What Are Conflict Minerals?

Conflict minerals are natural resources mined in countries heavily affected by armed conflict and human rights violations. These minerals can be exploited to fund armed groups, perpetuating violence and instability in these regions.

Key minerals

The term “conflict minerals” is commonly associated with tin, tungsten, tantalum, and gold, collectively referred to as 3TG. Since these minerals are highly likely to be associated with high-risk regions, they are the focus of most conflict mineral regulations. However, the term itself can be extended to other minerals extracted under similar conditions.

• Tin: Extracted from cassiterite and used in electronics and as a component in various alloys.

• Tantalum: Derived from coltan and used to manufacture capacitors for smartphones, computers, and other electronic devices.

• Tungsten: Extracted from wolframite and a core component in aerospace, military, and industrial machinery.

• Gold: Highly valuable and easy to smuggle and launder, making it an ideal commodity to trade or as a currency for armed groups.

Common sources of conflict minerals

3TG minerals associated with conflict are primarily found in the following regions:

• Africa: In the eastern region of the Democratic Republic of Congo (DRC), Rwanda, Uganda, Mozambique, Central African Republic (CAR), Mali, South Sudan, Burundi, and Nigeria.

• Asia: Myanmar, Indonesia, Afghanistan,

• South America: Colombia and Bolivia.

The European Union produces a list of conflict-affected and high-risk areas (CAHRAS) that it regularly reassesses to highlight regions where sourcing minerals could be problematic. 

Industries affected by conflict minerals

• The electronics industry is the most impacted by conflict minerals due to the use of 3TG in capacitors, semiconductors, and circuit boards which power smartphones and computers.

• The automotive industry utilizes these minerals in sensors and wiring harnesses used in vehicles.

• The aerospace sector incorporates them into avionics and aircraft engines.

• These minerals are also widely used in jewelry and energy production and the manufacturing of medical equipment.

Issues associated with conflict minerals

Issues tied to conflict minerals impact global supply chains. They include:

• Human rights abuses: In conflict-affected regions, mining often involves forced labor, child labor, and unsafe working conditions. Miners and local communities suffer from exploitation and are denied basic human rights.

• Funding armed conflict: Conflict minerals are a major source of revenue for armed groups engaged in civil war and conflict. The profits obtained from mining operations fund the purchase of weapons and military equipment.

• Environmental degradation: Conflict minerals are sourced without any regard for sustainability. These harsh mining operations often destroy ecosystems and lead to deforestation, soil erosion, and water pollution.

Regulatory frameworks

EU Conflict Minerals Regulation

This regulation was introduced in 2017 and enforced on January 1, 2021. It aims to ensure responsible sourcing of minerals originating from conflict-affected regions. It mandates companies to conduct due diligence and report on their sourcing of 3TG minerals, meeting the standards set by the OECD.

Dodd-Frank Act, Section 1502

Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires US companies to disclose if their products contain minerals sourced from conflict-affected regions. The legislation was enforced in 2012, aiming to promote transparency and discourage the use of minerals that finance human rights abuses.

Reporting requirements

Per the EU and US regulatory frameworks, companies must perform due diligence and report on their supply chain practices associated with conflict minerals. Under the Dodd-Frank Act, companies must perform a Reasonable Country of Origin Inquiry (RCOI) to determine if the minerals are sourced from the DRC or adjoining regions and disclose their findings. If companies determine that their minerals are from these areas or are unable to trace their origin, they must file a Conflict Minerals Report (CMR) with the SEC.

Under the EU regulation, companies must submit an annual report detailing their efforts to identify and mitigate risks associated with conflict minerals in their supply chains. These reports must include information on the supply chain, including smelters and refiners used and measures to ensure responsible sourcing practices in line with OECD’s standards.