Conflict Minerals: Why Are They Regulated?
What are Conflict Minerals? According to the Conflict Mineral Statutory Provision, conflict minerals are: • Cassiterite • Columbite tantalite • Gold • Wolframite • Any other minerals or their derivatives that are being used to fund conflict in the Democratic Republic of Congo (the DRC) and its neighbors (known together in the Dodd Frank Act as covered countries The Dodd-Frank Act lists the following as covered countries: • Democratic Republic of the Congo (DRC) • Central Africa Republic • South Sudan • Zambia • Angola • The Republic of the Congo • Tanzania • Burundi • Rwanda • Uganda
Conflict Minerals - Uses • These minerals and their derivatives are used for the following purposes: Mineral Cassiterite
Columbite tantalite
Gold Wolframite
Purpose/Use Metal ore that is most commonly used to produce tin, which is used in alloys, tin plating, and solders for joining pipes and electronic circuits Metal ore from which tantalum is extracted. Tantalum is used in electronic components, including mobile telephones, computers, videogame consoles, and digital cameras, and as an alloy for making carbide tools and jet engine components Used for making jewelry and is used in electronic, communications, and aerospace equipment Metal ore that is used to produce tungsten, which is used for metal wires, electrodes, and contacts in lighting, electronic, electrical, heating, and welding applications
• Tin, tantalum, tungsten and gold are together known as 3TG.
Why are Conflict Minerals Being Regulated? • Companies mining conflict minerals in countries such as the DRC may knowingly or unknowingly be contributing to the conflicts and human rights abuses being committed in these regions. • To prevent this, the Dodd-Frank Act enacted into law in 2010, contains provisions relating to the disclosure and verification of conflict minerals. • In 2012, the SEC approved its final rule concerning in conflict minerals. • The Organization for Economic Cooperation and Development (OECD) also issued its conflict minerals guidance in 2011.
The SEC Conflict Mineral Rule Applicability: – Applies to a company that uses minerals including tantalum, tin, gold or tungsten if: – The company files reports with the SEC under the Exchange Act. – The minerals are necessary to the functionality or production of a product manufactured or contracted to be manufactured by the company.
– The requirements apply to both foreign and domestic issuers. – Companies that use only trace amounts of these conflict minerals have to comply with this rule.
Want to learn more about SEC Conflict Mineral Rule, its requirements and best practices to comply with them? ComplianceOnline webinars and seminars are a great training resource. Check out the following links:
• Conflict Minerals Program - Responsible Sourcing a Act
• Understanding SEC Conflict Minerals Disclosure Re
• Conflict Minerals 2014: Looking Back and Looking