In a report by United Nations, the crackdown on “conflict minerals” coming from the Democratic Republic of Congo led by the United States, has backfired and is actually pushing the trade of such minerals deeper into the hands of criminals.

The United States and DRC has struggled to cut off funding to militias in Congo that are believed responsible for thousands of rapes and killings of villagers. Last year, in an effort to pressure Congo’s rebels, the United States adopted a law requiring the Securities and Exchange Commission (SEC) to write rules forcing companies to prove minerals they derived from Congo are “conflict free.”

However, the rules have not been finalized due to wide opposition from companies and industry groups, creating uncertainty that has led international trading firms to virtually stop all purchases from Congo, Reuters reported.

“(This) has mainly led to a loss of production and increased criminality, which I think everyone would agree is not a great result,” Gregory Salter, who worked as a consultant for the U.N. report, told Reuters.

Eight years after the official end of a war that killed more than 5 million people, Congo has struggled to tackle rebel groups and criminal elements within its own armed forces that haunt the densely forested east and enrich themselves on illegal mining.

Congo has some of the world's largest deposits of minerals including tin and coltan used in making cell phones and computers, but decades of conflict and corruption mean most of the population remains mired in poverty, a situation made worse by “conflict mineral” crackdown, the U.N. Group of Experts’ report noted.

“This refusal (by international companies) to purchase untagged material left many exporters ... bereft of their main, or only customers, and therefore incomes,” the group stated.

Congo exports dropped by around 90 percent following the decision by firms not to accept minerals from the region, mining officials told Reuters earlier this year

A former rebel, who is now a general in the Congolese army, is implicated in illegal mineral trafficking, the group said.

Bosco Ntaganda, who is subject to an ICC arrest warrant for war crimes, controls the supply of minerals from the Congolese city of Goma into neighbouring Rwanda, which has seen a rise in smuggling in 2011, the report said.

Mineral exports from Rwanda are expected to reach $150 million by the end of 2011, up from $118 million in the last financial year between July 2010 and July 2011.

Last month Rwanda returned more than 80 t (88 st) of minerals to Congo and Rwandan officials have told Reuters that the tagging system, which allows minerals to be traced back to their mine of origin, is working at "nearly 100 percent".

Congo's armed forces have faced repeated allegations of operating illegal mining rackets, and last year President Joseph Kabila suspended mining in the region for six months in an effort to demilitarize the industry.