like, usually you're
allowed to farm around conservation areas. So a lot of
farmers--and these are small holder farmers. They have a couple
of acres. They use it for subsistence farming, feeding their
families. They are the first ones to witness and also to feel
the impact of illegal mining sponsored by the Chinese. So I
just want to put that on the record too.
Mr. Baird. I really appreciate that comment because when
you think about agriculture and Africa has a lot of fertile
land that could be used for agriculture production. But when
you contaminate that soil, you're going to contaminate the
food. And so excellent point. Any of the other two have any
comments in that regard?
Mr. Lezhnev. That's a great question, Congressman. The
prices of some of these minerals are skyrocketing. We all know
gold hit 3,000 dollars an ounce for the first time a couple
days ago. And what does that do on the ground in countries like
this?
It was a flurry of activity. When there's no rule of law,
it's the wild, wild east as Mr. Jackson said. So I think the
key is really the governance and the rule of law and reducing
this corruption and kleptocracy.
I've been to many mining communities in Congo where the
alternative livelihood is farming. But nobody wants to do it
because everyone can make a quick buck. There's so many
exploitative actors from armed groups to corrupt officials who
are just going after these mines.
So you need a much better framework. As Mr. Bore said, I
fully support the formalization of the artisanal mining sector.
Give them property rights. Give them legal areas to work.
Then the same thing for the farms. Make sure that is
formalized and if there's not bribes being paid everywhere. And
back earlier to Mrs. Radewagen's question, we need some support
for those alternative livelihoods, and that's really in the
farming communities. So if we can help reduce the corruption
and support the formalization, then I think that can go a long
way to establishing better governance in this sector.
Mr. Baird. Mr. Bore, you have any comments?
Mr. Bore. Yes, Congressman. Yes, thank you so much for the
question. I think Chinese mining operations on the continent
have had a significant negative impact on agriculture,
particularly through displacement, environmental degradation,
water pollution, soil contamination.
I think there's ample evidence of communities that have
been relocated that rely on subsistence farming. But also even
some of them that have been relocated large scale farming, I'll
give you an example of a project that is owned by Cobalt,
Zhejiang Cobalt in Goromonzi, the eastern part of the capital
city of Zimbabwe where big commercial farmers were relocated
just to pave way for lithium mining.
Of course, the communities also are complaining around the
conflict on water resources for mining because of the intensive
amount of water required to process lithium and also for
farming. So already, I think, we are seeing the connection and
the linkages between how mining by these Chinese companies
through illegal practices or irresponsible practice are fueling
even food insecurity. I can also give you another example of a
BYD supported project where I think about 30 community
households were relocated from their village and they were
moved to a very urban area.
They were given just around 400--I think 450 square meters
of land. And these communities used to live on agriculture. So
I think there's broad evidence to show that agriculture is
being impacted.
Also, I mean, there are cases also from Sierra Leone where
mining by Shandong has also affected agricultural production.
So food security, you talk of subsistence living, even
livestock. There's an organization, Zella.
I think my colleague also mentioned about moving into
protected areas where Chinese companies are also now starting
to explore mining particularly in national parks. You might
have read in the news where we filed an application essentially
an interdict before the court in Harare to challenge the
minister of mines who had granted a special grant. A special
grant is essentially a special mining list which allowed this
Chinese company to mine in Huang which is the biggest national
park in the country.
So we are seeing that companies are also starting to move
away from where naturally people live to go into protected
areas where there's less population. But of course, it's also
impacting tourism which also brings another dimension in how
mining in these areas is affecting conservation efforts. Thank
you.
Mr. Baird. Thank you, all of you. I yield back, Mr.
Chairman.
Mr. Smith. You have one quick question, because I have a
series of questions.
Ms. Jacobs. No, go ahead.
Mr. Smith. Oh, Okay. Thank you. Let me ask a few questions.
I'll put them all out and then whichever ones you would like to
answer, please do. Building on Mr. Baird's comment about the
local populations anger based on environmental degradation, how
do you rate the environmental record of PRC mining companies in
Africa compared to that of U.S. and Western companies?
Have African governments sought to hold Chinese companies
responsible financially or criminally for environmental damage
that their business practices have created? We know for a fact
that in China itself, not only do they not follow ILO standards
on labor rights, they have egregious problems in China itself
with environmental degradation. Why wouldn't they just export
that to their operations in another continent which is, of
course, Africa?
Then what evidence, if there is any, do you see linking PRC
mining activities to the funding armed groups or militias in
specific African conflict areas? Thierry, if you could speak to
basically what you've seen, the Chinese dollar system that
circumvents the U.S. dollar system in Africa. Can you expound
upon that?
Also, in Ghana, Tanzania, Uganda, Ethiopia, Sudan, and
Zimbabwe, central banks have launched their own gold purchasing
programs which can often mask illicit behavior because they
benefit from sovereign immunity. What measures should
regulators and sanction enforcers take to ensure that our
sanctions and other sanctions by the EU remain effective? Let
me also ask, if I could, what are the major goals and changes
under the recently negotiated DRC, PRC cycle mines
infrastructure for mining rights agreement?
What has the DRC government done with the reported 7
billion dollars it received from this agreement? To what extent
have corruption and diversion of resources characterizes the
deal as it was signed? Where would you place the
responsibility?
Let me also thank you again, Sasha, for the recommendation
for the illicit gold task force. I'm wondering if you're
getting any traction. We'll raise it obviously with Secretary
of Treasury as well as State. I think it's an excellent idea.
You might want to speak a little further on that.
Then finally, I've introduced legislation, H.R. 2310, the
Cobalt Supply Chain Act. I just reintroduced it. And at its
core, it is Section 4, a rebuttable presumption that covered
goods and goods that are made wholly or in part with forced
labor or child labor cannot come here.
Although if the company can prove it, that it's free of
that taint in their supply chain, then it would be allowed to
come in. I patterned that after legislation I worked on along
with other Members of Congress. There were four of us who did
it on the Uyghur Forced Labor Act.
The better rebuttable presumption is, I think, a novel way
of saying, Okay, you can export your goods. But they better be
free of child labor and they better be free of forced labor of
adults. There's also an enforcement strategy, Section 5, and
then also a Section 6 that says clearly that no Federal
procurement of vehicles--federal vehicles cannot be made from
child labor or forced labor of adults coming out of Xinjiang
especially because we know that's where the cobalt is being
processed.
So your thoughts on that legislation because I think
platitudes are great. Again, I mentioned before about the zero
tolerance initiative done by the human rights folks in DR
Congo. We welcome it. But if you don't get enforcement and I've
done oversight hearings on the Uyghur Forced Labor Act.
While it's not perfect because we had a de minimis
provision in there, anything that's 800 dollars or less is not
subject to an inspection. And it has been exploited with
impunity. And we're looking to rectify that.
So we're learning from our mistakes with that legislation.
But hopefully, this will be a clarion call that we really don't
want these kids being exploited anymore. When you look at how
sick they get, many of them die.
Then the fact that so much of this as you all have
testified fuels M23 and so many other groups that are killing,
maiming, and raping in Africa. We need zero tolerance that has
an enforcement capability. So if you want to speak to any of
those issues that I've raised, I'd deeply appreciate it.
Mr. Lezhnev. I'll start with the one that was directed to
me, and then we can sort of maybe divide them up. Regarding the
gold task force, there's illicit gold coming out of the DRC,
out of Venezuela, out of Central Africa Republic, out of Sudan.
And like I said earlier, China is buying it up hand over fist
and potentially going to establish a new currency which
threatens our own.
So we need to take bolder action to address this. And the
U.S. Government I think is well primed to be in a good position
on that. I think a couple things that would be important for
this task force.
First of all, it's set up an interagency coordination body
such that we can coordinate with industry, especially through
FINCEN, to talk to banks more, to have a banking roundtable, et
cetera, and then investigate and sanction the whole network. We
did a whole 6-month study on sanctions. And they're most
effective when they really go after the networks.
It's not just a one-off initiative. You start out with the
smuggler himself. But he runs a series of shell companies, then
there's a refiner, then there are officials that work with
them. Once you go after that and involve multilateral
sanctions, European Union, even the U.N. if possible, that can
have a very important impact.
Then the private sector needs to play an important role in
coordinating here. So banks need to enhance their due diligence
on monitoring of gold suppliers. And the industry also should
coordinate this new gold bar integrity initiative with
government so that there can be some cross sharing of
information.
I really think that having a central task force in the U.S.
Government, they can address these various aspects. It could be
very important. Over to you guys for those.
Mr. Dongala. Thank you, Mr. Chairman. I will go ahead and
answer the Chinese barter system. What's interesting, so there
were a lot deals that we saw. Like, you can see with the Kabila
bill for infrastructure for minerals where they got copper and
they were supposed to do minerals.
When the government audited by--when the government of
Tshisekedi came into office and they audited that deal, it was
a barter deal. Okay. We'll build your infrastructure. You give
us the copper.
But there were no enforcements, no accountability measures.
What happens is they can mine unaccountably. The government of
DRC can do whatever with the infrastructure funds that we're
supposed put at disposal and work.
So this barter system happens through either state-to-State
deals. Banks, local banks that are being established in the
region are facilitating a lot of non-dollar transactions which
evades the U.S. dollar system and sanctions. Then since we're
on the topic of sanctions, how can we ensure that sanctions
remain effective?
I think it goes along with this--with Sasha's
recommendation of illicit gold task force. I would add the OFAC
licenses which is an already existing process. What that would
do is it would gather data that can be actionable, live data.
Because what's happening is to apply for a license for
OFAC, they would have to share, regularly share data of their
gold trading activity. And this data will inform the OFAC--the
illicit gold trade task force of trends. Right now, the
enforcement of sanctions are flying blind really.
They're trying to keep up with what everyone is doing, who
the trader is doing, what's the new refinery, what's the new
name and all that. But I think that'll be helpful with making
sure that sanctions remain effective. And then on H.R. 2310, I
mean, I think this is a breath of fresh air.
What I will do for my side, from the industry side, I'll
encourage--I think we need to educate industry participants to
know that it's not, like, a new regulation, something that
they're not already doing. But what it is, is getting more
details. I would actually recommend for Section 6 if we can
include weapons, procurement weapons.
Now you might have--that might be a whole lot of--a whole
other storm. But if you want to make it effective because the
reason why cobalt and lithium and all that is available is not
only just commercial technology but also weapons technology. So
if you could include in Section 6 of H.R. 2310 weapons, I think
that will be a headliner also.
Mr. Nguramo. Thank you, Chairman Smith. I would agree with
the panel of Sasha and Thierry. I'll just maybe add, I think
one thing in terms of, like, ranking, I like to think that
Western companies are way better in many ways because, of
course, it's not perfect.
But at least we have--we tend to care about issues like
human rights, dignity, foreign corruption. It's not always
easy, but at least we try. I'd like to think that western
companies see some kind of collaboration from these African
countries, particularly the Congo, so they can meet at least
somewhere to have some kind of compromise along those lines.
I won't name any companies. But I work maybe two, three
companies. They run into some serious problem in the DRC. But
because maybe the moral standard was a bit high. Anyway,
commenting on the CCP, how it's fueling conflicts, groups, I
refer to the recent U.N. reports.
Not actually the recent one, but most of them over the past
3 years, I think, if you go to the appendix and really
overwhelming evidences. I mention this company, Norinco which
has been supplying weapons basically to all the sites. Here's
the thing.
I like to think that the CCP will at least try to put some
kind of guardrails. Make a name to say, hey, where these
weapons are going and it may be a thing. And especially because
in a situation where the militia is getting out of the DRC with
serious concern of leaving a security vacuum behind.
We know the FARDC's not yet there to assume this kind of
responsibility. Second, the U.N. I think I remember well. I
think 267 resolutions, remove the armed shipment embargo to the
DRC. So all these can create a high risk of proliferation of
weapons in the area. So China, I like to think, should really
care about these issues and really try to make sure there's
some trustability to make sure that there's no increased
conflict and violence.
Thierry already mentioned that. I think it was a great
initiative. But the implementation was just a disaster. Over
the past maybe 15 years, I think, it's been in the area along
those lines.
It's very hard to see how those kind of agreement benefit
the average person. The poverty has increased. Unemployment
remain high. And so as well Felix Tshisekedi came in, tried to
do some manual revision.
But we heard some payment were made, I think credit report,
the recent by the IGF, the Inspector General Finance. But where
the money went? It's hard really to trace it.
I'd like to think that it's probably one of the reasons why
we see this dissatisfaction or disconnection between the Felix
government and its populations. The people are hearing all
these revenues, but they're hardly seeing them in their daily
lives. And I fully support the global supply chain act, sir.
I would just insist on enforcing these laws. I know it's
tough, hard. But I think that's the heavy work we have to do.
We have to deploy all the necessary resources possible, learn
from past mistakes.
You just mentioned we have to learn from what did not go
well. Operate those kind of policy and what are the
shortcomings, how we can do better next time moving forward.
Thank you.
Mr. Bore. Thank you so much. So I'll address the question
on central banks and responsible gold standards. So I think
broadly across the African continent, central banks are
implementing a variety of measures to promote responsible gold
processing and kept illegal mining activities.
I could site examples of Ethiopia, the national bank of
Ethiopia and even Zimbabwe where the fidelity code printers and
even in Tanzania have all been coming up with incentives for
ensuring that actors that are in the ASM that is small-scale
mining become more responsible. Safety and health has been one
of the key concerns, then also illicit trade. However, I think
what hampers the these efforts by central banks to promote more
responsible gold processing is the policy of what they call no
questions asked policy.
I think countries like Zimbabwe have been implementing this
no questions asked policy. Essentially because government has
been trying to mobilize more resources, they just say bring
your gold and we'll give you your money. We don't ask questions
in terms of how as that gold mined using what kind of
infrastructure or any child labor or any other related forced
labor alone.
So I think that is a policy that has also contributed to
some of the problems we have in the gold processing. And also
more promoting these responsible gold processing initiatives.
When coming to your question around, I think, the Gold Supply
Chain Act, Cobalt Supply Chain Act, I think it's quite an
important piece of legislation that I think if implemented
could actually address some of the problems we are talking
about.
However, I think while it's important that this presumption
of cobalt that has been processed in PRC. What we find in PRC
is associated with forced labor. The cobalt supply chain is
very intricate.
If the act can also maybe consider what are the potential
for other actors that are not, say, PRC, that might actually be
refining cobalt and sending out to the U.S. market. I think
restrictions and even the enforcer of this law need to also be
thinking creatively and innovatively because it's not all the
cobalt that is being refined in PRC even though, of course, the
focus has been China.
Then I think the other thing is around national security
strategy because China dominates cobalt extraction and
processing. It's important for ensuring that there's more
coordinated approach at the U.S.-Africa level. African
government, as I mentioned earlier on are looking for
investments that are going to be value adding products on the
continent.
That is a big opportunity that U.S. can also actually top
into and set up those refining and processing facilities on the
continent. It creates jobs. It also creates the investments
more secure and even government buy-in. So I think we need to
think strategically and ensure that whatever we are proposing
is going to allow lasting solutions and benefits for Africa and
the U.S. Thank you.
Mr. Smith. Thank you very much. Ms. Kamlager-Dove.
Ms. Kamlager-Dove. Thank you. I want to thank the chair and
the ranking member for allowing me to participate. I am no
longer on this committee, and I miss it. I want to thank the
witnesses for being there today.
I also want to just thank the committee for making an
accommodation for us to have a witness virtually because not
all committees do that. I appreciate the chair for holding this
hearing to address to address human rights abuses in the DRC's
mining sector perpetuated by Chinese companies but also by
broader issues of corruption, impunity, and lack of economic
opportunity that U.S. assistants should address. I was grateful
to hear some of the earlier discussions about financing.
But the other reality is that right now Africa does not
have a partner in the White House just by the very nature of
dismantling our global foreign aid architecture and pulling
back on key areas of engagement, something that China and
Russia are applauding. There has been a zero Africa policy
coming from this administration a belittling and a
marginalizing of the continent not just with its challenges but
also with its opportunities. The global relationship that the
continent has not just with us but with our allies and also
with our adversaries.
We talk a lot about exploitation. But there would be far
more exploitation happening without any aid because rapings and
killings and exploitation happens when there is no food, when
there is no medicine, when there is no hope. That is just real,
regardless of what continent you are on.
The death eaters at the State Department and USAID has
disrupted life saving aid to the world's worst humanitarian
crisis in Sudan and the Congo by whipping up PEPFAR, by
exacerbating famine, and attacking the international
institutions that support stability in the region. By doing all
of these things, we have also yielded to China and Russia in
this space.
The chair is absolutely correct. Platitudes are great, but
engagement is more meaningful. And you cannot have engagement
when you are not present. You cannot have engagement when you
are not offering support and assistance.
And if you are going to be silent in that space, then that
also means you are going to be unbothered by human rights
abuses, by conflict, by malign foreign influences that are
spreading across Africa. And we can dangle as many mineral
deals in front of folks as we want. But if you don't think that
Africa is worthy, if you pay limited, if any, attention to the
continent, if you siphon away and stop resources going toward
the continent, you are aiding and abetting what China is doing.
Mr. Nguramo, and I hope I said it correctly. Apologies. Oh,
great. You said CCP should or could put up guardrails. But
who's going to make them? Who is going to make them?
If we don't even care enough about Africa to stay involved,
then why would any--what would be our benefit to making them? I
mean, so it's just like we have to take the rose-colored
glasses off and live in the real world. And here are my
questions.
Mr. Lezhnev, in order to address exploitation in Africa's
mining sector and pave the way for U.S. investment, what levels
of sustained engagement in foreign assistance would be required
from the United States? And is our posture on the continent
currently conducive to promoting that?
Mr. Lezhnev. Great comment, and thank you for the good
question. I think that as the administration considers where to
refocus some of the aid that has been suspended, I would
highlight a couple of areas. No. 1 is we really need to
legalize the artisanal miners to help them legalize.
These people are mining day-to-day, right? But they need a
legal framework to operate. We have the same thing here in
United States in California, the rush of 1849. And the reason
that we didn't have conflict minerals in California is because
we had rule of law.
So people had property rights and legally enforceable
contracts, et cetera. These are the things that are needed in
the DRC and elsewhere on the continent. And there are things
that we can do to support that, support the DRC mining ministry
and help hold those accountable who are completely breaking it.
No. 2 is much better support to certification process,
right? There is--Mr. Smith, you mentioned the central banks
buying. Well, the DRC set up a gold buying program in the last
couple of years that originally had UAE investment and the
Emiratis pulled out because U.N. experts found that there were
lots conflict minerals in this gold buying program.
It wasn't a central bank, but it was a similar set up. And
so for high risk, there's central bank buying and there's
central bank buying. So for high risk areas like the DRC really
needs to have proper certification on the ground. The
governments of the region have agreed on a certification
process.
I was actually involved in Bujumbura when they wrote this
thing. And me and some other NGO's advised on it. It's very
good on paper. It has all these checks and balances, et cetera.
But it's not being implemented well. And so that's where
the Public-Private Alliance on Responsible Minerals Trade,
there needs to be more support to that. And those are the kinds
of things that can counter illicit activity by China and
others.
Ms. Kamlager-Dove. So then what about--and my last
question, Mr. Chair. What about also brokering a sustainable
cease-fire to the destabilizing fighting led by the Rwandan-
backed M23? Can you speak about that?
I think that we have been missing in action leading Qatar
to convene peace talks between Congo and Rwanda. So does that
play a role? I think stabilization in the region is incredibly
important. Are you maybe aware of a U.S. role in trying to
preserve the fragile cease-fire I guess that was reached last
week, maybe on Signal? Did you get anything on Signal?
Mr. Lezhnev. I think that the cease-fire was a nice piece
of paper that was quickly followed by a Rwanda military advance
to Kisangani or toward Kisangani. And the reality is unless
Rwanda and the DRC actors who are aiding and abetting other
armed groups like the FDLR, unless they're held accountable,
then these pieces of paper will be completely meaningless. I
think that the initial step of sanctioning a senior Rwandan
government minister and some M23 officials and companies was
helpful.
The European Union followed by much stronger sanctions.
These one-off initiatives are good. But they're not going to
mean anything unless there's actually a sustained program to
pay attention to that. And then once there's a level of
seriousness to it, I mean, as somebody highlighted earlier, the
DRC army is running away at present, then you can see some
progress.
Ten years ago there was progress. And the blueprint is
there in front of us. There was an M23 conflict, and Rwanda
withdrew once there were serious consequences. And in
particular, World Bank money was pulled out and that had a
major impact because that's direct budget support.
Mr. Smith. Thank you. Mr. Jackson.
Mr. Jackson of Illinois. Thank you, Chairman Smith. Thank
you for your interest, your dedication, and your sincerity in
trying to find reconciliation and peace and prosperity to this
region. To my esteemed colleague, Congresswomen Kamlager-Dove,
thank you for your insight.
The Trump administration has embarked on a campaign against
USAID over the last 2 months, shuttering thousands of U.S.-
funded assistance programs across the globe. At least one of
those programs aimed at improving accountability in the DRC's
mining sector. The project and partnership with Enterprise,
EGC, and Responsible Mineral Initiatives, RMI, aim to ensure
that the production and export of cobalt and other strategic
minerals in the DRC met standards of social and environmental
responsibility and traceability and to address some of the
complex governance issues that contribute to the perception of
DRC as a high risk investment destination.
This program has since been terminated. I'd like to first
start off with Sasha if you don't mind. And I thank each of
your time and talent that have come before us today. Can you
please explain how the extraction of critical minerals in the
DRC fuels conflict?
Mr. Lezhnev. Sure. Thank you for highlighting these
important issues, Congressman Jackson. Yes, I mean, it's very
unfortunate that there are critical minerals in eastern Congo.
Tin, tantalum, and tungsten are the three that unfortunately
continue to fuel some of the conflict.
I will say I've been working on the DRC for about 17 years
now. And the situation for those particular minerals was much
worse before. And you had basically a free for all at mines and
companies had no idea where they got their minerals.
Now you have an auditing system, an industry set up thanks
to Congress to trace and audit these minerals. And almost two-
thirds of them, 66 percent of the smelters which are the key
choke points in these supply chains have now actually passed
these independent audits. The issue is that there's some
smugglers on the ground who have taken advantage of some of
those loopholes and this traceability mechanism which we talked
about earlier, the ITSCI, which is pretty opaque and why the
electronics industry suspended them have gotten around some of
those systems.
So there needs to be better enforcement of the
certification mechanism and some of these transparency
standards so that there can be a much better symbiotic
relationship between the DRC, Congo--sorry, the DRC, Rwanda,
Uganda, et cetera, whereby there can be a peaceful trade. And
there has been a peaceful trade for some time. But
unfortunately, Rwanda and others have stepped in to take
advantage of some of that. But I do believe that can be
restored as long as there's real consequences for the illicit
actors.
Mr. Jackson of Illinois. Thank you. As well, Mr. Thierry,
as well, do you believe that the gutting of U.S. foreign
assistance in the DRC creates a void for China to fill as it
further pursues control of critical minerals?
Mr. Dongala. I would say based on my statement, I think the
void is created, yes, by our absence. We have--the sanction
system I said is pretty much all stick and no carrot. So I
recommended that we have a carrot sort of involvement with
OFAC, the Treasury, OFAC licensing.
But then what's happening right now with the assistance
program, I mean, I would almost defer to Congress because the
spending authority is yours. Under law, there is a presence.
But just right now we're going through a situation where the
U.S. Government is deciding to review all of these spending
decisions. So I think it's calling for the leadership of this
committee on these decisions to guide the administration on how
to make these most effective.
So I think the leadership of Chairman Smith and Ranking
Member Jacobs can be--it's probably warranted the most right
now to make sure that there's an absence or a void in the midst
of these decisions.
Mr. Jackson of Illinois. Thank you, Mr. Thierry. Again, I
thank each of you. And I would probably add to that for the
record. There's been a gutting of this department when the
employees had been removed. Life will go on.
There will be a continuous void. And to rebuild what
they've taken out in the last 2 months could take us five or 10
years from trying to capture that intellectual talent and
restaff these agencies. But then again, I'm honored to be here
with my esteemed chairman, Mr. Smith. And again, thank you each
for coming.
Mr. Smith. Thank you very much, Mr. Jackson. Any of you
would like to add before we close? Because your testimony has
been outstanding, incisive, and gives us a blueprint for
action. Thank you. Mr. Bore? Thank you. Thank you, and the
hearing is adjourned.
[Whereupon, at 12:39 p.m., the subcommittee was adjourned.]
APPENDIX
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Material Submitted for the Hearing Record