* Traceability rules aim to curb conflict minerals
* Slow implementation hurting artisanal miners
* Eastern Congo still a problem
By Jonny Hogg
BUSANGA, Democratic Republic of Congo, May 5 (Reuters) - Ragged barefoot miners watch bemused as a bag of tin ore cassiterite is ceremoniously weighed and tagged, ready for its long journey from Congo's forests for export.
For over a month, about 870 artisanal miners who work by hand in the muddy, flooded pits of the Busanga mine in the mineral rich province of Katanga, were forced to down tools.
The forced closure came after top tech firms including RIM <RIM.TO, Apple and Microsoft decided to push ahead with traceability rules aimed at breaking the link between mining and Congo's ongoing conflicts.
The new rules are aimed at curbing the funding of armed groups, and help end years of fighting in Congo, but many say they are also hurting poor communities in the process.
Congo supplies around 5 percent of the world's tin and is among four central African countries that produce 12.5-14 percent of the world's tantalum, used to make components in many hi-tech goods.
The companies, signatories to the Electronic Industry Citizenship Coalition (EICC) and Global eSustainability Initiative (GeSI) standards, agreed to curb the use of uncertified minerals from the region, the profits from which are partly used to fuel more conflicts.
A new U.S. legislation, the Dodd-Frank financial reform act expected later this year will also target the sourcing of 'conflict minerals' such as tantalum, tin and gold.
Malaysia Smelting Corporation (MSC) - one of the top purchasers of Congo's minerals - announced that from April 1 it would no longer buy untagged minerals from Congo or Rwanda.
As Congo's planned tagging system, backed by the tin industry body ITRI, is only now being rolled out, the decision had meant a de facto embargo on many Congolese minerals, putting at risk the livelihood of thousands of artisanal miners.
FAMILIES AT RISK
U.S-based development agency PACT says nearly 300,000 miners and their families - as many as 1.5 million people - have been affected across Congo's eastern and southern regions as the industry races to put in place traceability programmes.
"At the moment we are trying to save livelihoods," said Karen Hayes of the non-profit PACT, which has been charged with implementing the traceability programme.
Busanga is one of only a handful of mines, all in Katanga province, to have introduced the new system, which uses plastic tags and logbooks to trace the minerals back to their source.
The miners said they knew little about the process and its requirements, nor the purpose, only that they were suddenly unable to sell their wares.
"We don't know why they stopped (buying), we don't understand the new system, but it is good we can work again," said Jean Umbamutombo, a 24 year, adding that for the last month, they have barely had enough to eat.
Around half the artisanal miners left Busanga following the suspension of mining, looking for other ways to make a living in the minerals-rich country where poverty is rampant.
Umbamutombo - who makes around $30 a month from mining - had no other work so he stayed. With the tagging launched, miners are once more digging with shovels, knee-deep in the sand coloured water.
At the entrance to the mine others sit on large bags of tin ore, which they have been unable to sell since the suspension.
Busanga is controlled by an Indian owned company MMR, in partnership with the Congolese state mining arm, Gecamines. The company has helped fund the tagging process and its mines are some of the first to be targeted.
Rolling out the programme in other places, where there is no dominant player such as MMR will be trickier, said Elisabeth Caesens, a mining governance analyst with the Carter Centre.
"It will be more difficult to implement in areas where the security situation badly needs traceability, especially the Kivus," Caesens said.
Katanga has few of the security problems that plague Congo's troubled east, where the mineral trade is an important source of cash for armed groups that continue to roam despite the official end to years of fighting that killed some 5 million people.
Last year the U.N. said the majority of mines in North and South Kivu were controlled by armed groups.
President Joseph Kabila's decision to ban mining for six months in the region was meant to tackle the problem but analysts say Congo's army has simply replaced the rebels.
Even if the nascent traceability programme can be rolled out, it doesn't go far enough in tackling the problems of Congo's dysfunctional artisanal mining sector, Caesens added.
"Just putting a tag on a bag doesn't solve all the other problems, such as living conditions or who gets access to the minerals and what political and power networks are at play."
PACT's Hayes says due to logistical and financial problems it remains unclear when the programme will be rolled out in the east and in the meantime some could attempt to channel 'conflict minerals' through Katanga's certified mines.
Some $10 million more in funding was needed, she said.
In the meantime, the de facto embargo had removed the only source of income for many people in the east already living with the conflict, Hayes said.
"Before they were scrapping a living through mining, now they can't even do that." (Editing by Bate Felix and James Jukwey)