Conflict Minerals (SEC 13p-1) & CMRT Compliance

Conflict Minerals is also known as Section 1502 from the Dodd Frank Act introduced in 2010 by the U.S. Congress. The act requires all the U.S. publicly listed companies to review the sourcing and supply of materials such as Tin, Tungsten, Tantalum and Gold (also known as 3TG) that are derived from cassiterite, columbite-tantalite and wolframite, respectively. Companies are required to annually report on their efforts to the U.S. Securities and Exchange Commission (SEC). The Conflict Minerals is one of the first laws that created a movement to globally promote ethical sourcing of minerals. The regulation also recommends companies to check if these materials originated from the Democratic Republic of Congo (DRC) and surrounding countries to run due diligence to avoid promoting inadvertent funding of armed groups or abuse of human rights. Countries in the EU, China, Congo and Rwanda have also passed laws similar to Conflict Minerals. Recently in 2017, the EU also introduced a policy requiring companies dealing with tin, tantalum, tungsten and gold within the territory to carry out due diligence checks irrespective of their source of origin. The new regulation came to effect on 1st of January 2021. These international laws and standards pertaining to the Conflict Minerals are based on the international Organisation for Economic Co-operation and Development (OECD) standard to ensure responsible mineral supply chains.

**Dodd-Frank Conflict Minerals Act:** All publicly traded businesses and companies in the U.S. are subject to the Dodd-Frank Conflicts Minerals Act that requires them to annually report the use of conflict minerals extracted from the Democratic Republic of Congo (DRC) and adjoining countries, to the SEC. This act applies primarily to the public listed companies in the U.S. and suppliers to these companies are required to carry out the Reasonable Country of Origin Inquiry’ (RCOI) and due diligence on conflict minerals to support their customers. **EU Conflict Minerals Regulations:** The EU Conflict Minerals Regulations are compulsory to all the EU-based importers of minerals such as tin, tantalum, tungsten and gold in the form of mineral ores, concentrates or processed metals. The regulation also aims at promoting ethical sourcing of smelters and refiners of these minerals irrespective of their country of origin to check if these companies strictly adhered to due diligence practices. In case importers of these minerals from the EU find any smelters and refiner practices inadequate, involving risks or outside of the ‘white list’, they are required to manage and report to curb irresponsible and unethical sourcing.

The Responsible Minerals Initiative or RMI created a standard reporting template called the Conflict Minerals Reporting Template (CMRT) to allow transfer of information across the supply chain on data involving mineral country of origin and the smelters and refiners. The template also facilitates identification of new smelters and refiners that are required to undergo audit procedures under the RMI’s Responsible Minerals Assurance Process (RMAP).

The Responsible Minerals Initiative (RMI) smelters list is a list of smelters and refiners that have been audited and verified by the RMI to be conflict-free. The RMI maintains conformant and active smelter list and encourages companies to source from smelters on this list to ensure that their supply chains are conflict-free.

The Conflict-Affected and High-Risk Areas (CAHRAs) list is a list of countries and regions that are considered to be at high risk of contributing to armed conflict, human rights abuses, or environmental harm. Companies are required to conduct due diligence on their supply chains for conflict minerals if they source from or operate in these areas.

SEC filings related to conflict minerals refer to the reports that companies are required to file with the US Securities and Exchange Commission (SEC) if they use conflict minerals in their products. These reports, known as Form SD filings, require companies to disclose their due diligence efforts and the results of their supply chain audits.