From Congo through Chicago: Understanding the Life-Cycles 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 they’ve 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, 1996Photo: 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 millionpeople have died since the Second Congo War began in 1998, the deadliest conflict since World War II. • More than half have died since the war’s official end in 2003, an estimated 90% of this total from disease and starvation. • More than 1,000 people dailyare 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 war’s 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. Sources:International Rescue CommitteeHuman Rights WatchAmnesty International Documentary films: -Lumo-The Greatest Silence: Rape in the Congo

8. The Northeast: Ituri, North Kivu, South Kivu • 64 – 80% of world’s known reserves of tantalum (found in columbite-tantalite ore, known in the mud in which it resides as coltan) • One third of world’s 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 DRC’s tantalum: USA • Percentage of US tantalum imported: 90% Source: UN Global Policy Form

10. Cassiterite is a main source of the world’s 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 world’s known reserves of copper • 30 – 40% of world’s 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 DRCPhoto: Finbarr O’Reilly / 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 bysanctions? What political solutions existfor 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, 2004Photo: 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 haulersrole -- government contractorspaid -- by pick-up feesincentive -- to throw out(and deliver to landfills, which they may also own) Recyclersrole -- private industrypaid -- by the poundincentive -- 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 China’s 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 country’s 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 2006-08Peaks of $4.00/pound Historical average~ $1.30/pound Like the DRC’s 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 dollarsto 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 leveragemoney 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 Chicago’s scrappers? Here’s 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: spouse’s 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 city’s 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, “Ctrl+Alt+Landfill: China’s 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 world’s 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 What’s 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/2009/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/outreach/workshops/08-09/090508-childsoldiers.shtml The ENOUGH project (DRC): http://www.enoughproject.org/ 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.html 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/dirt/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

38. Congo Concepts: legacies of colonialism and genocide • Congo was King Leopold of Belgium’s 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, 1934Photos: 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 hasn’t stopped.

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