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Shipping Now: ‘Conflict-Free’ Parts

{complink 12806|AVX Corp.} and {complink 12926|Motorola Solutions Inc.} have announced the first shipment of tantalum products validated as conflict-free. The tantalite ore used in the AVX components was mined in the Democratic Republic of the Congo (DRC).

The components are the result of Solutions for Hope (SfH), a cooperative effort by AVX and Motorola. The project enables companies to meet the impending requirements from the Dodd-Frank Act that US companies disclose the use of certain minerals, including tantalum, in their products and ensure that the minerals do not fund illegally armed groups operating in the DRC.

The supply chain process, which is controlled by AVX, is a closed-pipe system in which the ore, mined from government-approved sources, is traced along the supply chain to the customer. According to the SfH Website, the minerals are sourced from the Mai Baridi, Kisengo, and Luba mines in the northern DRC. Mining Minerals Resources SPRL (MMR) has the mining rights and has contracted with a local mining co-op. The minerals are mined through a semi-mechanized process.

Once the minerals are collected, they are weighed and logged in for traceability. They are then transferred to an MMR depot in Kalemie, DRC, for export. According to the SfH Website, AVX takes ownership of the minerals at this point. The minerals are transported to a smelter, turned into tantalum powder, and shipped to AVX's facility in the Czech Republic to be made into tantalum capacitors.

To ensure that each step of the process could be validated, the companies conducted due diligence before launching the operation. According to the SfH Website, this due diligence included:

A review of the mine… to determine the conflict free status of the mine. After this was confirmed, the mine began the traceability process of bagging and tagging…
An independent audit of the operation was conducted to evaluate conformance of the operation to the OECD Due Diligence Guidance. This work was conducted by Gregory Mthembu-Salter, a consultant to the United Nations Group of Experts. The findings indicated that the mine and trade routes were indeed conflict free, but also highlighted areas for improvement to the mining operations systems.
The mining operations have hired a consultant to help address the issues identified in the report. There also are a number of analytical checks by an independent organization, Alfred H Knight, which AVX conducts to validate the traceability mechanisms. Samples are taken at the mine; the depot at the point of export; the warehouse in Johannesburg, South Africa; or Alex Stewert in the case of Der es Salaam and again at the smelter.
The F&X smelter
[was also audited for compliance]. The smelter has the ability to “semi-batch” treat materials so that these materials can be tracked separately through the smelting process to ensure that the conflict-free materials from the DRC are sent to AVX…
[Every point] in the process has been visited. This includes the mines, trade route, point of export from the DRC, the F&X smelter and the AVX facility.

Intel, Hewlett-Packard, Foxconn, and Nokia have joined the SfH effort.

11 comments on “Shipping Now: ‘Conflict-Free’ Parts

  1. prabhakar_deosthali
    March 27, 2012

    This is really a welcome move to block the entry of illegally produced minerals into the electronics supply chain.

    Why can't similar mechanisms be adopted to check the entry of counterfeit parts into the lectronic supply chain ? I believe the issue of counterfiets parts is much more serious for military and space industry as it directly affects the products used in strategic applications.

  2. FLYINGSCOT
    March 27, 2012

    I think this is a great move and I hope other companies and suppliers jump on board.  Personally I would welcome paying a little more for everything if I knew it were sourced and supplied responsibly and safely.

  3. jezhyra
    March 27, 2012

    Please contact us at Cmkkgroup@gmail.com if you want to do business in Congo, Katanga.

  4. elctrnx_lyf
    March 28, 2012

    Does it mean that other manufacturers in US also should do similar execise reagrding the tantlum coming form mines of congo. This will put a lot of overhead on the companies to manufacture such products and inturn price will increase.

  5. Barbara Jorgensen
    March 28, 2012

    @electronyx: Any company that wants to join SfH are welcome. And, although it seems that there would be a lot of pressure on the mines, there is a method SfH uses regarding marekt price for the ore. I didn't understand it so I did not include it in the article, but the gist is, somehow the companies are able to compete with global prices on the ore and keep the money in the region. I'll see if I can get the particulars so I can explain it better, but that is definitely being looked at. It is mentioned on the SfH website.

  6. ChuckBlakeman
    March 29, 2012

    This is a terrible initiative which destroys the dignity and opportunity of the Congolese people. What this report conveniently leaves out:

    1) Katanga is not in the conflict zone. The whole point of Dodd-Frank was to fix the problem in the conflict zone (North Kivu is the heart of it, with other local areas included). For a giant corporation, NGOs and trade associations to pat themselves on the back for creating a conflict free “pipeline” that does nothing to solve the actual problem of ridding the conflict zone of militia is ludicrous. Who cares if you bring minerals out of the Congo if you do nothing to get the militia out as well?

    2) The UN Panel of Experts has confirmed that the smuggling of minerals by the militia has “increased significantly” since Dodd-Frank shut down the entire central African mining industry. Why doesn't this show up in AVX's report? Because it shows the ineffectiveness of what they are doing – it is completely unrelated to solving the problem of criminal elements in the Congo, yet this report insinuates that somehow this AVX project is doing something to solve the problem of ridding the Congo of the militia. Nothing could be farther from the truth – they are doing better than ever.

    3) We exist to serve artisanal miners throughout the Congo in moving their minerals to market. These tribes have a few thousand tons of coltan already stockpiled that were mined before Dodd-Frank, and have the capacity to mine hundreds of tons a month. Since September 11, 2010, not a single ounce of artisanal coltan has been purchased by any smelter anywhere in the world. This report references “artisanal cooperatives” – a couple small mines in Katanga – but doesn't bother to note that the UN Panel of Experts says over 1 million people in the conflict areas and up to 10 million throughout the Congo who depend on mining for a living have been moved from abject poverty to utter destitution because nothing is selling.

    4) If AVX is the proof project on how we must work in order to get minerals out of the Congo, the Congolese people themselves will likely never benefit. In fact, it is much more likely that the entire Congolese mining industry will be taken out of the hands of the artisanal miner (90%+ is mined by tribes), and usurped by giant corporations like AVX, which is not a Congolese company and has no Congolese presence other than to pull minerals and money out of the country. This article is blowing their horn because they can get coltan out of the Congo. The issue has NEVER been the need to get coltan out of the Congo, but to rid the Congo of the militia and create a local economy that is sustainable without complete dependency on a giant non-Congolese corporation. AVX's project fails in every respect. Since they are there the Congolese have become fully dependent on their presence and no local economy is being built that could be sustainable without mining.

    5) 95-98% of all minerals in the Congo are from areas hundreds to over a thousand miles from the conflict area, in places not even connected to the conflict zone by a single road. The idea that the Congo and all of central Africa, the size of the United States, has been embargoed because of what is happening in an area the size of Vermont that is not connected to the rest of the Congo by roads, is mind-boggling to the Congolese. It is like dropping a nuclear bomb on Pakistan to kill bin Laden. No one would ever support such a solution, but that is exactly what we have done to central Africa – the collateral damage from Dodd-Frank is massive and universal throughout the region, in the faint hopes that we might catch a few militia in the path of this region-wide carnage. Yet the militia are the only ones thriving.

    Here we have a giant corporation blowing their horn for what amounts to old-style imperial colonialism and a full takeover of the local economy of a region of the Congo that doesn't even begin to address the conflict zone problem, while millions in the Congo are devastated and Kwashiorkor disease is now being reported, and we're supposed to applaud?

    The world is upside down.

    Demonize criminals, not minerals.

  7. Houngbo_Hospice
    March 29, 2012

    @ChuckBlakeman 

    “Demonize criminals, not minerals.”

    I agree, the main issue seems to be left aside. But the situation is not that simple. This is one way to stop the militia even if the population seems to be affected. Also the manufacturing companies want to preserve their reputation and we can't blame them for that.

  8. ChuckBlakeman
    March 29, 2012

    Houngbo,

    You said: This is one way to stop the militia even if the population seems to be affected.

    You can't just make statements of belief and have them be true without any reality check.  Here's the reality check again.

    1) 400,000 miners have lost their jobs in the KIvus alone, 1 million people in the area have lost their family income, and up to 10 million have lost their income across the entire Congo. This doesn't even count the other 9 countries that have been embargoed by this “cell phones are evil” nonsense.

    2) The UN Panel of Experts says smuggling by the militia has “increased significantly” since Dodd-Frank.

    So how can you say this makes any sense at all as “one way to stop the militia even if the population seems to be affected.”?   If you believe that, than you have to also say we should have dropped a half dozen nuclear bombs on Pakistan years ago to take out bin Laden. That's “one way to stop him, even if  population seems to be affected.”

    Dodd-Frank is a nuclear option. Any plan with such massive collateral damage is no plan at all. Your callousness toward the millions who have been moved to utter destitituion by Dodd-Frank while the militia is doing better than ever is at the root of the imperialistic/colonialistic mindset that AVX, Motorola, and HP are using to do a mineral grab in the Congo without any regard whatsoever to whether they are helping solve the Congolese problem.

    Your statement is a statement of personal convenience that is indefensible.  I would like to see you make it if your family was in the middle of this.

    And yes, we CAN and SHOULD blame the manufacturing companies for putting the preservation of their reputation above the safety and future of the Congolese people.  Have you never read The Jungle by Upton Sinclair? http://en.wikipedia.org/wiki/The_Jungle  We learned that lesson in 1905.

  9. Houngbo_Hospice
    March 29, 2012

    @ChuckBlakeman 

    I understand your point, but I still stand my ground : “the solution is not that simple”.

    We have been accusing those manufacturing companies of using “blood” minerals in their production and we urge them to take actions to stop that. Why should we now blame them for doing what we are asking them?

    I am for the full enactment of the conflict mineral provisions of Dodd-Frank and there should be no pressure on SEC to water down the law.

    “Transparency of minerals coming from conflict regions is a vital responsibility”  ( Rabbi David Saperstein )

  10. Barbara Jorgensen
    March 29, 2012

    Chuck: Thanks for your thoughtful comment and the information. I was unaware of the geographies involved in terms of the mining operations and how extensive the conflict zone is. It seems like an impossible task to truly determine if a mineral is “conflict-free.”

    You also bring up a good point about the Act. It is one thing to declare something as conflict-ree and another to actually work against the conflict. Unfortunately, the Dodd-Frank Act simply asks companies to demonstrate their efforts in avoiding conflict minerals. So AVX and Motorola meet the letter of the law. Again–I'm not saying this is the right thing to do, but merely saying the companies are demonstrating their compliance.

    I believe there has been testimony before Congress that supports that the Congolese are not being helped by the Act. In terms of the miners and consortiums, your information was helpful in pointing out some of the misconceptions there as well.

    I thank you for being a thoughtful reader and contributing to EBN. I hope our readers continue to educate themselves about things that are decided upon in the US that impact people elsewhere. Good intentions sometimes have a way of backfiring, and Dodd-Frank is a classic example.

  11. ChuckBlakeman
    March 29, 2012

    Houngbo,

    Your point has never been “it's not that simple”.  In fact it seemed your point was “it's that simple”  – just get companies to follow Dodd-Frank and all will be well.  Nothing could be farther from the truth. As we've already demonstrated with data and facts, it is making things worse.

    Do you have any reason to be so steadfastly behind the implementation of Dodd-Frank?  Would be great to hear some ways in which you feel it is defensible. So far your only defense has been simply that you believe it should happen.  Why?  I've given a dozen reasons why it shouldn't and how terrible the impact is on millions of Congolese, and your response is “I am for full enactment…”  Why?  What good do you see it doing? Cite something.

    Quoting an American who believes it should happen is not a good place to start.  Here's a quote from a Congolese – Eric Kajemba, leader of a Congolese Civil Society who lives in the conflict zone says, “If the advocacy groups are against us, who is for us?”  And here's another one.  The three main mining groups in the Kivus representing 20,000 miners wrote a letter to the SEC imploring them to not enact this terrible law, and telling them that no one has ever asked them what they thought or how it might effect them. Classic western imperialism and colonialist mindset.

    I get that you are for Dodd-Frank.  Why?


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