In many conflict areas or politically unstable regions – particularly in the Democratic Republic of the Congo (DRC) and neighboring countries, the trade of minerals may be used to fund armed groups. This trading may be linked to corruption and money laundering, and it can cause human rights abuses. Conflict minerals can be found in electronics, cars, and jewelry. Tin, tungsten, tantalum, and gold – collectively referred to as “3TG” – are common conflict minerals.
🌱 What obligations do companies have regarding conflict minerals?
Under the Dodd-Frank Act, publicly traded companies listed in the U.S. must report the origin of the 3TG minerals used in their production to the Securities and Exchange Commission and they must “assess and address” supply chain risks in relation to 3TG potentially originating from the DRC and adjoining countries. Under the Conflict Minerals Regulation, EU-based companies must make certain they only import 3TG minerals from “responsible sources”. Additionally, there is a non-binding OECD Due Diligence Guidance for conflict minerals, which aims “to help companies respect human rights and avoid contributing to conflict through their mineral purchasing decisions and practices” throughout their global supply chains.
🌱 What is the link between conflict minerals and the energy transition?
The extraction and trading of transition minerals can be tied to conflict, violence, and human rights abuses. For example, nickel extraction in Guatemala is linked with forced displacement, sexual violence, and murder. Moreover, considerable shares of the global transition mineral reserves are found in areas that are politically fragile, corrupt, or affected by conflict – such as the DRC, Afghanistan, Guinea, and Guatemala.
🌱 What can we do to responsibly source minerals?
To ensure sustainable development in the energy transition, supply chains for transition minerals should be governed in a transparent, responsible, and accountable manner. To this end, collaboration between the private sector, governments, civil society, and local communities is key. While there is a legal framework in place for 3TG minerals, most transition minerals (incl. cobalt, lithium, and bauxite) are not yet addressed. For all transition minerals, the potential risks of conflict and violence, health and safety violations, environmental damage, child and forced labor, and other human rights abuses need to be addressed.
Read more about the SEC conflict minerals rule here: