
Responsible Sourcing: Facing-up to the challenge of ASM (longer version)
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Chemaf is a leading mineral exploration, mining and processing company in the Democratic Republic of the Congo (DRC). In July 2017, while exploring a commercial partnership with the company, Trafigura initiated a review, conducted by third-party assessor Kumi Consulting, examining Chemaf’s operations against our Responsible Sourcing standards. The review examined Chemaf’s operational facilities on the outskirts of Lubumbashi, and incorporated Mutoshi, a then dormant mine in Kolwezi, that Chemaf sought to develop.
In 2018, Trafigura Group entered into a three-year marketing agreement with Chemaf and its parent company Shalina Resources Ltd for cobalt hydroxide. A component of the agreement provided for Trafigura’s ongoing support to Chemaf in building the company’s ability to manage social and environmental impacts across its operations.
In light of Chemaf’s intention to develop its Mutoshi concession, initially through the appointment of an artisanal and small-scale mining (ASM) contractor, Trafigura engaged internationally respected NGO PACT in January 2018, to support Chemaf in the ongoing maintenance of a Responsible Mineral Sourcing programme in line with Trafigura’s standards.
In response to the threat of the COVID-19 virus and with a view to safeguarding the health of workers onsite and their surrounding communities, in March 2020 operations at the Mutoshi Pilot Project were suspended. It was later determined that operations would not restart owing to changes in DRC law which saw the establishment of Entreprise Générale du Cobalt (EGC), the DRC State Owned Entity responsible for the purchasing of all ASM cobalt. Click here to learn more about Trafigura’s engagement with EGC.
Whilst noting that the Mutoshi Pilot Project is no longer in operation, the below provides a full outline of the structure of the project, as well as the many and varied benefits it delivered.
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Extraction
Chemaf, a supplier of cobalt hydroxide to Trafigura, is initially developing its Mutoshi concession on a pilot-basis through the appointment of a single authorised ASM contractor, 'COMIAKOL'. In time, Chemaf intends for the concession to be mechanised, either in part or in full.
Chemaf has appointed a single cooperative, COMIAKOL, authorised by DRC Regulatory Authorities and representing approximately 5,000 ASM workers, to operate as a mining contractor on a designated area of the Mutoshi concession known as ‘Mutoshi Cobalt’.
For safety reasons, Chemaf has determined that only 5,000 workers can be present at Mutoshi Cobalt at any one time. Numbers onsite fluctuate and most workers operate on a week-on, week-off shift pattern.
The partnership working on this pilot project have sought to introduce and enhance operational controls at Mutoshi Cobalt. Controls of note include:
In the first six months of operations, achievements of the partnership have included as follows:
Processing
Having extracted cobalt ore from a controlled ASM area known as 'Mutoshi Cobalt', COMIAKOL then washes and prepares the material for sale in mineral washing basins. Doing so enhances the ratio of cobalt content to waste and, as such, the price that will be realised at point of sale.
All material recovered by ASM workers is handled and processed separately from material originating from Chemaf’s mechanised mines.
Having extracted cobalt ore from ‘Mutoshi Cobalt’, COMIAKOL then washes and prepares the material for sale in mineral washing basins. Doing so enhances the ratio of cobalt content to waste.
Purchasing
Assisted by Chemaf, COMIAKOL transports cobalt ore from Mutoshi Cobalt to a single Chemaf operated buying station. At the buying station, Chemaf conducts a technical analysis of cobalt ore, prices material according to purity and then provides a payment to COMIAKOL's workers.
All cobalt ore from the ‘Mutoshi Cobalt’ ASM pilot project is received by Chemaf’s single buying station, situated on the Mutoshi concession.
On arrival at the buying station, bags of ore are marked with a single identification code. That code is logged and a receipt is handed to the COMIAKOL representative responsible for its sale. Material is then crushed by Chemaf staff for sampling purposes, bagged and identified with the same identification code.
Samples are then analysed for mineral content. Such samples may contain, for example, traces of cobalt, copper and iron.
Chemaf’s preferred cobalt content for purchasing purposes is 2 per cent. According to the realised cobalt purity, Chemaf will provide a cash payment to the relevant COMIAKOL representative.
The purchasing process typically takes one day. If the COMIAKOL representative is not satisfied with Chemaf’s proposed payment they are permitted to remove material from the buying station for refining purposes. COMIAKOL representatives are not permitted to sell material outside of the concession, or to a buyer other than Chemaf.
Transportation
Cobalt ore leaves the buying station on trucks under tarpaulin that has been secured and tied by tamper-proof metal tags. Material from the Mutoshi ASM Pilot Project remains segregated at all times from material that has been mined at Chemaf's mechanised operations, for example, at their Etoile Mine.
Cobalt ore leaves Mutoshi on trucks under tarpaulin that has been secured and tied by tamper-proof metal tags. A cargo manifest is drawn up prior to departure which is then forwarded to Chemaf’s designated processing facility for verification at point of receipt.
On verification and approval, all ASM-sourced material is processed at a dedicated standalone facility, Chemaf’s Usoke Plant. All cobalt ore recovered at Chemaf’s mechanised mines is processed at its Etoile facility.
Once processed, the cobalt hydroxide produced by Chemaf’s Usoke Plant is bagged and branded according to its processing origin (Usoke).
For storage, transport and onward export purposes, Usoke origin product (i.e. originally from the Mutoshi ASM project) remains segregated from any other material (e.g. of mechanised mine origin).
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COMIAKOL operates under the observation of Chemaf's Health, Safety and Environment (HSE) team, two full-time representatives of the NGO "PACT". as well as representatives of the DRC's State Regulator for ASM "SAEMAPE". ("Service for Assistance and Supervision of Artisanal and Small-Scale Mining"). Trafigura's Head of Corporate Responsibility also conducts regular site assessments.
Trafigura has appointed Responsible Sourcing assessors "Kumi Consulting" to review the Mutoshi Pilot Project on a formal basis against a bespoke assessment protocol. The protocol is governed by a suite of Trafigura policies and expectations relevant to the operational context.
On a day-to-day basis, ASM workers operate under the observation of the following dedicated personnel:
All parties are represented on an official ASM Committee. Its proceedings are also informed by regular community engagement meetings, led by Chemaf.
Trafigura’s Head of Corporate Responsibility conducts regular site assessments which take place typically every quarter.
In January 2018, Trafigura signed a new strategic relationship with internationally respected NGO, PACT. PACT has extensive experience of working with artisanal miners in challenging environments. It is a sector leader in the practical implementation of Responsible ASM Sourcing.
Trafigura has been leveraging PACT’s developmental expertise at Mutoshi. This has become a key element in a growing partnership that is now extending to other localities and relationships. The Mutoshi pilot project has yielded important results that are applicable across other business relationships.
Assessments conducted by PACT are reinforced on a quarterly basis by Trafigura’s appointment of third-party assessor Kumi Consulting whose mandate it is to scrutinise the project in depth and report back on performance to Trafigura, Chemaf and PACT, as well as selected downstream partners.
Performance of the project is assessed against the OECD Due Diligence Guidance for Responsible Mineral Supply Chains, Trafigura’s own Business Principles for Health, Safety, Environment and Community performance, and the IFC Performance Standards, amongst others.
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