7th Annual CASM Conference

1. 7th Annual CASM Conference Certified Trading Chains (CTC)in Mineral Production Markus Wagner, Gudrun Franken, Nicola Martin, Frank Melcher,Anna Stetter, Jürgen Vasters and Elke Westphale BGR – German Federal Institute for Geosciences and Natural Resources Ulaanbaatar, Mongolia, September 8 -12, 2007

2. CTC Background G8 Summit Declaration 2007, Heiligendamm, Germany RESPONSIBILITY FOR RAW MATERIALS:TRANSPARENCY AND SUSTAINABLE GROWTH 85. Certification systems can be a suitable instrument… for increasing transparency and good governance in the extraction… of… raw materials and to reduce environmental impacts, support the compliance with minimum social standards and resolutely counter illegal resource extraction.

3. CTC Background II G8 Summit Declaration 2007, Heiligendamm, Germany 86. The artisanal and small-scale mining sector provides important livelihoods to many people in developing countries… these activities often are conducted in an informal manner and do not meet minimum social and environmental standards. •  (Therefore, we) support a pilot study, in co-operation with the World Bank and its initiatives (CASM), concerning the feasibility of a… certification system for… raw materials… (with) focus on the artisanal and small scale mining sector…

4. Why ASM? German Mineral Consumption 5 g Gold – 10% Total consumption 50 g 60 g Tantalum – 20% Share of ASM 300 g 100 g Silver – 8% 1.200 g 600 g Cobalt – 30% 2 kg 450 g Tungsten – >6% 7 kg 5 kg Tin – 25% 20 kg 10 kg Lead – 3% 350 kg 7,5 kg Zinc – 1% 700 kg Source: BGR databank 5 kg Copper – 0,5% 1.100 kg 1.350 kg Iron Ore – <4% 35 t Statistical consumption per capita during an average 79 years lifetime

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

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

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

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

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

10. CTC Pilot Project Tungsten, Kayonza, Rwanda

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

12. 6 5 4 TiO2 wt% 3 Major Elements 2 1 0 0 20 40 60 80 100 XMn CTC Analytical Fingerprint for Coltan Ores - Geology - Modal Mineralogy - Radiometric Age - Geochemistry Trace Elements Uganda Ruanda DRC Burundi „Kibaran“

13. Identified „Champions“: • EITI (Extractive Industries Transparency Initiative) • ICGLR (Regional Mechanism for Certification of Natural Resources) • Bilateral Donors: Germany, (G8 Partners) • CASM (Communities and Small Scale Mining Initiative) CTC International Dialogue - G8 Summit Declaration • 16 November 2007: Global Conferenceon“Transparency in the Minerals Sector” on the eve • of G20 Finance Minister Meeting • Dialogue with existing initiatives (KP, DDI, ARM, Durban Process) • 2008: Consultation Process

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