Conflict minerals - CMRT

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3TG Minerals

Conflict Minerals

The US Dodd Frank regulation rules conflict minerals declarations of 3TG minerals (Tin, Tantalum Tungsten and Gold) originated from some mines in the Democratic Republic of the Congo (DRC).

 

For reporting purposes and responsible mineral sourcing, Enviropass maintains a database of more than 2 500 of the most popular suppliers which fill in Conflict Minerals Reporting Templates (CMRT).

Conflict Minerals - Classic Services


Enviropass :

  • Prepares your own CMRT statement based on information previously collected and accordingly with the Responsible Minerals Initiative (RMI).

Conflict Minerals - Deluxe Services

Through its Deluxe services, Enviropass empowers you to control your Conflict Minerals file by:

  • Training you to the legal requirements.
  • Setting with you an internal procedure that will enable showing due diligence to third parties.
  • Teaching you the qualitative assessment of information gathered from suppliers.
  • Equipping you to generate and update your annual declaration regarding Conflict Minerals.

What are Conflict Minerals?

3TGs in DRC

Conflict Minerals Slavery from the Mine to the Smelter

Conflict minerals are tin (Sn), tantalum (Ta), tungsten (W), and gold (Au). The literature commonly uses this acronym to identify these minerals: 3TGs. The 3TGs conflict minerals originate from areas of conflict, such as in the Democratic Republic of the Congo (DRC) or its neighboring countries (Angola, Burundi, Central African Republic, Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, and Zambia). 

 

More specifically, mines in the provinces of Kivu, in Eastern DRC, have a high risk of being under terrorist control.

3TG Tin

The Use of 3TGs

Tin: Many applications require this mineral, like solder.

Tantalum: electronic components, like capacitors, contain tantalum.

Tungsten, or wolfram, is also utilized in electronics, electrical equipment, and alloys.

Gold is another mineral employed in electronics, in circuit boards, for example. Gold is also present in but also jewelry, money, medicine, and... cuisine!

Potential Conflict-Minerals

Currently, the in-force legislation only addresses the origin of 3TGs. However, other minerals raise similar conflict concerns, such as cobalt or mica. And electrical and electronic equipment requires both cobalt and mica.

Cobalt is massively used in batteries, while mica is present in a wide range of products and applications, such as plastics, insulations, capacitors, magnets, and paints.


What about Rare Earth Elements?

Periodic Table rare earth elements

Rare earth elements (REEs) are mainly the fifteen lanthanides in the periodic table. Many strategic activities require  REEs, including in the electronics, automotive, aerospace, and military industries.

 

China benefits from a quasi-monopoly of some REEs. On top of bringing strategic and political concerns, the extraction of REEs also reveals one the most polluting. As of today, no specific legislation about the REEs' origins is in place.


What are the Conflict Minerals Reporting Obligations?

SEC Securities and Exchange Commission

Since March 31st, 2014, a company listed on Wall Street must annually declare the origin of these minerals when used in its production and per the SEC (Securities and Exchange Commission).

 

Among other things, in-scope companies must declare whether:

  • their products contain any of the 3TGs;
  • they have established a responsible minerals sourcing policy;
  • all of the smelters in the supply chain have provided sourcing information.
CMRT Declarations

The CMRT

CMRT is an acronym for Conflict Minerals Reporting Template.

What is the CMRT?

The CMRT is a free online Excel spreadsheet. It enables communication for the origin of 3TGs in the supply chain. The industry worldwide utilizes this well-recognized template.

The CMRT Content

The most important tabs in the Excel CMRT include:


  • The Declaration tab, where the examined company gives its credentials and conflict minerals details;
  • The Smelter List tab, where the surveyed company reports the smelters in its supply chain;
  • The Checker tab that shows whether some information is missing;
  • The Product List, with the reference of in-scope products, if applicable.

The CMRT document is regularly updated. Errors are corrected, and most importantly, the list of Smelter is updated. As a result, we recommend you to make sure you request the latest CMRT versions from your suppliers.

Responsible Minerals Initiative

The RMI behind the CMRT

The Responsible Minerals Initiative (RMI) is an independent not-for-profit organization that equips the industry with resources and tools for conflict-free sourcing.

What the RMI does

On top of maintaining the CMRT and other activities to bring awareness, the RMI manage auditing programs of smelters. 

To do so, auditors follow guidelines and protocols to determine whether Smelters and refiners only purchase conflict-free minerals.


Conflict Minerals Ore
CMRT Electronics

Who should File CMRTs?

Impacted companies are any actors extracting or using 3TGs in the production processes, from the mines to the manufacturers of finished goods. They include:

 

  • local and international traders of ore;
  • smelters and refiners;
  • components producers;
  • assemblers.

 

The laws of the conflict mineral affect manufacturers of electronic products because they almost always contain at least one 3TG.

No de minimis minimum threshold can exempt from the reporting obligation.

Directly Impacted Companies

If your organization is one of the approximately 6 000 public US companies governed by the rules of the SEC or if you are a supplier such company, you may be audited and receive a CMRT inquiry. All sectors are in-scope, including the medical or the defense industries.

Contributors to CMRT Inquiries

Even if you don't deal directly with a US public company, you may be somewhere in its supply chain. If this is the case, then you would still have to report the origin of the 3TGs contained in your products and contribute to the research effort for commercial reasons.


Why are there Conflict Minerals Regulations?

The Situation around Conflict Minerals in the DRC

The Democratic Republic of the Congo (DRC) is a former Belgian colony and was a possession of King Leopold II of Belgium from 1885 (with the Berlin Conference) until 1908.

 

The DRC became independent on June 30th, 1960. The Congo was called Zaire from 1971 to 1997 until the overthrow of Marshal Mobutu during the so-called First Congo War. A rebel coalition, the AFDL (Alliance des forces démocratiques pour la libération du Congo - Alliance of Democratic Forces for the Liberation of Congo) led by Laurent-Désiré Kabila overthrew Mobutu.

 

A Second Congo War followed from 1998 to 2002. During this war, rebel groups took control of parts of the country and killed Laurent-Désiré Kabila. Then his son, Joseph Kabila, took power.

As of 2003, a democratic transition has begun. A new constitution was voted in 2005. Joseph Kabila was re-elected in 2011. However, after a political crisis and a surge in violence, Félix Tshisekedi is elected president in 2018. The east of the country remains troubled by armed gangs, dissidents, and deserters.

 

Approximately 8 million people have been killed since 1994. Millions have been displaced. Rebels have been responsible for a form of genocide and planned rapes. Rebels have exploited child soldiers and orphans in massive human trafficking operations. 

 

Among other things, many of these modern slaves have been working in mines under the control of rebels.

DRC flag conflict minerals
Slavery DRC

Democratic Republic of Congo - Child Trafficking
OECD
Conflict Minerals Auditor
Gold - Conflict mineral

The History of Conflict Minerals Regulations

The USA officially decided in July 2010 to target the revenue coming from mines under the control of rebel groups. Such mines have then seen their market access obstructed.

Conflict Minerals Regulations started in the USA during the Obama administration, and the following governments maintained the effort. 

The European Union has also taken a similar initiative by publishing its conflict minerals regulation in 2017.

The Conflict Minerals Regulations and the OECD Guidance

The US federal law named the Dodd-Frank Act gives the rules on Conflict Minerals, in section 1502. The decision started to apply in August 2012. Mr. Dodd and Frank are the two officials who have presented this regulation to Congress.

 

The  EU has prepared a similar conflict minerals bill, which enters into force on January 1st, 2021. Canada has rejected a comparable bill, number C-486.

 

Nevertheless, since 2011, the Organisation for Economic Co-operation and Development (OECD) has been updating the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. This guidance is not legally binding. However, its recommendations help to reduce risks with conflict minerals in supply chains.

The Goal of Conflict Minerals Reporting and the Audit Approach

The objective of the conflict minerals legislation is to cut off the rebels' financial resources. The idea here is to find an alternative to military intervention. This is not an embargo against DRC or its neighboring countries.

 

Smelters and refiners that purchase 3TGs ore all over the world play a crucial role in the supply chain. Indeed, smelters and refiners either purchase recycled metals or new ore from mines. Therefore, auditors regularly assess these smelters and refiners to find out whether they can demonstrate that they only purchase conflict-free minerals.

The Cost of the Conflict Minerals Reporting Obligations

A study of 2017 by Elm Sustainability Partners estimated at 600 to 800 million USD the total annual cost for the industry to fulfill the Dodd-Frank Act conflict minerals reporting obligations.

Towards Conflict-Free Minerals?

Studies show that the number of conflict-free smelters and refiners has significantly increased over the years, which is a positive signal. However, armed groups are still active and find alternative ways of getting founds.


Questions on Conflict Minerals? Contact Enviropass!

Enviropass Expertise Inc.

Suite 211 - 1750 St-Louis

Montreal, H4L 5N4, Quebec, Canada

Tel: +1 (514) 887-7871