More than a third of US firms not ready for conflict minerals rules
With only about a year remaining until publicly-traded US component manufacturers are forced by law to disclose their usage of conflict minerals to the federal government, more than a third are absolutely unprepared, says information and analytics provider IHS (NYSE: IHS).
According to a poll conducted last week during the IHS webinar “The Clock’s Ticking: How to Comply with the New Conflict Minerals Regulations,” more than 35% of respondents—a plurality of the attendees—said they have made no plans on how to conform with the rules.
A mere 7.5% said they were well prepared to comply with the set of regulations, which will start to go into effect in May 2014.
Conflict minerals are defined as those mined in locations of armed conflict and human rights abuses. They —mainly tin, tantalum, tungsten and gold—are used in a wide range of components across the electronics supply chain.
A major supplier of such minerals is the war-torn Democratic Republic of the Congo (DRC), which holds reserves of such elements worth about $24 trillion.
IHS estimates that $0.15 worth of tantalum was contained in every smartphone shipped when the SEC Dodd-Frank Wall Street Reform and Consumer Protection Act on conflict materials was first signed in 2010. As per last year, this would amount to $93 million worth of tantalum in smartphones.
The SEC rules took effect in August 2012, with initial reporting required by May next year.
Even if a company does not use conflict minerals in its products, the regulation forces it to demonstrate it has conducted due diligence in making that determination.
(Image: Children as young as 11, work at Congo’s illegal mines. Courtesy of ENOUGH Project.)