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New Public-Private Alliance to Promote Mineral Sourcing from Conflict-Free Mines

Thursday, November 17, 2011
Sandler, Travis & Rosenberg Trade Report

A new Public-Private Alliance for Responsible Minerals Trade launched Nov. 15 aims to help the Democratic Republic of the Congo and other governments in the region break the link between the illicit minerals trade and ongoing violence and human rights abuses. According to a State Department press release, the PPA combines the financial and technical resources of the U.S. government, companies, trade associations and civil society to assist with the development of pilot supply chain systems that will allow businesses to source minerals from mines that have been audited and certified to be conflict-free.

The State Department and the U.S. Agency for International Development will invest approximately $3.2 million in the PPA, specifically to support conflict-free mineral certification and traceability. More than 25 companies, trade associations and other organizations have expressed their intention to participate as well and have already pledged over $830,000 toward the goal of $2 million in additional funding by the end of 2012.

U.S. law requires specific disclosures concerning products that may contain conflict minerals from the DRC or adjoining countries. Conflict minerals include columbite-tantalite, gold, wolframite and their derivatives and are used in the manufacture of a wide range of goods, including cell phones, computers, video game systems, medical equipment, high-speed tools, machine parts, glass and lamps. The Securities and Exchange Commission is working to issue final regulations implementing this requirement (click here for a summary of the proposed regulations) and held a public roundtable Oct. 18 to discuss issues such as appropriate reporting approaches, challenges in tracking conflict minerals through the supply chain, and workable due diligence. In the meantime, the State Department has already advised companies to begin immediately to structure their supply chain relationships in a responsible and productive manner to encourage legitimate, conflict-free trade.

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