* Dodd Frank law obliges firms to ensure no conflict
* ITRI tin industry body has started certification scheme in
* First certified minerals exports due from North Kivu
* Campaigners say scheme will require constant verification
By Peter Jones
GOMA, Democratic Republic of Congo, April 19 (Reuters) -
D emocratic Republic of Congo's tin producing North Kivu province
may begin exports of certified 'conflict-free' minerals as soon
as next week after the roll-out of a new barcode tagging scheme,
the head of the regional division of mines said.
North Kivu is at the heart of Congo's production of tin and
coltan - used in electronic devices such as mobile phones and
video game consoles. Various armed groups have funded their
operations for years by smuggling ore and taxing artisal miners.
In an effort to halt the violence, the United States
included a provision in the 2010 Dodd-Frank act obliging
U.S.-listed companies to ensure their supply chain was free from
Congolese conflict minerals, specifically gold, coltan, tin and
tungsten - a hard metal used in filaments, tools and weaponry.
Congo imposed a six-month ban on mining in North Kivu in
late 2010 and then, in early 2012, forbade mineral exports
unless they could be proven to come from conflict-free zones.
Congo's tin output slumped from 7,800 tonnes in 2009 to 2,900
two years later, according to the U.S. Geological Survey.
The new certification scheme organised by the tin industry
body ITRI, which was rolled out in North Kivu in early March,
aims to revive production by classifying mines according to a
'traffic-light' code - green for 'conflict free', yellow for
unclear, and red for mines in violence-plagued zones.
Production from conflict-free mines are bagged and tagged
with a barcode to make it easily traceable.
"We've validated 17 mining sites in North Kivu as green,
meaning conflict free," said Emmanuel Ndimubanzi Ngoroba, head
of Congo's division of mines in North Kivu. "Tagging has already
begun. If all goes well, we expect the first exports next week."
COLLAPSE IN PRICES
Millions are estimated to have died in nearly two decades of
bloodshed in eastern Congo, fuelled by the minerals smuggled
through Rwanda, Uganda and Burundi. Even before the U.S.
legislation took effect, big buyers like Apple Inc and
Hewlett Packard stopped sourcing metals from the region.
During the suspension in exports, mineral prices collapsed.
The only buyers were Chinese exporters, who were less troubled
by traceability, and smugglers.
A pilot ITRI project started in Congo's copper-rich
southeastern province of Katanga. It was then extended to South
Kivu, where tagging began at the Nyabibwe mine in late 2012.
The scheme's expansion into North Kivu has been facilitated
by the defeat in November of the M23 rebellion, which U.N.
experts said was heavily involved in mineral smuggling.
Almost all North Kivu's tin production comes from artisanal
mines - expect for the Bisie mine, run by Canada's Alphamin
Resources - and campaigners hope the scheme will ease
poverty for tens of thousands of miners.
"For many people, mining is their only source of income,"
said Ngoroba. "Exports have are indirect positive effects:
parents can afford to send their children to school."
Local traders, who have stockpiled minerals since 2012
without a means to export them, say they are committed to
keeping supply chains clean.
"If a mine classified as green turns orange or red, then we
are obliged to disengage with that mine. We must do our own due
diligence," said John Kanyoni, owner of Metachem trading in
Goma, capital of North Kivu.
Some traders, including Metachem, have already filed their
first due diligence reports in preparation for resuming exports.
"They're just the first reports: we can't expect them to be
perfect," said Ngoroba. "The people in charge of due diligence
at each of the trading houses still need to be fully trained."
The movement of armed groups in the province's forested
hinterlands makes it difficult for inspection teams to ensure a
site will not be overrun within weeks, or days, of a visit.
Transparency campaigners like Global Witness say timely
validation is essential to maintain the scheme's credibility.
They say tagged loads could be contaminated with conflict
minerals because agents at SAESSCAM, the agency representing
artisanal miners, are poorly paid and vulnerable to corruption.
Even correct tagging does not prove conflict-free status
because armed groups can tax loads on the way to the border,
said Sophia Pickles of Global Witness, urging exporters to
ensure scrutiny of the entire supply chain.
"International companies aren't looking for problems to be
swept under the carpet," she said. "They're looking for
responsible identification of problems and proof these have been
addressed in order to ensure the integrity of the supply chain."
A U.S. appeals court on Monday struck down parts of the
regulation forcing public companies to disclose if their
products contain "conflict minerals" from Congo, saying it
violates free speech rights.
But campaign groups said the court had upheld the broad
thrust of the measures.
(Additional reporting by Daniel Flynn in Dakar; Editing by
Daniel Flynn and Anthony Barker)