Study Finds Law has Limited Use of Conflict Minerals

Section 1502 of the US Dodd-Frank Act and initiatives by technology firms have helped limit the use o
f ‘conflict minerals’ from Africa
for consumer electronics, according to a report by the Enough Project.

The activist group said that armed groups responsible for atrocities in the Democratic Republic of Congo (DCR) and neighbouring regions have now ceded control of two-thirds of mines in the region producing tantalum, tin, tungsten and gold, dubbed 3T+G minerals.

“Our research found that electronics companies are expanding their responsible minerals sourcing from Congo, and Congolese miners are now able to earn 40% more from those mines,” said Sasha Lezhnev of the Enough Project. Formerly controlled by warlords, they “are now part of peaceful supply chains”.

The report finds that as a result of these efforts it is “much less economically viable for armed groups and Congo’s army” to profit from these minerals. However, the researchers add that further efforts are needed “to address conflict gold and close loopholes on the other minerals” which can be used by armed factions.

The report’s authors credit market changes spurred by the reporting requirements imposed by section 1502 of the Dodd-Frank Act, which requires many US companies to audit and report the use of conflict minerals. According to Enough Project, these minerals previously generated an estimated US$185m annually for armed groups and the army.

They added that Dodd-Frank and electronics industry audits have created a ‘two-tier market’ for the 3T minerals, which means that minerals that do not go through conflict-free programmes now sell for 30% to 60% less.

“As businesses begin to comply with Dodd-Frank, they are requiring suppliers to conduct conflict-free audits and trace the sources of their minerals much more carefully,” the report states. “This has shrunk markets for untraceable conflict minerals. Minerals that are not from verified conflict-free 3T mines sell for less than conflict-free minerals.”

The authors note that Apple has certified its supply of tantalum – a key mineral for mobile electronics – as conflict-free and that Intel “is producing the world’s first fully conflict-free product that contains clean Congolese minerals.”

A small group of companies such as Intel, Hewlett-Packard, Apple, and around a dozen others led industry efforts before the passage of the law, setting up auditing systems to weed out conflict minerals from their supply chains. However, Dodd-Frank helped hundreds of others reduce or eliminate the use of conflict minerals.

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