Electronic devices and components contain numerous minerals, some of which are subjected to conflict minerals regulations. These regulations aim to stop armed groups from exploiting local communities and committing human rights violations where conflict minerals are mined. As the demand for electronics rises, the risk of unethical sourcing also rises. Therefore, electronics manufacturers must trace conflict minerals in their supply chain to meet compliance requirements and place products on certain markets, specifically in the United States (U.S.) and the European Union (EU).
3TG minerals are subject to two primary sourcing regulations: Section 1502 of the U.S. Dodd-Frank Act and the EU Conflict Minerals Regulation. Both require conflict mineral tracing throughout the supply chain, which consists of gathering smelter data and compiling compliance reports.
While the regulations are similar, the EU Conflict Minerals Regulation applies to companies that import 3TG into the EU from Conflict-Affected and High-Risk Areas (CAHRAs). Alternately, the U.S. Dodd-Frank Act pertains to publicly traded companies selling products in the U.S. that may contain 3TG sourced from the Democratic Republic of Congo (DRC) or any adjoining countries. The list of adjoining countries within the scope of the U.S. Dodd-Frank Act includes:
Electronics manufacturers often struggle to trace 3TG in their supply chains, as the process requires extensive supplier inquiries to ascertain the minerals’ origins for reporting purposes.
This step-by-step process for 3TG tracing aids in efficiently obtaining supplier data and offers instruction on building a complete and accurate conflict minerals compliance report.
The conflict minerals process begins when you identify 3TG in your products. A product’s Bill of Materials (BOM) is a helpful resource to detect the presence of any 3TG. If the BOM is unavailable, any indicative product characteristic, such as a product description or categorization, can determine the presence of 3TG.
Products known to contain 3TG can move to Step 2: Performing the RCOI.
Products not known to contain 3TG may require further investigation. Suppliers must provide a declaration stating whether their product contains any conflict minerals.
The Reasonable Country of Origin Inquiry (RCOI) is a process that ascertains where the in-scope 3TG minerals are sourced. Companies must identify if their 3TG minerals originate in covered countries or from scrap sources. The RCOI process may be extensive, depending on how much 3TG a company sources and the number of suppliers.
Tools to aid in this process include:
The RMI's Conflict Minerals Reporting Template (CMRT), which is the current industry standard for collecting conflict minerals data. CMRTs collect the following information:
The RMI’s RCOI data list, which provides information on reliable smelters.
Due diligence must be conducted for conflict minerals not originating from scrap or recycled sources and may have been sourced in the DRC (U.S. act) or CAHRAs (EU regulation). The Conflict Minerals Report (CMR) includes a description of measures taken to establish the chain of custody of the minerals. Below are the tasks involved in creating an effective CMR:
Differing sources of information can create confusion. It's important to understand and map smelter facility locations and review data for risk indicators.
Smelter verification programs match recognized smelter names with the frequently updated lists on the London Bullion Market Association (LBMA), Responsible Jewelry Council (RJC), and the RMI’s Responsible Minerals Assurance Process (RMAP). These programs will also pinpoint smelters that require additional research and engagement.
Research and engagement teams can conduct outreach to verify the information and gather additional details about the mines and the smelters. Tracking and organizing communications and data produced during 3TG tracing is essential, as they must account for an auditable record of a company’s due diligence effort.
Several minerals beyond 3TG, such as cobalt, mica, and lithium, are used in electronics manufacturing. In addition to the CMRT, the RMI also created the Extended Minerals Reporting Template (EMRT) and the Additional Minerals Reporting Template (AMRT) to help companies trace cobalt, mica, and additional minerals of concern in their supply chains. Unlike 3TG reporting, using the EMRT and AMRT is voluntary as they cover minerals outside the scope of conflict minerals regulations. These templates are great resources for companies looking to ethically source minerals.
The EMRT deals with sourcing cobalt and mica, which are often mined in high-risk areas. Cobalt is vital in producing electronics and other electronic components, specifically lithium-ion batteries. Mica also has many uses in electronics, including as an insulator and thermal conductor. The AMRT offers companies additional aid in tracking supplier data for any mineral of concern (the most common are copper, nickel, aluminum, and lithium).
Source Intelligence offers the industry’s most comprehensive responsible minerals sourcing solution. Our conflict minerals program facilitates supplier engagement, data analysis, and document generation to streamline compliance. Beyond 3TG, our solution is also compatible with the EMRT and the AMRT for comprehensive data collection of any minerals of concern. Through our software and managed services, we can help ensure your minerals are sourced responsibly.