There are vile tales of exploitation in that big wide world out there: there are also such tales than we can and should do something about. Unfortunately we also get solutions enacted into law that are grossly wasteful. One such, on all counts, is the slavery, rape and forced child labour that goes into conflict minerals. It is a real world vileness, it's something we both should and can do something about and we've got the most absurd law I can think of in recent times -- Dodd Frank -- entirely screwing up how we do deal with it.

I don't work directly with the minerals under discussion, columbo-tantalite (the ore for tantalum), wolframite (the ore for tungsten) and cassiterite (the ore for tin) but I do deal with scandium, a metal that can be and is extracted from the wastes of processing those ores. So I have some front line experience of what's going on here. Gold, which is also on that list of conflict minerals, is for technical reasons an entirely different matter.

The basic background is that various thugs, rapists and would be feudal lords in the Congo have used the combination of that country's problems and the vast mineral wealth to set up mines staffed with slaves. The difficulty in dealing with them is that there are also a very much larger number of "artisanal" (meaning, roughly, working with a shovel and bucket) miners operating entirely legally in the area. So, we want to have some method of putting the slave owners out of business, possibly hanging them if we can, while doing the least damage possible to the legal miners and, of course, to ourselves, in the process.

What we've actually got is something called Section 1502 of the Dodd Frank Act. This says that all SEC registered companies (ie, everyone listed on a US stock exchange) must go around to all of their suppliers and ask them, well, are you using minerals from Congo or nearby? And if you are, have you made sure that you're not using conflict minerals: those mined by those slave drivers. Then every company has to say publicly whether they are, or are not, or are not bothering to find out, using said conflict minerals. This is all the result of the Blood in the Mobile campaign carried out by the Enough Project and Global Witness.

I, nor I assume anyone else, has any problem with the aim of all of this. Yes, stopping, or at least reducing, such exploitation is a noble goal. But what has me frothing with anger is that the method being employed to do this is so incredibly wasteful, damaging to ourselves.

I'd just like to point out that, despite my involvement in the industry, Dodd Frank makes absolutely no difference at all to me. I am not complaining because it is my pocketbook being hit, rather that society's is given the appallingly stupid design of this program.

For when you start to add up how much all of this is costing we find that the SEC itself says it will cost $3 to $4 billion just for the first year. That's a sum equal to about one fifth of the entire GDP of the Congo and if we were really going to try and concentrate on making things better there I'm sure we could find a better way of spending the money. For look at what is actually being asked: that everyone do a bit of paperwork. That's what that entire sum is being spent upon.

PWC has been running surveys on how this process is coming along and here's the latest one in which we find the following:

Many companies have full-time staffers assigned to conflict minerals. Also, 62% of respondents reported that they have one to two full-time resources working on their conflict minerals compliance efforts, with 21% indicating that they had three to five full-time resources and 6% having more that five full-time resources.

There are 5,000 fully listed companies in the US and 17,000 or so id we include the OTC and Pink Sheets. If we assume that we've got an average of two people only in just the fully listed companies that's the full time labour of 10,000 people just filling out paperwork to try to deal with this problem. Or, at the $100k or so it costs to keep a corporate type in salary and Blackberries, some $1 billion just there. Which is an absurd amount of scarce human labour to waste on a solution to such a problem. For example, who doesn't think that we could solve this permanently just by borrowing 10,000 US Marines for a few months?

You may have noted that both Apple (for tantalum only) and Intel have recently announced themselves to be conflict mineral free. Which is indeed true, they are: they've just not done it by following this absurd Dodd Frank process. They've actually done it the sensible, and cheap, way. Over here, at the EICC. People who actually understand the minerals world (you know, the people you might ask about how to solve such a problem) realise that there's only some 100 companies around the world that are capable of processing such minerals. And each and every of these companies analyses the ores as they come into the plants. Yes, every batch, every lot. With all of them you pay the suppliers on the percentage of the target metal that the ore contains. So columbo-tantalite is paid for per lb Ta2O5 contained, wolframite on %ge WO3 equivalent and so on. You also keep a sharp eye, especially with tantalite, on the presence of radioactives.

Then the BGR, the German government geological guys, made a database of the trace elements in the ores from each of the known mines around the world. So, adding those two facts together you can tell, when you analyse that bag of ore as you're going to anyway, which mine it came from. And it's hardly a complicated task to stick a couple of guys into each of those 100 plants to make sure that ores from conflict sources are rejected now, is it?

That is, for years now the industry (and I adding my little batsqueak of indignation) have been shouting that we can do this same task for a fraction of the Dodd Frank costs. Probably more effectively as well. And this is the way that the industry is actually solving the problem too, by concentrating upon the smelters. there's no need to do something as unproductive as having 10,000 corporate bureaucrats asking each other to fill out the same forms for each other.

But, sadly, that's what the law says must also happen and it's the simple pissing away of billions of $ worth of the accumulated wealth of our species. And, God help us all, Global Witness is currently arguing that the same rules should be extended to each and every (no, not just listed, but all) companies in the European Union.

That conflict minerals need to be dealt with I agree. But why is everyone supporting this being done in this grotequely inefficient manner? Wouldn't we prefer to spend a few tens of millions on checking the smelters and then use the rest of the billions for something else? I hear the world still needs a cure for sleeping sickness for example and we can't buy that if we've spaffed the money away on bureaucracy, can we?

[image via thinkstock]