US companies face challenges to secure ethical mineral supply chains

By mahlokoane percy ngwato

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American companies are failing to abide by a policy to prevent the import of minerals from conflict areas a recent report has said.

The Government Accountability Office (GAO) report said that companies have filed disclosures for the four "conflict minerals" which are tantalum, tin, tungsten and gold.

Secretary of State John Kerry has determined that these are financing conflict in the Democratic Republic of the Congo (DRC) and neighbouring countries.

RELATED: Bringing ethics to Africa's supply chains

67 percent of companies filing for a disclosure in 2014 "were unable to determine whether those minerals came from the DRC (Democratic Republic of the Congo) or adjoining countries, and none could determine whether the minerals financed or benefited armed groups in those countries.”

Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires American companies to identify where their minerals come from. It is estimated that the act has reduced revenue to militias by up to 65 percent.

It is estimated that militias in the DRC rely on mining for 75 percent of their revenues; roughly 35 percent of mining profits in the DRC go to armed groups.

"Companies GAO spoke to cited difficulty obtaining necessary information from suppliers because of delays and other challenges in communication. Implementation of the US conflict minerals strategy faces multiple obstacles outside the control of the US government."

SOURCES: [Sputnik News; Source Intelligence; GAO]

Read the August Issue of African Business Review. 

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