Unit 1: IB BM Real world news: MNC’s thirst for Coltan

This case explores globalisation’s impact on supply chains, ethics, and labour rights, linking to concepts such as CSR, stakeholder conflict, PESTLE analysis, and sustainability on the IB Business Management course. 

In the hills of Eastern Democratic Republic of Congo (DRC), more than 10,000 workers dig coltan from the earth—an ore that feeds the global demand for smartphones, electric vehicles, and laptops. Major multinational companies (MNCs), including Apple, Tesla, Samsung, and materials giants like Traxys and H.C. Starck, depend on tantalum extracted from this mineral to keep their supply chains flowing and meet the expectations of their tech-hungry customers.

This situation reflects how globalisation creates both opportunities and challenges for businesses. On one hand, MNCs can access critical resources at a lower cost, achieve economies of scale, and sustain competitive advantage. On the other, they risk becoming entangled in complex ethical and operational issues that test their commitment to corporate social responsibility (CSR).

The primary sector trap: is the DRC stuck?

The coltan trade highlights what development economists call the resource curse. Despite the DRC holding 15% of the world’s coltan reserves, local communities see little benefit. Most artisanal miners earn just $2–8 per day, far below a living wage. The wealth generated flows out of the country in raw material exports, leaving behind a fragile infrastructure and limited prospects for economic diversification.

From a business perspective, this illustrates how countries rich in raw materials can become stuck in the primary sector of the economy—focused on extraction and low-skilled labour—while high-value manufacturing and technology development (secondary and tertiary sectors) happen elsewhere.

This creates a dilemma: should MNCs sourcing coltan help the DRC develop its own industries, or continue relying on an extractive model that benefits their shareholders but does little for the host country’s long-term development?

Working conditions and labour rights

At the Rubaya mine, conditions are harsh and often dangerous. Miners work in suffocating tunnels prone to collapse, without proper ventilation or protective gear. Exposure to harmful gases and extreme heat is common. The lack of trade unions means workers have no collective voice to negotiate better pay or safer conditions. In theory, Congolese law supports unionisation, but in practice, weak governance and informal labour arrangements make this almost impossible.

These factors reduce the mobility of labour, as miners have few alternatives and are often trapped in cycles of poverty. Without investment in education and skills, their ability to transition into higher-value roles in the global supply chain is severely limited.

PESTLE and SWOT: analysing the environment

The situation in the DRC provides fertile ground for applying PESTLE and SWOT analysis:

• Political (P): Rebel groups like M23 control many mining sites, creating instability and uncertainty for investors. Weak enforcement of labour laws adds risk.

• Economic (E): The DRC economy is heavily reliant on raw mineral exports, but lacks infrastructure to add value locally. MNCs benefit from low input costs, but the arrangement reinforces inequality.

• Social (S): Exploitation concerns and poor working conditions damage the reputation of global brands, sparking stakeholder conflict with consumers and NGOs demanding ethical sourcing.

• Technological (T): While Western companies innovate with battery technology, little technological transfer happens in the DRC.

• Legal (L): Lax enforcement of labour laws and limited unionisation leave workers unprotected.

• Environmental (E): Mining operations scar the landscape and threaten ecosystems, undermining sustainability goals.

SWOT Summary:

• Strengths/Opportunities: High global demand for coltan; potential for investment in local value-adding industries.

• Weaknesses/Threats: Political instability, weak institutions, reputational risks for MNCs, and overreliance on raw exports.

Globalisation’s winners and losers

For MNCs, globalisation enables supply chain efficiencies and economies of scale, reducing costs and keeping consumers happy. For the DRC, however, the benefits are less clear. Without significant structural reforms and foreign investment in education, technology, and infrastructure, the country risks remaining a supplier of cheap raw materials rather than moving up the value chain.

This dynamic underscores the tension between short-term shareholder value and long-term stakeholder interests—a recurring theme in IB Business Management. Can MNCs adopt CSR strategies that balance profitability with positive impact on host countries? Or will the coltan trade remain another example of globalisation’s “losers”?

Read the original article

Inside the Congolese mine vital to mobile phones, as rebels give BBC rare access

Linking theory to the real world IB Business Management style questions

Q1. Define the term primary sector in relation to the DRC’s economy. [2]
Q2. Define the term trade union. [2]
Q3. Explain two relevant PESTLE factors that may affect MNCs sourcing coltan from eastern DRC. [4]
Q4. Explain two ways that improved worker protections (e.g., living wages) could benefit both DRC miners and MNCs. [4]

Why read IB Business Management related news?

Reading IB Business Management related news helps to build your vocabulary, deepen your understanding of the syllabus and prepare you for the IB BM exam. It’ll help you achieve that elusive Level 7, write like a top student, master the theory and enhance your course knowledge! Stay tuned for more IB BM news to get you in top shape for your exams!

IB BM key terms, concepts and linkages

• Globalisation

• Primary sector

• Supply chain

• Corporate Social Responsibility (CSR)

• Economies of scale

• Trade unions

• Mobility of labour

• Political and legal (PESTLE)

• SWOT analysis

• Stakeholder conflict

• Informal economy

• Ethical sourcing

Useful links: Here you can extend your learning and research with some great links

1. The complete IB BM Business Management IA Guide: https://ibmonkeybusiness.site/ib-bm-business-management-ia-guide-level-7-2/
2. A guide to writing the perfect IB BM IA research question: https://ibmonkeybusiness.site/write-a-level-7-business-management-ia/
3. A great partner site (The Curious Economist) IB BM Business Management resources: https://thecuriouseconomist.com/ib-business-management-teaching-resources/#
4. The home page for BBC Business News: https://www.bbc.com/business