Conflict minerals

Conflict minerals

Conflict minerals are minerals mined in conditions of armed conflict and human rights abuses, notably in the eastern provinces of the Democratic Republic of the Congo, by the Congolese National Army and various armed rebel groups, including the Democratic Forces for the Liberation of Rwanda. The profits from the sale of these minerals finance continued fighting in the Second Congo War, and control of lucrative mines becomes a focus of the fighting as well.[1] The most commonly mined minerals are cassiterite, wolframite, coltan, and gold, which are extracted from the Eastern Congo, and passed through a variety of intermediaries before being purchased by multinational electronics companies. These minerals are essential in the manufacture of a variety of devices, like mobile phones, laptops, and MP3 players.[2]


The mines

Mines in eastern Congo are often located far from populated areas in remote, insecure and inaccessible regions. A recent study by IPIS indicates that armed groups are present at more than 50% of mining sites. At many sites, armed groups illegally tax, extort, and coerce civilians to work. Miners, including children, work up to 48-hour shifts amidst mudslides and tunnel collapses that kill many.[3] The groups are often affiliated with rebel groups, or with the Congolese National Army, but both use rape and violence to control the local population.[4]

The minerals

Currently, the list consists of only four minerals:

Columbite-tantalite (or Coltan, the colloquial African term) is the metal ore from which the element tantalum is extracted. Tantalum is used primarily for the production of capacitors, particularly for applications requiring high performance, a small compact format and high reliability, ranging widely from hearing aids and pacemakers, to airbags, GPS, ignition systems and anti-lock braking systems in automobiles, through to laptop computers, mobile phones, video game consoles, video cameras and digital cameras.[5] In its carbide form, tantalum possesses significant hardness and wear resistance properties. As a result, it is used in jet engine/turbine blades, drill bits, end mills and other tools.

Cassiterite is chief ore needed to produce tin, essential for the production of tin cans and solder on the circuit boards of electronic equipment.[6] Tin is also commonly a component of biocides, fungicides and as tetrabutyl tin/tetraoctyl tin, an intermediate in polyvinyl chloride (PVC) and high performance paint manufacturing.

Wolframite is an important source of the element tungsten. Tungsten is a very dense metal and is frequently used for this property, such as in fishing weights, dart tips and golf club heads. A significant amount of the tungsten is used as tungsten carbide. Like tantalum carbide, tungsten carbide possesses hardness and wear resistance properties and is frequently used in applications like metalworking tools, drill bits and milling. Smaller amounts are used to substitute lead in "green ammunition".[7] Minimal amounts are used in electronic devices, including the vibration function of cell phones and Blackberries.[8]

Gold is used in jewelry, electronics, dental products. It is also present in some chemical compounds used in certain semiconductor manufacturing processes.

These are sometimes referred to as "the 3T's and gold", 3TG, or even simply the "3T's". Under the US Conflict Minerals Law, additional minerals may be added to this list in the future.

Supply chains

Minerals mined in Eastern Congo pass through the hands of numerous middlemen as they are shipped out of Congo, through neighboring countries such as Rwanda or Burundi, to East Asian processing plants.[9] Because of this, the US Conflict Minerals Law applies to materials originating (or claimed to originate) from the DRC as well as the 9 adjoining countries: Angola, Burundi, Central African Republic, Congo Republic (a different nation than DRC), Rwanda, Sudan, Tanzania, Uganda and Zambia.

United States Law/Regulations

In April, 2009, Senator Sam Brownback (R-KS) introduced the Congo Conflict Minerals Act of 2009 to require electronics companies to verify and disclose their sources of cassiterite, wolframite, and tantalum. This legislation died in committee.

The current law, generally referred to as the "Conflict Minerals Law", was included as Section 1502 of the Dodd–Frank Wall Street Reform and Consumer Protection Act, passed by the US Senate on May 20, 2010 and signed by President Barack Obama on July 21, 2010.

The Securities and Exchange Commission (“SEC”) issued its proposed, far-reaching draft regulations to implement the Conflict Mineral Law. The regulations were proposed on December 15, 2010 and published in the Federal Register of December 23, 2010[10] would require U.S. and foreign companies to report and make public the use of so-called “conflict minerals” from the Democratic Republic of the Congo (DRC) or adjoining countries in their products. Comments on this proposal were originally due by January 31, 2011, but SEC extended the public comment period until March 2, 2011.[11] The law itself requires the regulations to be finalized no later than April 15, 2011.[12] Updated information states that SEC will miss the April 15 deadline and plans to defer publication of the final rule until the second half of 2011.[13]

One report concerning the proposal[14] stated the following statistics for the submitted comments:

  • Slightly more than 700 comment letters were submitted to SEC on the proposal;
  • Approximately 65% of those were form letters or basic letters from the general public supporting the rule's intent;
  • The remaining 35% (roughly 270) represent views of businesses, trade/industry associations, the investment/financial community, professional auditing firms, and other relevant governmental entities; and
  • Of those 270 comments, an estimated 200 contained substantive and/or technical comments.

That report also contains what it calls a "preview of the final SEC regulations" synthesized from their detailed research and analysis of a large body of documents, reports and other information on the law, proposed regulation and the current budget/political setting facing the SEC in the current administration.

The comments on the proposal can be reviewed by the public.[15]

Media reports published at the end of March/beginning of April 2011 appeared to indicate that the SEC rules were published and in place on April 1,[16][17],.[18] However, these reports actually were referring to the Electronic Industry Citizenship Coalition (EICC) and their industry association program they developed for their membership. Those reports erroneously used the words "regulations" and "rules" to refer to the EICC program.

The US law has not gone unnoticed by the international community, including entities seeking ways to undermine any required traceability efforts. A report published by a metals trading publication illustrated one DRC ore/mineral flow method that has apparently been devised to thwart detection.[19]

On July 15, 2011, the US State Department issued a statement[20] on the subject. Section 1502(c) of the Law mandates that the State Department work in conjunction with SEC on certain elements of conflict minerals policy development and support.

Auditing and reporting requirements

Fundamentally, the US Conflict Minerals Law contains two requirements that are closely connected: independent third party supply chain traceability audits and reporting of audit information to the public and SEC. However, even companies not directly regulated by SEC will be impacted by the audit requirements because information/audit requirements will be pushed down through entire supply chains, including privately-held and foreign-owned companies.

SEC has estimated that 1,199 “issuers” (i.e., companies subject to filing other SEC reports) will be required to submit full conflict mineral reports. This estimate was developed by finding the amount of tantalum produced by the DRC in comparison to global production (15% - 20%). The Commission selected the higher figure of 20% and multiplied that by 6,000 (the total number of "issuers" SEC will be required to do initial product/process evaluations).[21] This estimate does not account for the companies who supply materials to the “issuers” (but are not themselves SEC-regulated) but who will almost certainly be required to conduct conflict minerals audits to meet the demands of those customers. Other estimates indicate that the total number of US companies likely impacted may exceed 12,000.[22]

A major study of the potential scope and impact of the regulation was undertaken in early 2011 by the IPC - Association Connecting Electronic Industries.[23] This study was submitted as part of the association's comments to SEC on the rule and provides the respondents' views on their estimates of the breadth of effort required to meet the regulations.[24] The study states that the IPC survey respondents had a median of 163 direct suppliers. Applying that number to the SEC's estimated number of impacted issuers results in the possibility of over 195,000 businesses that could be subject to some level of supply chain traceability effort.

Applicability in general

Under the law, companies would be required to submit an annual conflict minerals report to the SEC if: (a) they are required to file reports with the SEC under the Exchange Act of 1934 and, (b) conflict minerals are necessary to the functionality or production of a product that they manufacture or contract to be manufactured. That statement contains two separate - but critical concepts: the purpose of the conflict mineral in the product/process, and the control that the company exerts over the manufacturing process/specifications.

A company would be deemed to contract an item to be manufactured if it:

• Exerts any influence over the manufacturing process; or,

• Offers a generic product under its own brand name or a separate brand name (regardless of whether the company has any influence over the manufacturing process) and the company contracted to have the product manufactured specifically for itself.

This language implies that some retailers who are not themselves manufacturers are likely to be subject to the audit and disclosure requirements.[25]

The proposed regulations attempted to clarify that tools used in the assembly/manufacturing process will not trigger the applicability of the law.[26] The intent is to cover minerals/metals that are incorporated directly into the final product. There is currently nothing specifically addressing the applicability to intermediate chemical processes using chemicals that contain conflict minerals.[27] Additionally, neither the law nor the proposed regulation established a de minimis quantity or other form of materiality threshold that would preclude the applicability of the auditing/reporting requirements.[28]

Supply chain traceability auditing

The law mandates the use of an "independent private sector auditor" to conduct the audits. SEC has proposed two different activities related to the audits: the "reasonable inquiry" and the "due diligence".[29] Should the final rule include this structure, the reasonable inquiry would be the first step to determine if the company can on its own, using reasonable efforts and trustworthy information, make a reliable determination as to the source/origin of its tin, tantalum, tungsten and/or gold. Where companies are unable to make such a determination for any reason, they would then be required to take the next step of the "due diligence", which is the independent private sector audit.

The statute specifies that the audits be "conducted in accordance with standards established by the Comptroller General of the United States, in accordance with rules promulgated by the Commission", meaning that the same auditing standards that apply to other SEC auditing requirements will also apply to conflict minerals audits [12] Because of this statutory mandate, SEC will have little discretion to allow companies to issue self-generated statements or certifications to satisfy the law.

Third party audits for conflict minerals supply chain traceability began in summer 2010 under the Electronic Industry Citizenship Coalition (EICC), a US-based electronics manufacturing trade association.[30] Under this program, EICC selected three audit firms to conduct the actual audits, with two of the three participating in the pilot audits in 2010. After concluding the pilot, one of the two firms involved in 2010 withdrew from the program specifically in response to the SEC's proposal and to reduce potential legal risks to the audited entities.[31]

Neither the law nor the proposed regulations provide guidance on what will be considered an acceptable audit scope or process, preferring to allow companies the flexibility meeting the requirement in a manner that is responsive to their own individual business and supply chain.[32] At the same time, the law contains a provision that preserves the government's rights to deem any report, audit or other due diligence processes as being unreliable, and in such cases, the report shall not satisfy the requirements of the regulations,[33] further emphasizing the need for such audits to conform to established SEC auditing standards. Comments on the proposed regulation pointed out that, should SEC not specify an applicable audit standard, it cannot also be silent or ambiguous on the auditor standards as well, or the Commission will violate the plain language of the Law mandating "standards established by the Comptroller General of the United States".[34] It is generally expected that SEC will provide specificity on both the audit standard and the auditor standard. SEC's proposal attempted to clarify its position on auditor requirements.[35]

The Organization for Economic Cooperation and Development (OECD)[36] published its Guidance on conflict minerals supply chain traceability.[37] This guidance is gaining much momentum as "the" standard within US policy. However, a recent critical analysis of the standard in comparison to existing US auditing standards under SEC highlighted a number of significant inconsistencies and conflict with relevant US standards.[38] Companies subject to the US law who implement the OECD Guidance without regard for the SEC auditing standards may face legal compliance risks.

Reporting and disclosure

Companies subject to the SEC reporting requirement would be required to disclose whether the minerals used in their products originated in the DRC or adjoining countries (as defined above). The law mandates this reporting must be submitted/made available annually. Many comments to the proposed regulation asked SEC to clarify whether the report must be "furnished" - meaning it is made available to SEC but not directly incorporated within the company's formal financial report - or "submitted" - meaning the report is directly incorporated into the financial report.[34] At first glance, this may appear to be a minor point, however, this difference is very important in determining the audit/auditor standards and related liabilities.

If it is determined that none of the minerals originated in the DRC or adjoining countries, the report must include a statement to that effect and provide an explanation of the country of origin analysis that was used to arrive at the ultimate conclusion. On the other hand, if conflict minerals originating in the DRC or adjoining countries were used (or if it is not possible to determine the country of origin of the conflict minerals used), companies would be required to state as such in the annual report. In either case, companies would also be required to make this information public by posting their annual conflict minerals report on their websites, and providing the SEC with the internet addresses where the reports may be found. Further, the proposed regulations would require companies to maintain records relating to the country of origin of conflict minerals used in their products.

Criticism of the law

The law has been criticised by many for not addressing the root causes of the conflict, leaving to the Congolese government the responsibility for providing an environment in which companies can practice due diligence and legitimately purchase the minerals they need, when the reality is that mechanisms for transparency do not exist.[39] The effect has been to halt legitimate mining ventures that provided livelihoods for people, reducing the Congo's legal mineral exports by 90%[40].

Organizations and Activists Involved

There are a number of organizations and celebrities that are working to raise awareness of and find solutions for conflict minerals. Some of these include:

- The Enough Project[41]

- Raise Hope for Congo[42]


- Congo Siasa[44]

- ReliefWeb[45]

- Ashley Judd[46]

- Ryan Gosling[47]

Various industry and trade associations are also monitoring developments in conflict minerals laws and traceability frameworks. Some of these represent electronics, retailers, jewelry, mining, electronics components, and general manufacturing sectors. One organization - ITRI (a UK-based international non-profit organization representing the tin industry and sponsored/supported by its members, principally miners and smelters.[48]) had spearheaded efforts for the development and implementation of a "bag and tag" scheme at the mine as a key element of credible traceability.[49] However, the program and related efforts are not likely to extend beyond the pilot phase due to a variety of implementation and funding problems incurred.[50]

In late March 2011, the UK government launched an informational section on its Foreign & Commonwealth Office website dedicated to conflict minerals.[51] This information resource is intended to assist British companies in understanding the issues and, specifically, the US requirements.


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  2. ^ Dias, Elizabeth (July 24, 2009). "First Blood Diamonds, Now Blood Computers?". Time (Time Warner). Archived from the original on December 16, 2010. Retrieved December 16, 2010. 
  3. ^ Polgreen, Lydia (November 15, 2008). "Congo's Riches, Looted by Renegade Troops". The New York Times (The New York Times Company). Archived from the original on December 16, 2010. Retrieved December 16, 2010. 
  4. ^ Soguel, Dominique (June 1, 2009). "Rape Crisis in East Congo Tied to Mining Activity". Women's eNews. Archived from the original on December 16, 2010. Retrieved December 16, 2010. 
  5. ^ "Tantalum - Raw Materials and Processing". Tantalum-Niobium International Study Center. Archived from the original on December 16, 2010. Retrieved December 16, 2010. 
  6. ^ "Tin". Mineral Information Institute. Archived from the original on December 16, 2010. Retrieved December 16, 2010. 
  7. ^ Shedd, Kim B. (2000). "Tungsten" (PDF). United States Geological Survey. Archived from the original on December 16, 2010. Retrieved June 18, 2008. 
  8. ^ China Tungsten Online Tungsten alloy vibrator[dead link]
  9. ^ Litvinsky, Marina (July 21, 2009). "DR-CONGO: Firms Fuelling 'Conflict Minerals' Violence, Report Says". Inter Press Service. Archived from the original on December 16, 2010. Retrieved December 16, 2010. 
  10. ^ 75 Fed. Reg. 80948 – 80975
  11. ^
  12. ^ a b Section 1502(b).
  13. ^ "NEWS FLASH: SEC Delays Finalization of Conflict Minerals Regulations Until Second Half 2011 | Your EHS Connection". 2011-04-09. Retrieved 2011-11-18. 
  14. ^ "SEC Provides Preview of April 15 Final Rules on Conflict Minerals Supply Chain Traceability | Your EHS Connection". 2011-03-25. Retrieved 2011-11-18. 
  15. ^ "Comments on File No. s7-40-10". Retrieved 2011-11-18. 
  16. ^ Kavanagh, Michael J. (2011-04-01). "Apple, Intel-Backed Rules on Conflict Minerals Stall Exports". Bloomberg. Retrieved 2011-11-18. 
  17. ^ Hattam, Jennifer (2011-03-29). "As New Conflict Mineral Regulations Go Into Effect, Are Companies And Countries Ready?". TreeHugger. Retrieved 2011-11-18. 
  18. ^ "Can conflict minerals really be controlled?". BBC News. March 28, 2011. 
  19. ^ admin. "Loophole in Conflict Minerals Law Creates Opportunity for Scrap Dealers". Retrieved 2011-11-18. 
  20. ^ "Statement Concerning Implementation of Section 1502 of the Dodd-Frank Legislation Concerning Conflict Minerals Due Diligence". Retrieved 2011-11-18. 
  21. ^ 75 Fed. Reg 80966
  22. ^ admin. "Conflict Minerals Law, Supply Chain Due Diligence and Impact on Metal Buying Organizations – Part Three". Retrieved 2011-11-18. 
  23. ^ "Association Connecting Electronics Industries". IPC. Retrieved 2011-11-18. 
  24. ^
  25. ^ Sandler, Travis & Rosenberg, P.A., Client Advisory, "Retailers May Be Subject to Proposed SEC Conflict Mineral Reporting Requirements," Released December 23, 2010.
  26. ^ 75 Fed. Reg. 80953
  27. ^ For instance, some electronic components use chemical solutions containing gold at some point in the manufacturing processes. Tin is used during the chemical processes for manufacturing PVC and certain high performance paints/coatings.
  28. ^ 75 Fed. Reg. 80963
  29. ^ 75 Fed. Reg. 80956
  30. ^
  31. ^$13230
  32. ^ 75 Fed. Reg. 80957
  33. ^ Section 1502(b)
  34. ^ a b See numerous comments filed at
  35. ^ 75 Fed. Reg. 80958
  36. ^ "Organisation for Economic Co-operation and Development". 2011-11-03. doi:10.1787/factbook-2010-en.,3675,en_2649_201185_1_1_1_1_1,00.html. Retrieved 2011-11-18. 
  37. ^ "OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas".,3746,en_2649_34889_44307940_1_1_1_1,00.html. Retrieved 2011-11-18. 
  38. ^ "OECD to SEC: Make us the Conflict Minerals Due Diligence/Audit Standard for the US | Your EHS Connection". 2011-07-07. Retrieved 2011-11-18. 
  39. ^ "Digging Deeper Into the Dodd-Frank Congo ‘Blood Minerals’ Controversy". UN Dispatch. 9 Aug 2011. Retrieved 17 Oct 2011. 
  40. ^ "A Rule Aimed at Warlords Upends African Mines". Bloomberg Businessweek. 4 Aug 2011. Retrieved 17 Oct 2011. 
  41. ^ "Special Coverage on Conflict Minerals | Enough". Retrieved 2011-11-18. 
  42. ^ "Conflict Minerals". RAISE Hope for Congo. Retrieved 2011-11-18. 
  43. ^ "The Truth Underlying the Systemic Looting of Congo". Conflict Minerals. Retrieved 2011-11-18. 
  44. ^ "Congo Siasa". Retrieved 2011-11-18. 
  45. ^ "Certifying Congo's Deadly Conflict Minerals | ReliefWeb". 2011-02-01. Retrieved 2011-11-18. 
  46. ^ "Ashley Judd confronts Africa's deadly mineral issue". CNN. September 8, 2010. 
  47. ^
  48. ^
  49. ^ An overview and timeline of ITRI's activities on conflict minerals can be seen here -
  50. ^
  51. ^

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