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From Congo through Chicago: Understanding the LifeCycles of Metal Commodities in the Global Economy

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Title: From Congo through Chicago: Understanding the LifeCycles of Metal Commodities in the Global Economy


1
From Congo through Chicago Understanding the
Life-Cycles of Metal Commodities in the Global
Economy
Wolframite mining, Maniema Province, Democratic
Republic of Congo Photo by Julien Harneis
Mid-sized scrap yard, Englewood, South Side
Chicago Photo by Brian Ashby
2
  • Prepared by Brian Ashby
  • for the University of Chicago Center for
    International Studies 2009 Summer Teacher
    Institute
  • Understanding the Global Economy Bringing the
    World Market into your Classroom
  • June 22-25, 2009

3
  • EVERYTHING comes out of the ground
  • Try to imagine the origins of materials in your
    classroom, and where theyve been on their way to
    you

4
  • To maintain our current standard of living, each
    person in the USA requires over 48,000 pounds of
    minerals each year
  • 12,428 pounds of stone
  • 9,632 pounds of sand and gravel
  • 7,667 pounds of petroleum
  • 6,886 pounds of natural gas
  • 940 pounds of cement
  • 639 pounds of nonmetals
  • 425 pounds of iron ore
  • 400 pounds of salt
  • 307 pounds of phosphate rock
  • 276 pounds of clay
  • 77 pounds of bauxite (aluminum)
  • 29 pounds of other metals
  • 17 pounds of copper
  • 11 pounds of lead
  • 10 pounds of zinc
  • 6 pounds of manganese
  • 1/3 pound of uranium
  • 0.0285 ounces of gold

Source United States Geological Survey
5
The ecological rucksack
The consumption figures above only count the
refined final products. Mining also generates
large amounts of tailings, the leftover material
from separating valuable from worthless ore.
Nickel tailings 34, Sudbury, Ontario,
1996 Photo Edward Burtynsky
The ecological rucksack concept is a
measurement of mined material to
end-product - Gold 540,000 kg / 1 kg -
Aluminum 1.2 kg / 1 kg (Note all
the gold mined in the last 2,500 - Copper 356 kg
/ 1 kg years could fit in a box
with 72ft sides)
Source NOAH, Friends of the Earth Denmark
6
Mineral wealth in the Democratic Republic of Congo
Ex-child soldier mining gold, Mongbwalu,
Northeastern DRC, 2004 Photo Marcus Bleasdale /
Photo Agency VII
7
  • An estimated 5.4 million people have died since
    the Second Congo War began in 1998, the deadliest
    conflict since World War II.
  • More than half have died since the wars
    official end in 2003, an estimated 90 of this
    total from disease and starvation.
  • More than 1,000 people daily are still dying
    avoidable deaths in the DRC.

Mai Mai child soldier, Kanyabyongo, North Kivu,
2009 Photo Marcus Bleasdale / Photo Agency VII
  • The DRC conflict has employed the highest number
    of child soldiers in the world -- up to 40 of
    rebel and government forces at the wars height,
    with more than 10,000 yet to be de-mobilized.
  • 30,000 rapes have been reported in the DRC each
    year for the past 4 years. The unreported number
    could be 4 times higher.

Documentary films -Lumo -The Greatest Silence
Rape in the Congo
Sources International Rescue Committee Human
Rights Watch Amnesty International
8
The Northeast Ituri, North Kivu, South Kivu
  • 64 80 of worlds known reserves of tantalum
    (found in columbite-tantalite ore, known in the
    mud in which it resides as coltan)
  • One third of worlds known reserves of
    cassiterite (tin oxide)
  • Heavy deposits of silver, zinc, manganese,
    uranium, exotic timbers, coal, oil, and coffee

Ituri North Kivu South Kivu
Refined tantalum from coltan Photo Stephen
Hutcheon, The Age, 5/8/09
9
  • The dark side of the hi-tech wireless and
    weightless economy tantalum and cassiterite
    are used in the circuitry of nearly every cell
    phone, PDA, laptop, and video game console.
  • Tantalum is a lightweight and heat-resistant
    conductor of electricity, used extensively in the
    manufacture of miniature high-voltage capacitors.
  • As phones and wireless devices (ex. Bluetooth)
    have grown smaller, global demand for tantalum
    has risen tremendously
  • 1 export destination for the DRCs tantalum
    USA
  • Percentage of US tantalum imported 90

Source UN Global Policy Form
10
  • Cassiterite is a main source of the worlds tin,
    used in solder (which is melted to join metal
    surfaces)
  • Traditional makeup of solder 63 tin / 37 lead
  • The use of lead was banned in solder in consumer
    electronic goods by the EU and Japan in 2002,
    shortly after the start of the war in DRC.
    Lead-free solder contains 95 tin, and the
    demand for cassiterite grew by over 150 in 2
    years.
  • Thus the process of making phones more
    eco-friendly has also greatly increased the
    stakes of the Congo war

11
The South Katanga
  • 10 of worlds known reserves of copper
  • 30 40 of worlds known reserves of cobalt
  • Heavy deposits of gold and diamonds
  • Copper and cobalt are mined together in
    heterogenite ore. They are also used together in
    the manufacture of lithium ion batteries, used in
    most portable electronics.

Copper reserves in Katanga province visible from
space. Source Google Maps
Katanga
12
Cell phones
  • In 2005, worldwide mobile phone sales surpassed
    200 million per quarter production equivalent
    to one every 25 seconds.
  • In 2005, US consumers typically replaced their
    cell phones once every 18 months. In Western
    Europe, once a year.
  • In 2007, total mobile subscribers passed 2
    billion a phone for each 3 people on the
    planet.
  • Currently, despite take-back programs, less than
    1 of retired phones are recycled in the US.
  • It is not possible for human rights-conscious
    consumers to specifically boycott any of the
    complex array of minerals found in miniscule
    quantities inside their electronics.

Sources US Geological Survey, UN Global Policy
Forum
13
  • The war was not originally fought for natural
    resources, but after occupiers began mining
    operations, domestic and foreign rebel groups
    continue to fight for control of infrastructure
    and contracts.
  • Mining is performed by artisanal miners --
    local people responding to gold-rush conditions.
    Many are children.
  • Mining is performed using hands, pickaxes,
    plastic buckets, and troughs made of bark, in
    alluvial deposits (riverbed silt) or open pits,
    ranging from the size of one person to the pit
    featured at right.

Human chain in Chudja open-pit gold mine,
Northeastern DRC Photo Finbarr OReilly / Reuters
14
Current scenario
  • In April 2009, Senators Brownback (KS), Durbin
    (IL), and Feingold (WI) put forward the Congo
    Conflict Minerals Act, covering cassiterite,
    tantalum, and wolframite (tungsten).
  • Sanctions and embargoes -- Do they work? Are
    they humane? In which circumstances?
  • Even after taxation by paramilitaries, coltan
    miners can make up to 50 a day. Current
    average living standards in the DRC are still
    below 1 a day.
  • Can rebels with cross-border bases in Rwanda
    and Uganda be starved out by sanctions? What
    political solutions exist for the people of
    Eastern DRC?

Gold dealer, Bunia, Ituri Province Photo
Riccardo Gangale
15
Current scenario
  • An economics problem
  • Until this year, Talieson Minerals extracted 50
    of the world supply of tantalum from 2 mines in
    Australia (the other 50 coming mainly from DRC,
    Brazil, and Canada).
  • In January 2009, Talieson closed both mines,
    citing the downtown in consumer demand, the small
    fraction of their total business devoted to
    tantalum, and cheap, unregulated competition from
    DRC blood resources. They will resume activities
    once prices rise 80.
  • What might this mean for the world market in
    consumer electronics?
  • What might this mean for the fighting in the
    Congo?

Source The Age, 5/8/2009
16
Next Production of goods using metals
China Quarries 2, Xiamen, Fujian Province,
China, 2004 Photo Edward Burtynsky,
17
Next Use of goods
18
Recycling Chicago
Scrapper, Back of the Yards, South Side
Chicago Photo Brian Ashby
19
Trash as a valuable resource
Are you interested in what happens to your trash
after you throw it away? So are lots of other
people!
Waste haulers role -- government
contractors paid -- by pick-up fees incentive --
to throw out (and deliver to landfills, which
they may also own)
Recyclers role -- private industry paid -- by the
pound incentive -- to not throw out (and deliver
to industry for re-use)
These 2 industries are opposites, though they are
often portrayed as related.
20
Scrappers global informal labor
  • From 2003-2008, scrap metal recyclers around the
    world were responding to demand from the Chinese
    construction industry--rebar, siding, plumbing,
    etc.
  • Goal of Chinas Ministry of Civil Affairs Urban
    China 2020 mandate 400 new cities, 20 built
    annually from 2000-2020.
  • To conserve its natural resources and regulate
    its growth, China seeks its raw materials from
    recycled sources abroad.

Scrap workers harvest former Rockefeller Chapel
organ pipes, University of Chicago. Photo David
Schalliol
  • The informal sector un-taxed, un-regulated
    economic activity, not reflected in a countrys
    Gross National Product.
  • In developing countries the informal sector may
    be larger than the formal sector (ex. Nigeria).
    Informal sector labor is unacknowledged in the
    US, and often associated with illicit activity
    (ex. the drug trade).
  • US scrappers are often paid in cash, and pay tax
    only voluntarily.

21
The bubble bursts
Unprecedented growth 2003-06
2006-08 Peaks of 4.00/pound
Historical average 1.30/pound
Like the DRCs artisanal miners, the livelihoods
of American scrappers are tied to the fluctuating
prices of commodities on the London Metals
Exchange.
22
How does it work?
  • Scrap dealers make profits by upgrading scrap
    (separating it from upholstery, plastics, etc.),
    sorting metals out from each other, and
    identifying and specializing in different alloys
    (mixes) to exploit economies of scale.
  • Analysis and processing is done using X-ray
    spectrometry, eddy currents (electromagnetic
    bursts to separate ferrous nonferrous metals),
    and water streams and filters along with
    shredding, crushing, and/or baling.

Photo Bruker AXS
23
Balance of trade
  • As a consequence of globalization, container
    ships bring manufactured goods to the US from
    China and return home empty. It can cost only a
    few hundred dollars to send a shipping container
    full of recycled raw materials back to Asia. It
    is often cheaper to ship scrap abroad by sea than
    to send it to inland US mills and foundries by
    rail.

The stock exchange (derivatives market)
  • As in all commodity businesses (oil, livestock,
    etc.) and in the financial sector, scrap dealers
    leverage money and multiply their profits by
    hedging their bets. When a dealer receives a
    large order, and knows prices will remain the
    same or rise, they purchase futures for that
    metal commodity, and cash in following the sale.

24
Who are Chicagos scrappers? Heres two featured
in the documentary Scrappers
Photo Brian Ashby
Photo Andrew Narwocki,TimeOut
Chicago 9/4/08
Name
Oscar
Otis From
San Pedro Sula,
Honduras
Clarksdale, Mississippi Age
36

75 Lives
Northwest Side (Portage Park)
South Side (Marquette Park) Came to
Chicago 2000, began scrapping
immediately 1947, began
scrapping 1957 Sources of metal
alleys, residential moves
alleys, body fender shops Problems
no license/insurance, risk of
deportation
age/health Income after 2008 market crash
spouses work (domestic, assembly line)
Social Security
The film www.scrappersmovie.com Directed by
Brian Ashby, Ben Kolak, and Courtney Prokopas
25
Current scenario
  • A political science / civics problem
  • The city of Evanston, IL is currently considering
    a ban on private metal scavenging. It cites a
    loss of 85,000 in revenue -- pick-up fees it
    charges residents for large items.
  • Is it acceptable for a municipal government to
    consider a fee charged for the cost of service
    provision as revenue?
  • It is not clear whether the 85,000 figure
    includes either
  • The cost of the city collectors salaries and
    garbage trucks, or
  • The income received when the city sells the
    recyclables.
  • If not, how does including these factors change
    the financial equation?

26
  • A political science / civics problem
    (continued)
  • Should a city ever prohibit the free provision
    of a public service by private individuals? How
    do other factors relating to scavengers, such
    as theft and public safety, help or hurt the
    citys cause?
  • Other Chicagoland suburbs have maintained an
    older system of selling private junk peddling
    licenses, while ticketing the unlicensed. What
    pros and cons are there with this system?

Scrapper waiting in line to sell at General Iron
Industries, Chicago. Photo Nic Halverson, Odelay
Yonquero!, AREA Chicago, 6/7/08. Chicago garbage
picking ordinance. Photo Brian Ashby
27
The Future Peak Metal?
Available at New Scientist, 5/23/07
Economics teachers have your students discuss
possible flaws with the apocalyptic calculations
presented in these graphs. The data is discussed
in the article.
28
Cell phones again
  • The e-waste (electronic waste) recycling market
    is growing at an amazing speed.
  • In 2007, an estimated 500 million un-used phones
    in the US could be mined for 17 million pounds
    of copper, 6 million ounces of silver, 600,000
    ounces of gold, 250,000 ounces of palladium, and
    valuable quantities of 17 other metals.
  • However, almost all of the disassembly work is
    performed by hand in countries with poor workers
    rights protections (China, Sudan, Malaysia).
  • There is currently no technology to profitably
    reclaim tantalum.

Source US Geological Survey
29
Photos Luca Gabino, CtrlAltLandfill Chinas
Secret Computer Graveyard, Vice Magazine, 10/1/07
China Recycling 12, E-waste sorting, Zeguo,
Zhejiang Province, 2004 Photo Edward Burtynsky,
30
Recycling constant innovation
  • Landfill mining Landfills will soon have
    higher concentrations of useful ores than virgin
    ground for some elements, they already do.
    Currently practiced in the US for harvesting
    methane gasses.
  • Accretions on roads from automobile catalytic
    converters invention by UK biologists of
    bacteria to profitably separate platinum from
    dust after collection by street sweepers in dense
    urban areas. There is no synthetic alternative
    for platinum.
  • Air pollution mining recovery of nickel dust
    from acid rain in industrial Siberia, where one
    factory produces 20 of the worlds nickel supply.

Sources Worldchanging 12/25/07 New Scientist,
5/23/07 New York Times, 7/12/07
31
A final question for your students
  • Whats your crazy metal recovery scheme?

32
Further readings and additional teaching materials
33
Pre-readings for this talk
  • Distributed earlier, and now available online at
  • http//cis.uchicago.edu/outreach/summerinstitute/2
    009/resources.shtml
  • Under Brian Ashby
  • Covering DRC conflict, coltan cell phones, US
    scrap recycling and waste history, extraction of
    other metals around the globe, production of
    metal consumer goods

34
Further reading and resources (not in
pre-readings)
Uchicago Center for International Studies Global
Lessons, Human Rights and Accountability in
Contemporary Wars Child Soldiers, Rape, and
Blood Resources http//cis.uchicago.edu/outreac
h/workshops/08-09/090508-childsoldiers.shtml The
ENOUGH project (DRC) http//www.enoughproject.or
g/ Global Witness (natural resources and
conflict) http//www.globalwitness.org/ UN
Global Policy Forum Minerals in Conflict
http//www.globalpolicy.org/security-council/dark
-side-of-natural-resources/minerals-in-conflict.ht
ml Mineral Information Institute Your Source
for Natural Resource Teaching Materials
http//www.mii.org Alcoa - It All Starts with
Dirt http//www.alcoa.com/global/en/about_alcoa/d
irt/default.asp Encyclopedia of Chicago (waste,
ecology, and urban planning history)
http//www.encyclopedia.chicagohistory.org/
35
Graphic representation of mineral consumption in
an average US lifetime (Could be used while
teaching the metric system) Available at New
Scientist, 5/23/07
36
100x the final weight is required in copper ore
37
(No Transcript)
38
Congo Concepts legacies of colonialism and
genocide
  • Congo was King Leopold of Belgiums personal
    possession for 31 years. Half the population,
    8-10 million people, are thought to have died
    during this time of heavy rubber and ivory
    exploitation.
  • The current war began after the end of the
    Rwandan genocide, when the victorious Tutsi
    government pushed Hutu militia into Eastern DRC.
  • Multinational war in exchange for mining
    concessions, the Congolese government was aided
    by the armies of Zimbabwe, Angola, Namibia, Chad,
    Libya, and Sudan. Against them, the armies of
    Rwanda, Uganda, and Burundi annexed large
    territories in the East, and supported numerous
    rebel groups. The conflict is referred to as the
    African World War.

Mining in the Belgian Congo, 1938, 1934 Photos
The EUROMIN project
39
Congo Concepts transport corruption
  • The DRC is approximately the size of Western
    Europe, or 3 times the size of Texas, and has
    only 300 miles of paved roads.
  • Rebel-controlled mines are dug deep into
    inaccessible rainforests, national parks, and
    indigenous peoples territories.
  • Flows of goods and people are controlled by
    lengthy guarded footpaths and small private
    airstrips.
  • In DRC, as in all of Africa, networks of mainly
    Ukrainian and South African pilots charge a
    premium to carry goods via small Soviet-era
    planes across remote areas.
  • In addition to ferrying illicit natural
    resources, these transport companies are linked
    to arms smuggling, sanctions busting, drug
    trafficking, and coup attempts.

Photos Guy Tillim / Vanity Fair 6/13/07
40
  • Official government corruption leaves Congolese
    soldiers rarely paid. As a consequence, they
    pillage rather than protect local populations.
    Commanders collude with rebel leaders to gain
    mining concessions.
  • Contracts are made in DRC mining centers by
    mainly Chinese, Lebanese, and Indian buyers
    bribes are made to truck minerals across the
    borders with Rwanda, Uganda, and Zambia they
    find their way to ports in Tanzania, Mozambique,
    and South Africa are refined in the US, UK, and
    Europe and enter the global supply chain via
    markets in China and Russia.
  • Having passed through so many middleman, it is
    nearly impossible for multinational companies
    such as Sony, Apple, Nokia, Dell, and Ericsson to
    verify their suppliers claims of their
    materials countries of origin, let alone
    certification of mining practices. Major tantalum
    processors such as US-based Kemet and Cabot claim
    to have ceased buying from the DRC since 2001
    the trade hasnt stopped.

41
Statistics on US scrap recycling Available at
http//www.isri.org
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