Blood gold warning at precious metals conference

September 27, 2010

, BERLIN, Sept 27 – A UN expert on the Democratic Republic of Congo warned a precious metals conference on Monday that "blood gold" threatened the industry with a "moral and public relations disaster."

"There is a high risk that any artisanally mined gold coming out of the country is \’blood gold,\’" Gregory Mthembu-Salter, a member of the UN Group of Experts on the conflict-riven but resource-rich African country, said.

He said rebels in eastern DRC, including those blamed by the UN for the rapes of at least 303 civilians in four days in July-August, were being financed by illegal mining of gold and other minerals that are exported worldwide.

"Gold is the mineral of choice for the murderous armed groups currently operating in eastern DRC," he said at the start of the two-day gathering of industry professionals in Berlin.

"The gold industry has a major moral and public relations disaster on its hands. Already activists have targeted the electronics and technology industry because of their opposition to so-called \’blood tin\’.

"Do not imagine that the gold industry can be far behind."

If the industry did nothing, "then you will have to face being stuck with the \’blood gold\’ label and the charge that through your inaction, you are aiding and abetting the DRC\’s murderous conflict," he warned.

He said that the industry, which is currently enjoying record prices for gold and silver, needs first to "acknowledge that it has a problem" and to certify properly where exactly gold comes from.

This would be along the lines of the Kimberly Process, established in 2003, which aims to certify where rough diamonds were mined in order to ensure that they are not "blood diamonds" feeding conflict in the world\’s hot spots.

DR Congo is plagued by instability and is ranked among the world\’s 20 most corrupt nations by governance watchdog Transparency International.

It also has huge reserves of resources used in a whole range of goods — such as coltan, for instance, used in mobile phones — drawing intense interest by foreign governments and firms.

Mthembu-Salter also said that his report, due to be made public in late November, accuses the DRC army of involvement of illegal mining, while neglecting its security duties.

"Where the rapes occurred last month (in the Walikale region) the army was not present because it was busy in the nearby … goldmine.

"We also have evidence that the military has colluded with the militia that perpetrate the killings and the rapes in order, it seems, to perpetuate the insecurity that justifies their presence."

Professionals at the conference, organised by the London Bullion Market Association (LBMA), appeared to show little or no interest, however, with discussion focused instead on the ins and outs of trading in precious metals.

Interview requests by AFP were met mostly with blank looks, although one participant, the head of a Ghanaian precious metals trading firm, said he believed many in his sector of the industry were uneasy.

"Personally I feel very uncomfortable when this comes up in the media, as a trader. You don\’t want to be in that environment," Rashid Ackah said.

"It was a bit left field for them," Mthembu-Salter told AFP.

"They have come with dollar signs in their eyes to talk about rising gold prices. This talk on blood gold was not what they were betting on.

"When consumers show they are interested, the markets will react."

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