Conflict Minerals

One year ago today, the SEC released its draft rules requiring public companies to report whether or not their products were manufactured using “conflict minerals” — materials mined in the Democratic Republic of Congo (DRC) or surrounding countries that were being sold to finance lawless militias and violence in the region. The minerals covered are — tin, tungsten, tantalum (the “3Ts”), and gold.
This is a case of establishing a chain of custody all the way from a specific mine to a smartphone I might be using to update a blog. That’s a huge undertaking, and perhaps in deference to that, the SEC has not rushed the rulemaking. Final rules are expected sometime next year, but no deadline has been set.
While the final rules may not yet be clear — what is certain is that they are coming. There is considerable discussion of their final cost to companies and consumers, but the benefits seem to lining up already.  A letter from a UN agency monitoring the violence in Africa told the SEC that “private sector purchasing power and due diligence implementation is reducing conflict financing, promoting good governance in the DRC mining sector, and preserving access to international markets for impoverished artisanal miners.” In other words, even before they are implemented, the rules appear to be working.
And if chain of custody disclosures are working for 3T+G, there is no reason to think they will stop there. Are you ready?


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