The Number One Software for Conflict Minerals Compliance & Reporting

What are conflict minerals and the 3TGs?

Conflict Minerals refer to raw materials or minerals that come from a particular part of the world where conflict is occurring and affects the mining and trade of those materials and resources.

The so called 3TGs are tin, tantalum, tungsten and gold which are mined in eastern Congo (DRC) or adjoining countries.

3TGs are essential to the production of a wide range of devices, including consumer electronics such as smartphones, tablets and computers, as well as in products from the jewelry, automotive, aerospace, medical equipment and many other product groups and industries:

• Cassiterite is the main ore for the extraction of tin, which is essential for the production of tin cans and for the solder on the circuit boards of electronic devices.
   
• Coltan is the metal ore from which the element tantalum is extracted.Tantalum is mainly used for the production of tantalum capacitors (GPS, anti-lock braking systems, laptops, etc.).
   
• Wolframite is an important source of the element tungsten. It is widely used, for example, for fishing weights, dart tips and golf club heads.
   
• Gold is used for jewelry, electronics and dental products, among others
   

Central problem of conflict minerals?

In a resource-rich country without sufficient state control, armed groups create a financial basis for themselves by exporting raw materials.

Their systematic exploitation can lead to serious human rights violations, violations of international humanitarian law or the realization of international criminal law.

A major difficulty is obtaining the necessary information on conflict commodities in supply chains, components, and products to effectively prevent their trafficking.

How do conflict minerals affect companies?

Companies that are publicly traded in the USA (called „issuers“ under the law) need to disclose whether or not 3TGs that are necessary to the functionality or production of a product they manufacture originated in the Democratic Republic of the Congo. If they did, they must submit a report to the Securities and Exchange Commission (including due diligence specification and an independent third party audit).

Reporting requirements are passed down the supply chain
Companies not publicly traded in the USA are not directly affected by the Dodd-Frank Act, which means they are not legally required to proactively deal with conflict minerals reporting. However, any company which is a supplier of publicly traded US companies will be indirectly affected, because the reporting requirements are passed down the supply chain. This means that requests from customer companies need to be dealt with.

Legislative regulations in the US

In 2010, Congress passed the Dodd-Frank Act, which directs the Commission to issue rules requiring certain companies to disclose their use of conflict minerals if those minerals are “necessary to the functionality or production of a product” manufactured by those companies. Under the Act, those minerals include tantalum, tin, gold or tungsten.

Congress enacted Section 1502 of the Act because of concerns that the exploitation and trade of 3TGs by armed groups is helping to finance conflict in the DRC region and is contributing to an emergency humanitarian crisis. Section 1502 of the Act amends the Securities and Exchange Act of 1934 to add Section 13(p).

The final rule 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 final rule requires a company to provide the disclosure on a new form to be filed with the SEC (Form SD). To learn more, please visit information in the links below:
 

• Final Ruling
• Conflict Minerals Fact Sheet
• Conflict Minerals FAQ

What is Cobalt?

Cobalt was first used for heat-resistant paints and pigments, e.g. for painting porcelain and ceramics. Today, cobalt is used as an alloying component to increase the high-temperature strength of alloyed and high-alloy steels, as a binder phase in hard metals and diamond tools.

Cobalt steels are used, for example, for highly stressed components that have to withstand high temperatures, such as valve seat inserts in internal combustion engines. Cobalt-based superalloys have historically consumed most of the cobalt produced. The temperature stability of these alloys makes them suitable for gas turbine blades and aircraft engines.

Furthermore, cobalt is used in lithium-ion batteries, which are an essential component of electric cars, among other things. It can therefore be assumed that demand for cobalt will increase significantly in the coming years.

Central problem of Cobalt production?

As with many other ores, mining is partly carried out under precarious conditions. Several reports have raised concerns about the social and environmental impacts of cobalt mining, including child labor, modern slavery unsafe working conditions.

It is estimated that in Congo, where a good half of the world's cobalt is mined, around 20% of the cobalt is mined by hand.
 

What is Mica?

Mica is a group of minerals commonly used in a variety of industries due to its excellent insulation properties, flexibility, and resistance to heat. It is widely used in electrical and electronic equipment as an insulator and dielectric material, in the automotive and aerospace industries for thermal management, and in cosmetics for its shimmering properties.

In the construction industry, mica is used in paints, coatings, and joint compounds to improve durability and provide a glittery appearance. It is also utilized in plastics and rubber as a filler and reinforcement material, enhancing the mechanical properties of these products.

Mica's versatility and wide range of applications ensure its continued demand across various sectors, making it a critical mineral in modern manufacturing and technology.
 

Central Problem of Mica Production?

Mica mining often occurs under challenging and hazardous conditions, particularly in regions with limited regulatory oversight. Reports have highlighted significant social and environmental issues associated with mica production, including child labor, exploitation, and unsafe working conditions.

In countries like India and Madagascar, where much of the world's mica is sourced, a substantial portion of the mining is done by hand, involving entire families, including children. This informal and unregulated sector is prone to human rights abuses and environmental degradation, raising serious ethical and sustainability concerns.

Is Cobalt reporting mandatory for companies?

Cobalt reporting is currently not required by any international legislation or regulation. According to the definition provided in the SEC Final Ruling (US Securities and Exchange Commission, 2012), as it relates to Section 1502 of the Dodd-Frank Wall Street  Reform and Consumer Protection Act of 2010 (US Congress, 2010), Cobalt is NOT a conflict mineral.

Why is voluntary cobalt reporting important for companies?
Companies need to keep pace with the market expectations of customers, investors and non-governmental organizations. Furthermore, companies can thus highlight their corporate responsibility.

What is the The RMI Reporting Framework?

The RMI Reporting Framework is a standardized set of guidelines and metrics developed by the Responsible Minerals Initiative to help companies report on their responsible sourcing practices for minerals. Additionally, the RMI provides specific reporting templates to streamline and standardize the reporting process.

Conflict Minerals Reporting Template (CMRT)

The Conflict Minerals Reporting Template (CMRT) is a standardized reporting tool developed to facilitate the disclosure and communication of information regarding mineral sourcing in compliance with regulatory requirements. Companies use the CMRT to report on the origin and supply chain of conflict minerals, ensuring transparency and responsible sourcing practices. The template guides users through a series of questions and data fields, helping them collect and report detailed information about the smelters and refiners in their supply chain. By using the CMRT, companies can effectively communicate their due diligence efforts to customers and stakeholders.

> To the Conflict Minerals Reporting Template
 

Extended Minerals Reporting Template (EMRT)

For Cobalt and Mica reporting, you can use the Extended Minerals Reporting Template (EMRT). The EMRT helps you collecting information about the country of origin and the smelters and refiners used.

For your cobalt reporting, you need to examine the supply chain in terms of smelter and refiner usage. To do this, you will need to communicate your company's requirements to your suppliers and collect data using the EMRT. Once the data is collected, you need to analyze it to determine the risk level of the smelters and refiners used in your supply chain.

> To the Extended Minerals Reporting Template

Additional Minerals Reporting Template

For reporting on additional minerals, you can use the Additional Minerals Reporting Template (AMRT). The AMRT helps you gather information about the country of origin and the smelters and refiners used in your supply chain for minerals beyond 3TG, such as lithium, nickel, rare earth elements, and other critical raw materials.

To ensure responsible sourcing, you need to assess the supply chain for these minerals by identifying the smelters and refiners involved. This requires communicating your company’s compliance requirements to suppliers and collecting data using the AMRT. Once the data is gathered, it must be analyzed to assess potential supply chain risks and ensure compliance with regulatory and industry standards.

> To the Additional Minerals Reporting Template

Our software iPoint Conflict Minerals helps you manage these individual steps in a central application along with your Conflict Minerals reporting.

To get more background information about the situation in the Congo, please visit:

• www.enoughproject.org

For more information on Cobalt due diligence and reporting, click here:

• www.responsiblemineralsinitiative.org
• www.oecd.org