As obliged under Section 1502(d)(3)(C) of the Dodd-Frank Act (Act), the U.S. Department of Commerce (Commerce) has compiled a list of “all known conflict mineral processing facilities worldwide.” The release of this list should assist companies that must comply with Section 1502 of the Dodd-Frank Act in identifying unique smelters of conflict minerals in their supply chains. In its report, Commerce noted the “considerable lack of publicly available information on processing facilities” and noted that the list covers only “known” facilities in the world, which included data supplied by specific government entities and other organizations as listed in the report.
Commerce reported several “limitations and challenges” to collecting the required data, including producers of metals that are “off the grid,” “makeshift smelters” throughout Africa which ship the product overseas to scrap yards and informal metal traders, and intermediaries that do not record the chain of custody of the metal. The report specifically calls out the Shanghai Gold Exchange (SGE), which accounts for 15-20% of all commercial gold sold worldwide, for not releasing or keeping records of where its gold is sourced from. Commerce also notes that the vast majority of gold sold worldwide is comingled at the SGE, and concludes that “any material that is purchased through the SGE is untraceable to a smelter, refiner, or processor of origin.”
Conflict minerals are defined in the Dodd-Frank Act as columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives, which are listed as tin, tantalum, and tungsten. The four “conflict minerals,” tantalum, tin, tungsten and gold, are collectively called the “3TG.” Commerce listed what it believes are unique smelters and refiners of 3TG globally, noting the source of data on each facility. The list includes over 130 each of gold and tin smelters and refiners, over 90 for tungsten, and around 70 global tantalum refiners and smelters.
As part of their methodology, Commerce used data on 3TG processing facilities supplied by the U.S. Geological Survey (USGS), and then added data from existing lists from the US Government Accountability Office (GAO), the Organization for Economic Cooperation and Development (OECD), the London Bullion Market Association (LBMA), the Electronic Industry Citizenship Coalition (EICC), and used related information from the Global e-Sustainability Initiative (GeSI), Dubai Multi Commodities Centre (DMCC), and the World Gold Council (WGC). Commerce believes this is “the most comprehensive list to date of all known processing facilities in the world.”
The release of this list should assist companies that must comply with Section 1502 of the Dodd-Frank Act in identifying unique smelters worldwide, and should help eliminate aliases, duplicates, and misinformation from their own smelter lists. Affected companies that meet certain criteria under the Act are required to publicly report a list of facilities (smelters or refiners) used to process the conflict minerals that are in their products, among other requirements.
For purposes of compliance with Section 1502 of the Dodd-Frank Act, the conclusion that material sourced through the SGE cannot be traced to the origin means that a company can likely not reasonably conclude that a material from SGE is “DRC Conflict Free,” as defined in the Act. Therefore, material sourced from the SGE would likely qualify under the Act as “not found to be ‘DRC conflict free.’”
The Commerce list does not indicate whether any particular facility on the list processes minerals that are used to fund conflict in the Covered Countries. The Covered Countries are defined in the Act as the Democratic Republic of the Congo and its adjoining countries.
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