By Joe Bavier
KINSHASA (Reuters) - Tin smelter Thaisarco said on Friday it was suspending purchases of tin ore from Congo, complaining that bad publicity was undermining industry efforts to combat illicit trading in the mineral.
The minerals trade has long been a key source of revenue for illegal armed groups in the east, including the Rwandan Hutu Democratic Forces for the Liberation of Rwanda (FDLR) made up in part of fighters responsible for Rwanda's 1994 genocide.
The U.N. Security Council last year extended arms sanctions to cover illicit trading in minerals from Congo, prompting Thaisarco and others to come up with a certification scheme aimed at ensuring the sector does not fuel conflict.
"Negative campaigning from advocacy groups and adverse coverage in sections of the international media is undermining the credibility of the process," said Giles Robbins, chairman of Thaisarco and director of UK-based parent company AMC.
"Although acting entirely lawfully, the threat of misleading and bad publicity remains for anyone who participates in the DRC tin trade. These pressures have led Thaisarco to suspend its purchases from the DRC," he added in a statement.
Thaisarco said it would resume smelting if it won broader support for the certification scheme.
"...We believe the mineral trade working with key stakeholders could, given the constructive engagement of all advocacy groups, be the catalyst for the return of security and economic prosperity to the Congo," Robbins added.
The company is not the first to pull out of eastern Congo as the United Nations and human rights groups step up pressure on foreign firms and local authorities to clean up the sector.
A U.N. experts report published last year said Belgium-based minerals merchant Traxys purchased in 2007 1,631 tonnes of the tin ore cassiterite and 226 tonnes of coltan from four Congolese companies which systematically buy from FDLR-controlled mines.
Both minerals are used to manufacture electronics devices, such as mobile phones and video games consoles.
While denying any wrongdoing, Traxys suspended the sourcing of minerals from eastern Democratic Republic of Congo in May, citing reputation grounds.
Local tin traders accuse the United Nations and campaigners of stifling the sector, the main income source for thousands of miners and dependents in the provinces of North and South Kivu.
The two neighbouring provinces supply the bulk of tin produced in Congo, Africa's biggest exporter of the metal.
"More than 70 percent of production from North and South Kivu was going to Thaisarco. It will be quite difficult for the sector to survive," John Kanyoni, the head of North Kivu's association of mineral buyers, said on Friday.
Before Friday's decision, Thaisarco was sourcing between 25 and 50 percent of its tin ore from Congo, an AMC spokesman said. But analysts played down the impact on the world tin market.
"I suppose potentially any material they don't take the Chinese would," said Neil Buxton, managing director of GFMS Consulting. "I'm not sure it would necessarily have a massive impact on the market."
Peter Kettle at UK-based tin consultant ITRI said it would take some time for the move to have an impact on metal output because of he long supply chain.
Separately, tin exporters in North Kivu said mineral dealers had stopped buying cassiterite shipments from Congo's biggest tin mine in protest against a new tax hike. The Bisie mine supplies around 70 percent of the provinces tin ore exports.
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