US sanctions armed group, Hong Kong firms over Congo mining

The US sanctioned an armed group and two Hong Kong-based firms allegedly linked to violence and illegal mining in the Democratic Republic of Congo, part of what officials said was an effort to combat the trade of conflict minerals from the region.

The Treasury Department’s Office of Foreign Assets Control imposed penalties on PARECO-FF, a successor movement to what it said was an armed group with a history of “destabilizing activities in the DRC,” according to a statement. The group “imposed forced labor and executed civilians in mining areas under its control,” the Treasury said.

Also sanctioned were East Rise Corporation Ltd. and Star Dragon Corporation Ltd., both based in Hong Kong, which the US said purchased illicitly procured minerals. Congolese mining company Cooperative des Artisanaux Miniers du Congo, or CDMC, was penalized too for allegedly selling material “sourced and smuggled from PARECO-FF areas of control” to the two foreign firms.

CDMC “categorically rejects the allegations linking our cooperative to any form of armed group activity or mineral smuggling,” the company said in a statement. East Rise and Star Dragon didn’t respond to requests for comment.

The sanctions focus on Rubaya, a mining area in eastern Congo that contains one of the world’s largest sources of tantalum ore, which is used in electronics. CDMC said it’s the “legal and registered holder” of the concession that includes the Rubaya area, but suspended all purchases in 2023 because of the insecurity in the region.

“We are not the perpetrators but the primary victims,” the company said.

The sanctions follow Congo and Rwanda signing a peace deal in Washington in June that’s meant to stop years of deadly conflict and promote development in Congo’s volatile east. The US helped broker the agreement, which seeks to end the occupation of a large swath of mineral-rich eastern Congo by the Rwanda-backed M23 rebel group.

US investment

The US and Congo are working on a separate partnership that may result in American investment in the central African nation’s world-class reserves of metals, including copper, cobalt and lithium.

Congo and neighboring Rwanda accounted for almost 60% of the world’s tantalum output last year, according to the US Geological Survey. Although a small market of about 2,500 tons a year, demand for the metal is driven by capacitators used in electronic products including smartphones and electric vehicles.

The allegations in the new sanctions relate to a period before the M23 occupied Rubaya in April 2024, when instead — according to the Treasury — PARECO-FF was in command of mining sites in the area, raising revenue by “collecting illegal fees and taxes from miners and engaging in minerals smuggling.”

The M23 itself is now overseeing the smuggling of Rubaya’s minerals, including tantalum and tin ores, to Rwanda, according to reports by United Nations experts published in January and July. The group was generating at least $800,000 a month from taxing the trade and had caused the “largest contamination of mineral supply chains” in the region to date, the earlier report said.

The US sanctioned the M23 in 2013 during the group’s initial rebellion and more recently has designated senior figures within the organization, along with several Rwandan officials accused of supporting the group. Rwanda denies backing the rebels.

Certain Congolese officials “backed by opaque diplomatic and financial channels” are waging “a coordinated effort to undermine” CDMC’s ownership of the large mining permit in the Rubaya area, the company said in a statement signed by CMDC President Serge Mulumba.

“The Treasury Department will not hesitate to take action against groups that deny the US and our allies access to the critical minerals vital for our national defense,” Under Secretary of the Treasury for Terrorism and Financial Intelligence John K. Hurley said in Tuesday’s statement.

(By Magdalena Del Valle and William Clowes)