Here is a good article explaining the reality of conflict minerals from last week:
Date: 03/23/2012 07:30 AM
Subject: Conflict minerals
WASHINGTON — An iPhone can do a lot of things. But can it arm Congolese
rebels?
Daniel Rosenbaum for The New York Times
Rick Goss of the Information Technology Industry Council says eliminating
one revenue stream would not stop such conflicts.
\That is the question being debated by a battalion of lobbyists from
electronics makers, mining companies and international aid organizations
that has descended on the Securities and Exchange Commission in recent
months seeking to influence the drafting of a Dodd-Frank regulation that
has nothing to do with the financial crisis.
Tacked onto the end of that encyclopedic digest of financial reform is an
odd provision. It requires publicly traded companies whose products use
certain minerals commonly mined in strife-torn areas of Central Africa to
report to shareholders and the S.E.C. whether their mineral supply comes
from the Democratic Republic of Congo.
The measure is aimed at cutting off the brutal militia groups that have
often taken over the mining and sale of so-called conflict minerals to
finance their military aims. Just about every company affected by the law
says they support it, but many business groups have also been pushing
aggressively to put wiggle room in the restrictions, calling for lengthy
phase-in periods, exemptions for minimal use of the minerals and loose
definitions of what types of uses are covered.
Nearly every consumer product that includes electronic parts uses a
derivative of one of the four minerals: columbite-tantalite, which when
refined is used in palm-size cellphones and giant turbines; cassiterite, an
important source of the tin used in coffee cans and circuit boards;
wolframite, used to produce tungsten for light bulbs and machine tools; and
gold, commonly used as an electronic conductor (and, of course, jewelry).
Given their broad application, the minerals have been a primary target of
humanitarian groups concerned about genocide, sexual violence, child
soldiers and other issues that have been common outgrowths of conflicts in
Central Africa.
“We don’t think you need to have people being killed in order to have these
metals in our cellphones,” said Corinna Gilfillan, who heads the United
States office of Global Witness, which has worked on the issue for several
years.
But manufacturers question the effectiveness — not to mention the
practicality and expense — of tracing every scrap of refined metal back to
its original hole in the ground.
“The challenge is that conflict minerals are a symptom,” said Rick Goss,
vice president for environment and sustainability at the Information
Technology Industry Council, a trade group. “The entrenched powers in these
countries have plenty of other means to raise money. Simply cutting off one
source of revenue to a warlord or military rulers is not going to stop the
genocide.”
The Dodd-Frank law on conflict minerals is already having an effect in
Eastern Congo, damping or halting production at many mines even before the
disclosure regulations for companies are in place.
“It is causing, I would say, a sort of embargo on traders and diggers in
Eastern Congo,” Serge Tshamala, an official at the Embassy of the
Democratic Republic of Congo. “The longer it takes the S.E.C. to come up
with guidelines, the worse it is for our people.” Mr. Tshamala and other
Congo government officials met with the agency’s staff members in June,
urging them to speed completion of the regulations.
The agency is moving slowly, however. The Dodd-Frank law set an April 2011
deadline for completion of the rules. After proposing regulations in
December 2010, the agency took comments for 30 days, and received so many
suggestions that it extended the period by a month.
After missing the April deadline, the agency in October conducted a
roundtable for its commissioners to hear directly from manufacturers,
mining companies, advocacy groups and institutional investors. This month,
Mary L. Schapiro, the agency’s chairwoman, said the agency hoped to
complete the process “in the next couple of months.”
The commission already has decided to include a phase-in period to allow
companies time to build networks to trace their mineral supply. But an
exemption for use of trace amounts of the metals is unlikely, Ms. Shapiro
said.
As Bennett Freeman, a senior vice president for sustainability research and
policy at Calvert Investments put it during the roundtable last year, a
very small amount of gold is used as a conductor in a cellphone, “but when
one takes into account the fact that there were 1.6 billion cellphones sold
globally last year, that adds up to be a very significant volume of that
particular metal.”
(Page 2 of 2)
Still undecided — and the subject of more than 100 meetings between
lobbyists and S.E.C. officials since the rule was proposed — is just how
the commission will decide who is covered by the conflict minerals
requirement. The law says that the minerals must be “necessary to the
functionality or production of a product manufactured by” a company.
Simple as it seems, that definition gives rise to a tangle of questions. Is
mining “manufacturing”? Is a coffee can made with tin “necessary to the
functionality” of the coffee being sold?
The hair-splitting answers to those questions will be the basis on which
the law could be challenged in court, and it is that prospect that accounts
for much of the agency’s deliberate progress in fashioning the rules.
Administrative law requires an agency like the S.E.C. to conduct a
cost-benefit analysis of rules. Last year, a federal appeals court cited
insufficient cost-benefit research in striking down one of the agency’s new
regulations, and S.E.C. insiders say that decision has the agency operating
in perpetual fear of a repeat occurrence.
There is little agreement on what it will cost companies to comply. The
agency estimates companies will have to spend $71 million to comply with
its regulations. The National Association of Manufacturers estimates the
regulations will cost $9 billion to $16 billion.
Whatever the answer, part of the burden would fall on a given company’s
supply chain — companies, that is, that are very likely not to be covered
by the regulation’s reporting requirements, which cover only publicly
traded companies.
Irma Villarreal, chief securities counsel for Kraft Foods, said during the
S.E.C. roundtable that Kraft produced 40,000 distinct products and used
100,000 suppliers, creating a Herculean task of auditing supply chains for
conflict minerals.
Nonprofit groups that support the new regulation say a growing number of
companies — Intel, Motorola and Hewlett-Packard among them, according to
the Enough Project, a nongovernmental organization that works against
genocide and crimes against humanity — have already made significant steps
to inspect and adjust their supply lines to avoid tainted sources of
conflict minerals.
“Our hope,” said Darren Fenwick, a senior manager of government affairs for
the Enough Project, “is that the rule is strong enough that companies in
industries that aren’t doing anything will start to feel the pressure in
their supply chains.”
-----Original Message-----
From: Dennis Fritz <[log in to unmask]>
To: TechNet <[log in to unmask]>
Sent: Thu, Mar 29, 2012 4:41 pm
Subject: Re: [TN] Conflict Minerals
I see the Conflict Minerals topic has generated a lot of response. Some is
peculation and some is true. Here is what I know:
Legislation demanding that US based public companies report to the Securities
nd Exchange Commission where the source of their tin, tantalum, tungsten and
old come from. That is, not from rebel mines in the Democratic Republic of the
ongo. I didn't think the reporting structure was in place yet from the SEC
what WORSE Federal Government department to compile this listing?). The
egislation was an ammendment to the Dodd Frank Wall Street Reform Act of 2010.
had understood that the SEC was still setting the reporting structure, but
hat is no reason companies cannot request the supply chain information right
ow.
IPC is heavily involved in the supply chain documentation for tin metal. Only
ike 10% of the tin comes from Africa, but the source of all solder is going to
ventually have to be reported!! International Tin Research Institute (the same
TRI that helped push through Pb-free) is working also to help certify mines as
on-conflict sources of new tin metal. Imagine the problem in certifying solder
hat is recycled or reclaimed!!!
Tantalum capacitors, particularly in cell phones, have been the target of many
green"organizations - who promote the idea that cell phones help fund the war
n Africa. Here is a site from Kemet (if it will open for you) that explains
heir process to get conflict-free tantalum:
http://mail.aol.com/35834-111/aol-6/en-us/suite.aspx
Also, I see that AVX is now shipping certified conflict-free tantalum
apacitors.
Finally, imagine the problem certifying that gold is conflict-free. I
nderstand the gold supply chain is in a total uproar, led by the jewelry
usiness. Imagine how many places gold is used in electronics!!
Hope this helps
Denny Fritz.
-----Original Message-----
rom: Blair Hogg <[log in to unmask]>
o: TechNet <[log in to unmask]>
ent: Thu, Mar 29, 2012 8:44 am
ubject: [TN] Conflict Minerals
e have been receiving requests from customers for statements thta our products
not have any content of minerals from conflict areas, e.g. Congo. Anyone else
tting these? How are you handling them?
he point behind this is apparently to avoid providing funding of aggressors
rough the purchase of minerals from areas in conflict. A quick glance at this
kes it look even worse than RoHS, now it is not simply the materials in the
mponents, but from where they originate.
lair
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