Last week, the electronics industry updated its list of audited conflict-free smelters to 29. This is up from 11 smelters in the Conflict-Free Smelter program, or CFS, at the start of 2012—nearly tripling the size of the program over the past year. The smelters were audited by independent auditors chosen by the Electronics Industry Citizenship Coalition-Global-eSustainability Initiative, or EICC-GeSI, Audit Review Committee, which includes HP, Motorola Solutions, a non-industry academic, and a handful of other companies.
This is a particularly important topic, because smelters are the key chokepoint in the conflict minerals supply chain, with only 151 main smelters worldwide, according to EICC-GeSI. Smelters know where their minerals come from, so having conflict-free smelters is critical to ensuring that we as consumers can buy conflict-free products.
Getting to 29 marks tremendous progress, as only a handful of smelters had been audited by this time last year. Of particular significance, smelters outside the tantalum industry are getting audited—there are now 11 compliant gold refiners and three compliant tin smelters. This is important, because those industries do not have as many customers in the electronics sector, meaning that the word about going conflict-free is spreading to many industries.
But there is still much work to be done: no tungsten smelters have been audited, and more than a dozen more tin smelters are needed to gain a critical mass in that sector. To make this happen, the aerospace industry, a huge user of tungsten and tin products, can play a bigger role. For example, tungsten is used in blades of airplanes. In particular, aerospace companies such as Boeing or Lockheed Martin should signal to their suppliers that they should only be sourcing from conflict-free smelters. Apple, Philips, HP, and a handful of companies have already set this policy in place, but it would make a big difference now if aerospace companies did the same. In particular, aerospace firms should weigh in with sub-suppliers of superalloys.
A few more updates:
- The tantalum industry now has 15 smelters audited. This includes all major smelters except one. Some tantalum smuggling is still taking place from Congo to Rwanda, however, because of increased global tantalum prices, so the audits here need to be extra tight to close those gaps.
- Most gold refiners are opting to go through independent audits with the London Bullion Market Association, or LBMA, next year, which has a memorandum of understanding with the CFS..
- There is some progress on tin smelters, with three smelters now having passed the audits. Two more are going through corrective action. This list should be published as soon as possible, as the CFS has a policy to publish the names of conflict-free smelters once there are three names. From a conflict minerals standpoint, the transparency of companies is particularly important to continue incentivizing market behavior toward going conflict-free.
The CFS program will publish revised audit protocols for the 3Ts (previously they were for each mineral) by the end of the year.
Here is the full list from Conflict Free Smelter group indicating the status of the companies in its program:
Photo: Gold trader in eastern Congo (Enough / Sasha Lezhnev)