Business
Ethical mineral sourcing
Ethical sourcing of minerals used in electronic equipment has become a hot topic of late, write Nicolaas C.
Steenkamp and Breton Scott.
I
n recent years, there has been an increase in the
requirements of sourcing ore from artisanal and informal
small-scale miners. This mostly relates to ensuring that
the material was not obtained through child labour or forced
mining to fund conflicts.
The passing of the Dodd-Frank Act relating to tin, tungsten,
tantalite, and gold (3TG) mined in the Great Lakes region of
Central Africa, states increased scrutiny by the London Metals
Exchange (LME), focusing on tin, cobalt, and potentially, copper,
sourced from the Democratic Republic of the Congo (DRC) and
hence, broadening of the definition of ‘conflict’ or ‘blood’ diamonds
by the Kimberly Process (KP).
multinational companies to demand proof that the minerals and
materials supplied and used by them in the production of their
goods are considered conflict-free.
Conflict in the Central African Republic exposed widespread
smuggling and links to conflict, and Zimbabwe’s diamonds
documented hidden links that have funnelled significant diamond
revenues to the partisan army and intelligence services.
South American countries such as Peru and Columbia have also
been cited as sources of conflict gold. The Southeast Asia region, in
turn, is known for conflict gemstone smuggling.
Industry requirements
The DRC suffered an extended period of conflict and
unfortunately became infamous for producing conflict minerals
and gemstones, leading to the coining of terms such as ‘blood
diamonds’ and ‘conflict minerals’. In recent years, the concern has
moved from gemstones to critical metals, specifically cobalt, and
the use of forced and child labour. Section 1502 of the Dodd-Frank Act addresses conflict minerals
by setting out requirements for due diligence, reporting, and public
disclosure, and is designed to ensure accountability and discourage
companies from doing business in ways that ultimately support
exploitation and finance conflict. It affects the DRC and all its
neighbours, including Angola, Burundi, Central African Republic,
Republic of Congo, Rwanda, South Sudan, Tanzania, and Zambia.
Cobalt is considered a critical mineral for all modern electronics,
particularly in the rechargeable battery sector. The other minerals
produced in the so-called Great Lakes of Africa, namely tin,
tungsten, tantalum, and gold, have now been included in the
focus of social awareness groups. This has motivated several large All parties subject to the Act are required to file a Specialised
Disclosure Report (Form SD) and depending on the origin of their
conflict minerals or level of determination, issuers may need to
submit a Conflict Minerals Report (CMR). This reporting can be a
complementary output of a third-party audit process.
Background
An aerial view of illegal miners in the DRC.
36 AFRICAN MINING JULY - AUGUST 2019
www.africanmining.co.za