Gold supply chain to be re-evaluated

2 min read

A group of leading electronics companies, including the likes of Apple, Canon and Nokia may have to re-evaluate their supply chains, after reports that the gold they have been using has been extracted from a Tanzanian mine that has come in for heavy criticism for its poor environmental record and acts of violence towards the local population.

The North Mara mine is a combined open pit and underground gold mine and is run by the Acacia Mining company, which is listed on the London stock exchange and owned by the Canadian gold giant Barrick. It has been running the mine since 2006 and, to date, it has produced over 2 million ounces of gold. The associated processing plant can handle in excess of 8,000 tonnes of ore per day.

Reporters investigating the global supply chain have found that over the past 10 years the mine has seen more than a dozen killings of intruding locals by security personnel and that the Tanzanian government has now imposed penalties and ordered the mine’s operators to build an alternative to its tailings reservoir, which is used to store the by-products of the mine. The dam is said to have been poorly constructed and repeatedly fails.

The journalists behind the investigation are organised by the Forbidden Stories consortium, a group of 40 journalists, which has been investigating and tracking supply chains across Indian, Tanzania and Guatemala where questionable mining practices have been covered up.

In response, both Nokia and Canon have said that they would review their supply chains in the light of findings from the investigation, while Apple said that it was “deeply committed to the responsible sourcing of materials that go into its products”.

Under the law in Tanzania, no mine should operate within 200 metres of a home or 100 metres of a farm, both of which are not the case here and toxic waste water has been finding its way into the local water supply.

Acacia sends gold ore from the mine to refineries in Switzerland and India. Once it is processed it goes to MMTC-PAMP, a Swiss-Indian venture, which supplies companies in the tech industry.

Many companies are putting the environment at the heart of their message to consumers and the Organisation for Economic Cooperation and Development has said that responsible sourcing is an important part of doing business and a commercial need if a company is to access both markets and financing.

Over 500 companies look to source their gold from certified suppliers and MMTC-PAMP is currently one of those.

Both Canon and Nokia have said that the Indian smelter had been audited and found conformant but said that it the allegations made against the mine were confirmed they would ‘red flag’ the facility and look to divert business elsewhere

Nokia said that it was in contact with the refinery and industry regulators while Canon echoed other companies in noting that the MMTC-PAMP smelter had passed the conflict minerals audit conducted by the Responsible Minerals Initiative (RMI).

Apple said: “If a refiner is unable or unwilling to meet our standards, they will be removed from our supply chain.”

MMTC-PAMP said it conducted due diligence on every supply chain under its responsible precious metals policy, but while it was satisfied the mine had taken adequate measures to remediate human rights claims, it recognised that more needed to be done on the environment.

This story highlights a growing concern that regulators are not focused on multinationals and that responsibility tends to get diluted along the supply chain.