Tracing Gold From the Democratic Republic of the Congo: The Supply Chain

Why a gold supply chain study

The USGS analyzes supply chains — the flow of a mineral from ore through intermediate forms to a final product — to identify supply risks to the United States and give policymakers the facts they need.

U.S. law aims to cut the links between the trade in tantalum, tin, tungsten and gold — the "3TG" minerals — and armed groups in the Democratic Republic of the Congo (DRC) and neighboring countries. For tantalum, tin and tungsten, the smelters and refineries are the point where a mineral can be traced to its mine. This fact sheet, the fourth and last in the USGS series on 3TG minerals (the first covered tungsten, in 2014), turns to gold.

Why gold is different

Tantalum, tin and tungsten need large, specialized plants away from the mine. Gold can be semi-refined at or near the mine, and is so valuable in any form that it slips easily through undocumented channels.

• 30 kilograms (66 pounds) of 20-carat gold forms a cube about 12 centimeters on a side — the size of a small tissue box — worth nearly $1 million at $1,200 an ounce.
• The same value in tungsten concentrate weighs about 45 metric tons.
• Once conflict gold is blended with gold from other mines and scrap at a refinery, there is no feasible way to tell where it came from.

Gold in the world

Gold occurs as native metal, mined from hard rock and placer deposits or recovered as a byproduct of copper, lead, platinum-group, silver and zinc ores. It resists corrosion (though aqua regia, a mix of nitric and hydrochloric acids, dissolves it), is malleable and conducts heat and electricity well.

• Production: almost 100 countries reported gold production in 2009–2013, but six — China, Australia, Russia, the United States, South Africa and Peru — produced 53 percent.
• Uses: prized for beauty and permanence, gold is held as wealth in bars, coins, jewelry and art. About 7 percent of refined gold goes to uses such as electronic contacts, dentistry, medical devices and shielding in satellites.

Average world gold mine production by country, 2009–13. Six countries each produced more than 5% (53% together), 20 produced 1–5% (38%), and 73 less than 1% (9%). USGS.

The global supply chain

At the mine. Gold may come from large industrial mines, byproduct recovery, placer operations, or artisanal and small-scale gold mines (ASGM). Artisanal mines are dug by hand with shovels and sifters; small-scale mines may be semi-mechanized. Many ASGMs are remote, with little government oversight. Large mines usually produce doré bars of mostly gold and silver; ASGMs sell gold-bearing sand, flakes, nuggets or amalgam to a local buyer, who arranges further processing.

At the refinery. Besides large refineries, many small ones refine doré, low-grade material and scrap for jewelry makers, bypassing bullion certification. About 7,500 to 8,000 metric tons of gold were refined in 2013: 2,800 from mines, 1,600 from old scrap, and the rest from re-melted semi-manufactured goods and bars.

Above ground. Because gold does not corrode and is easily recycled, almost all the gold ever mined still exists — and can go back to a refinery with little processing.

Estimated above-ground stocks of gold at the end of 2014: 184,000 metric tons in all. Data from Thomson Reuters; chart by USGS.

Certified bullion

To sell bullion, a refinery must be certified. Ten markets certify refiners; together they list about 140 distinct refineries, though there may be more than 500 worldwide. Most gold bought by manufacturers passes through these markets.

The LBMA's 72 Good Delivery refineries produced about 85 to 90 percent of the world's refined gold in 2013. Certification vouches for purity, not origin; the LBMA, the Dubai Multi Commodities Center and the World Gold Council run separate programs to document that gold is not from a conflict region.

Gold from the Congo region

In 2009–2013 the DRC and its neighbors produced about 87 metric tons of gold a year — about 3 percent of the world's 2,650 tons.

Legal industrial mines. Unlike for the 3T minerals, the DRC has three large industrial gold mines producing for legal export — Kibali (Orientale Province), Namoya (Maniema) and Twangiza (South Kivu). They started in 2012 or 2013 and produced 2 tons in 2012 and 5 in 2013.

Artisanal mines. ASGMs in North and South Kivu and Ituri produce an estimated 11 to 14 tons a year.

• Recovery: miners pan or sluice, using gold's high density to separate it from sediment.
• Mercury: to concentrate it further, miners pour mercury into the gold-bearing sand and stir, often with bare hands. Heating the gray amalgam boils off the mercury. A retort could capture the mercury for reuse, but most operations do not use one, releasing vapor with serious consequences for human health and the environment.
• Sale: the gold, generally more than 50 percent pure (the rest mostly silver), goes to comptoirs — local buyers who may refine it further before export.
• Smuggling: according to a United Nations report, about 98 percent of the DRC's artisanal gold is exported illegally — for example by boat across the Ruzizi River or Lake Tanganyika to Burundi. About two-thirds of it passes through Uganda, with smaller amounts through Burundi and Tanzania.

Lost at the refinery. Once blended with other gold, conflict gold is almost impossible to identify. Unlike the chemically varied 3T ores, gold is usually found in elemental form with little chemical variation, so chemical analysis is unlikely ever to tag it as coming from a conflict region.

Sources

Based on Micheal W. George, with Omayra Bermúdez-Lugo and Thomas R. Yager, "Conflict Minerals From the Democratic Republic of the Congo—Gold Supply Chain," U.S. Geological Survey fact sheet (2015) (version 1.1); a work of the United States government in the public domain. The map, the pie chart and both tables are taken from the fact sheet's PDF; its photograph of an artisanal miner, credited to Corbis, is left out.