Gold theft weakens Dar's case over new US law By KEVIN KELLEY THE EAST AFRICAN Posted Monday, March 14 2011 at 00:00 The recent seizure of an unspecified amount of gold at the port of Dar es Salaam is undermining Tanzania's efforts to win exemption from a new US law aimed at halting the trade in "conflict minerals." Large amounts of gold smuggled from the Democratic Republic of Congo have been seized in the past few weeks by Kenyan and Tanzanian authorities. The seizures have taken place as US government regulators prepare to implement a Wall Street reform law containing a provision requiring American companies to specify the source of gold essential for the manufacturing of their products. Known as the Dodd-Frank Act, the law labels all gold produced in 10 countries bordering the DRC as a "conflict mineral." This stipulation means that a US company importing gold and other specified minerals from those countries must prove that the resources were not extracted inside the DRC. Armed groups in eastern DRC responsible for thousands of civilian deaths finance their violent operations mainly through the smuggling of gold, cassiterite, columbite-tantalite, tungsten and tin - often via the ports of Dar and Mombasa. These minerals are used in many electronic items common in US households. Rules relating to the conflict minerals are due to take effect on April 1.Tanzanian business leaders and government ministers, along with the World Gold Council (WGC) have protested that section of the Dodd-Frank Act. They warn that the "conflict minerals" designation may stigmatise gold that is legitimately mined within Tanzania, thus jeopardising an important economic sector and some of the jobs it provides. The WGC, a trade and marketing association, argues that the Dodd-Frank regulations "should not start from the perspective of labelling all gold as a "conflict mineral" until it can be proven not to be. The council notes that Tanzania has not been involved in the fighting inside the DRC and that Tanzanian gold has never been linked to sources of financing for the warring parties in the DRC. The gold industry accounts for more than 100,000 jobs in Tanzania, the council adds.Ami Mpungwe, chairman of the Tanzania Chamber of Minerals and Energy, told US regulators late last month, according to Reuters, that the country could lose jobs and revenues as a result of the Dodd-Frank Act provisions. Tanzania is the world's fourth largest gold producer, reporting an output of 44 tonnes of gold last year. That amounts to almost two-thirds of all the gold produced in central Africa in 2010. Tanzania's gold exports last year were worth about $1.5 billion, which equates to one-third of Tanzania's foreign exchange earnings. The recent seizures of smuggled gold at Dar's port make it unlikely that US regulators will soften the "conflict minerals" reporting requirement in the case of Tanzania. Advocacy groups say the Dodd-Frank stipulations will not harm legitimate gold mining operations in Tanzania and could help deprive militias in the DRC of money needed to carry on their campaigns.