Importer in Brazil stops conflict rock purchases

The Chinese company China Molybdenum - which imported phosphate rock to its subsidiary in Brazil - will no longer purchase phosphate rock from occupied Western Sahara. 

14 October 2021

Above: In 2020, WSRW followed trucks that transported phosphate rock from the port of Santos to a closed industrial area. 

Morocco's exports of phosphate rock from occupied Western Sahara to a Chinese-owned company in Brazil will not happen again, according to the Chinese importing company. 

Earlier this year, Western Sahara Resource Watch (WSRW) wrote that it had tracked shipments of phosphate rock from occupied Western Sahara to an industrial compound in Cubatão, Brazil. A fleet of trucks was seen transporting the cargo the 20 minutes from the port, until they passed through security gates of the large industrial area.

From what WSRW learned from sources in Santos, in fact two importers were behind the incidents. One of the two companies, Copebras, a subsidiary in Brazil of the company China Molybdenum, did not respond to a Brazilian media request following the revelation. WSRW also contacted China Molybdenum earlier this year, with no response. 

However, the company's investors have been more successful. 

WSRW has been in contact with three of the owners of China Molybdenum who have all received this same information from the investor relations department of the company. The company has stopped the purchases. 

“We made contact with the company in order to learn more about the incident. We had a good dialogue with the company, where they assured us that it was a one-time incident, and that it is a topic that they are following closely. The company clarified that it will not purchase phosphate, without first having carried out further due diligence”, Kiran Aziz, senior analyst in KLP Asset Management in Norway told WSRW. 

Another China Molybdenum investor in another country had received the response that no further imports will take place. 

The Chinese company has allegedly clarified to the owners that the incidents were not part of a long term agreement. 

WSRW has identified three shipments to Brazil in 2020 and two in 2019, with a total cargo of around 166.600 tonnes. No shipments of phosphate rock have been made from Western Sahara to Brazil since December 2020. 

From what WSRW learned from sources on the ground in Brazil in December 2020, was that another company - in addition to China Molybdenum - also was involved in the imports of rock from the territory. That company denied to Brazilian media its involvement. 

The trade is detailed in the annual WSRW report series P for Plunder, available here.  

As Morocco's export of the conflict mineral from Western Sahara to the Canadian company Nutrien ended in 2018 following pressure from its investors, the total export from the territory was nearly halved. Since then, Morocco has tried to find new clients internationally for the controversial product. Exports resumed to Mexico in July 2021, for the first time since 2014. And then companies in Brazil imported in 2019-2020, for the first time in many years. 

Western Sahara has been under foreign occupation by Morocco since 1975, and Morocco's exports of rock from the territory takes place in violation of international law. A ruling of the EU Court of Justice from 29 September 2021 confirmed that the Saharawi people's right to consent is a prerequisite for the legality of trade agreements with the territory. 

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