What Do You Know About Conflict Minerals?

There are multiple conflict minerals regulations enforced globally. How much do you know about them?

What Do You Know About Conflict Minerals?

What Are Conflict Minerals?

Conflict minerals are minerals mined in politically unstable areas whose production and sale often fuel armed conflict and human rights abuses in the region. Conflict minerals contribute to a variety of crimes including money laundering, corruption, forced labor, rape, and murder. 

Which Minerals Are Considered “Conflict Minerals?”

As of 2024, the European Union and United States recognize four conflict minerals: tin, tantalum, tungsten, and gold. The Securities and Exchange Commission (SEC) in the United States defines conflict minerals similarly: “columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives, which are limited to tantalum, tin, and tungsten (3TG), and any other mineral or its derivatives determined by the U.S. Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country (Covered Countries).”

Conflict minerals are often referred to as 3TG for short. 

Why Only Four Minerals?

According to the European Commission, “(tin, tantalum, tungsten, and gold) are the four minerals that are most often linked to armed conflicts and related human rights abuses…” 

Where Are Conflict Minerals Mined?

Conflict minerals are mined from a wide variety of places around the world. For example, Tungsten is typically mined in China, Vietnam, Russia, Bolivia, and Rwanda, while Tin is mined primarily in Malaysia, Indonesia, and Thailand. 

Even if a mineral is produced in a conflict-free region, it is still considered a “conflict mineral.” According to the Responsible Minerals Initiative, “for example, tin extracted in Canada, Russia, or Argentina is considered a conflict mineral by definition. In the SEC rule, “DRC conflict-free” is defined as minerals that were extracted and did not directly or indirectly benefit armed groups in the covered countries. Therefore, tin extracted from Canada is considered “DRC conflict-free” under the definitions of the SEC rule.”

Take note of this acronym, CAHRA, which means “conflict-affected and high-risk areas.”

CAHRAs are regions in the world with natural resources that contain minerals in great demand, whether locally, regionally, or globally. Typically these regions also experience armed conflict, such as civil war, or have just finished a war and are in a post-conflict state that leaves them vulnerable to corruption. Additionally, these regions may see poor or non-existent governance that allows human rights violations and other violations of international law.

An extensive, non-exhaustive list of CAHRAs can be found here.

Where Are Conflict Minerals Used?

Conflict minerals are used in a variety of consumer goods, including mobile phones, cars, and jewelry. For example, iPhones contain about 0.034 g of gold and trace elements of tantalum in its capacitors (and it has 300-400 of those). 

They can also be found in cars: tantalum shows up in tantalum capacitors used in engine management systems and driver monitoring systems, while tin is used in various parts including the suspension system, strut rods, joints, and more. 

Whether it’s the latest iPhone, the new EV vehicle you drive, or even the nice speakers you use to play your favorite music at home, conflict minerals can be found in many modern electronics. 

What Regulations Exist Around Conflict Minerals?

EU Conflict Minerals Regulation

In January 2021, the Conflict Minerals Regulation entered into force in the European Union. According to the European Commission, the law is designed to “ensure sustainable sourcing for 95 percent of all EU imports of tin, tantalum, tungsten, and gold.”

The Conflict Minerals Regulation will apply to EU-based importers who import any of the 3TG materials in the following forms:

  • Mineral ores
  • Concentrates
  • Processed metals

At the time of its passing, it’s estimated between “600 and 1,000 EU importers” will be affected and “500 smelters” indirectly affected as a result. 

EU importers are required to identify the smelters and refiners within their supply chains and must check that said smelters and refiners comply with the EU’s conflict mineral policies. If an EU importer finds a smelter or refiner does not comply with the regulations in place, then the importer will manage and report the issue.

A ‘white list’ is being created by the EU that features a compiled list of smelters and refiners that source their minerals responsibly.

To conduct proper due diligence in ensuring conflict minerals stay out of their supply chains, EU importers must responsibly do the following, according to the EU website:

  • establish strong company management systems;
  • identify and assess risk in the supply chain;
  • design and implement a strategy to respond to identified risks;
  • carry out an independent third-party audit of supply chain due diligence; and
  • report annually on supply chain due diligence.

Not all companies currently conduct due diligence on conflict minerals, but the EU’s new regulation will help more companies remove conflict minerals from their supply chains in the years to come.

Dodd-Frank Wall Street Reform and Consumer Protection Act Section 1502

Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which passed in 2010, places rules around the usage of conflict minerals in the United States. Like the EU regulation, Section 1502 aims to tackle the production and sale of conflict minerals by armed groups to commit human rights abuses in conflict-heavy regions. 

According to the SEC, any company that:

  • Files and reports with the SEC under the Exchange Act
  • Shows the minerals are “necessary to the functionality and production” of a product manufactured or contracted to be manufactured by the company

must disclose the use of conflict minerals to the SEC. 

When a company does use designated minerals, they are required by the Dodd-Frank Act to conduct an inquiry into the “country of origin.” If the inquiry finds no evidence of minerals being sourced from a country of conflict, then a brief description along with the report must be submitted.

If a covered country of conflict is determined in the report, then the company must undertake “due diligence” to ensure the minerals were safely and responsibly sourced from said country.

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