The U.S. Securities and Exchange Commission (SEC) has voted to pass rules that will require companies to disclose the purchase of four minerals -- often mined in war zones and used to fund civil conflicts -- from the war-torn Democratic Republic of Congo.
The four minerals in question are tantalum, tin, tungsten and gold. Known collectively as "blood-" or "conflict minerals" when they are purchased from the Congo, these minerals are key in the manufacture of cellphones and almost every other piece of electronics. As our demand on these devices has grown, so has the demand for these vital minerals.
The new rules by the SEC will now require all publicly trading companies in the U.S. -- some 6,000 in total -- to tell customers where the minerals originated. The rules do not prohibit companies from using blood minerals, though companies have until May 2014 to make their first minerals disclosure. On top of that, for two years -- four years for smaller organizations -- companies will simply be able to disclose that they cannot determine if the minerals they use are conflict minerals or not.
The SEC has estimated that the compliance costs could total as much as $5 billion initially, but the costs will fall to between $200--$600 million annually as compliance procedures are put in place.
Some companies have already taken it upon themselves to eliminate conflict minerals. Intel is committed to 'conflict-free' processors by 2013, while Apple was the first company to draw up a list of all 175 of its supply chain and require that suppliers are audited where possible.
Other companies such as General Electric, HP, and Motorola have joined forces to create the Public-Private Alliance for Responsible Minerals Trade with the aim of helping those in the Congo and other governments in the region to break ties with the conflict mineral trade.
Image source: Wikimedia Commons.