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As part of Dodd-Frank, public companies were required to show that the minerals the used in their products would not benefit warlords in the Democratic Republic of Congo. But advocacy groups that rallied for the cause didn’t anticipate that companies that didn’t want their image tarnished by conflict-minerals, would overlook the country entirely.The embargo on conflict-minerals, essentially became an embargo of the country, according to a report in The New York Times.
High tech-companies that would get tin, tungsten, and tantalum from Congo, are now getting them from safer countries. And in a country with a GDP of about $12.6 billion, where mining accounts for about 11.8% of growth, this has been a particularly devastating blow.
As well meaning as the policy was, Dodd-Frank, referred to as ‘Obama Law’ has had the opposite effect. Smelting companies that would buy from eastern Congo have stopped doing so, and the dominos have fallen hard.
Miners and small-purchasers are losing work, and with families losing income, women who can no longer afford hospital fees are giving birth at home, and parents can’t afford to send their children to school. Villagers that depended on mining income to buy food, when their harvests failed, are now going hungry.
Meanwhile, the warlords and militia have merged with the Congolese Army that benefit from providing security to traders smuggling minerals across the border. The other warlords derive their money from kidnapping extorting rather than mining. Meanwhile Chinese companies not subject to any such rules are buying products at a massive discount.