IMDS, CDX, REACH, CM & RoHS Training & Data

more information...

News / Blog
About Us
Contact Us

Conflict Minerals Overview

Attribution for all ore images: Rob Lavinsky, – CC-BY-SA-3.0 [CC BY-SA 3.0 (], via Wikimedia Commons

In order to meet all the due diligence requirements that apply to Conflict Minerals (Section 1502, Dodd-Frank Wall Street Reform Act) companies must understand the rules promulgated by the Securities and Exchange Commission (SEC) as well as make critical business risk decisions regarding the scope of data to be collected and reported.

FOCUS OF THIS OVERVIEW: The impact of the US’s Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Conflict Minerals) on:

  • Product manufacturers (domestic and foreign) who are publically traded in the US, i.e. those filing reports with the U.S. Securities and Exchange Commission (SEC)

  • All-sized suppliers who provide materials, components and/or assemblies to publically traded product manufacturers

What you need to know

What you need to watch for

Legislative History



How Conflict Minerals impacts companies

Conflict Minerals Requirements

Conflict Minerals Risks

Conflict Minerals Enforcement and Penalties

What You Need To Know

  • The conflict minerals (CM) are:

    •  Columbite-tantalite (coltan), from which Tantalum is extracted

    • Cassiterite, from which Tin is extracted

    • Wolframite from which Tungsten is extracted

    • Gold bearing ores, from which gold is extracted

    • Any other mineral or its derivatives which the U.S. Secretary of State determines to be financing conflict in the DRC countries. To date, no other minerals have been designated as conflict minerals.

    • The extracted elements - Tin, Tantulum, Tungsten and Gold - are commonly referred to as “3TG”

  • The CM sources of concern are those in the Democratic Republic of Congo and nine countries that adjoin it (the covered countries). However, all CM sources must be identified - not just those in the covered countries. It is not sufficient to simply declare that none of your company’s 3TG is sourced from the covered countries.

  • A manufacturer is any company that manufacturers or contracts to have manufactured a product. Many companies that might not normally be thought of as manufacturers are within the scope of Section 1502 because they contract to have products manufactured for them.

  • To be within the scope of Section 1502, the 3TG must be 1) intentionally added; 2) necessary to the production of a finished product; AND 3) be contained in the finished product

    • There is no de minimus amount – any amount of 3TG must be tracked to its source

  • Companies are required to conduct a Reasonable County of Origin Inquiry (RCOI) to determine 100% of the source(s) of 3TG in their products

  • Smelters and refiners of 3TG are an effective choke point in the supply chain, and tracing 3TG to the originating smelter is considered a sufficient RCOI for most companies in a supply chain

    • Smelters are being audited and certified by the Conflict-Free Sourcing Initiative (CFSI) through its Conflict-Free Smelter Program

    • CFSI provides a standard Excel spreadsheet reporting template - the Conflict Minerals Reporting Template (CMRT) - which is utilized by many companies to collect CM data from their supply chains. Data from all suppliers in a company’s supply chain must be consolidated correctly in order to accurately describe the sources of 3TG in all products from companies required to report to the SEC

  • Companies may elect to provide CM data based on a company-wide, individual product or company-defined scope of products. There is no specified scope of products for which reporting is required, although requests for CM data may specify a particular product scope.

  • From a business perspective, CM impacts all-sized companies in even the deepest supply chains

  • The SEC rules include due diligence and auditing requirements that can be confusing and require careful attention

  • Conflict Minerals has legal, business, market and competitive risks (described below) that are often overlooked by product manufacturers – especially:

    • Companies that are outside the US who are publically traded in the US, and

    • Suppliers who – directly or via their supply chains - provide materials, components and/or assemblies to publically traded companies

  • CM requires entire supply chains to collaborate in compliance solutions by providing complete and accurate CM data

  • Implementing a CM-compliance solution requires two aspects:

    • Adding selected CM tasks to current tasks within Purchasing, Design Engineering, Legal and other functions; and

    • Implementing or outsourcing a data-collection program to gather, verify and exchange data that is traceable and updateable

  • 3 keys to a successful data-collection program include:

    1. Utilizing data-collection specialists who can evaluate data for its completeness and accuracy;

    2. Having an industry-wide common data-exchange platform with common rules and a common data format; and

    3. Leveraging low-cost training that can be accessed by every company within a supply chain, e.g. Conflict Minerals Training from the Association of Equipment Manufacturers ( or the Conflict-Free Sourcing Initiative (

  • Evolution of CM-compliance solutions is currently very uneven in the aerospace, automotive, defense, electronics, heavy equipment, medical and other industries, depending on the involvement to date of industry associations and major companies, as well as the depth of an industry’s supply chains; nevertheless, progress is being made in all industries, and industry-wide solutions are visible on the horizon

What You Need to Watch For

  • A surge in customers requiring suppliers to provide quality data along with quality materials and products, in order to help them comply with CM. This requirement will likely become a condition of winning business and of receiving payment.

  • The requirement that 100% of all sources of 3TG be identified is causing companies to purge their supply chains of suppliers who cannot provide the necessary data. This will likely become a critical selection criteria in renewing current vendor approvals or issuing new vendor approvals.

Legislative History

  • Enacted: 2010

  • SEC final rules came into force: November, 2012

Geography / Markets

  • Primarily: United States

  • Additionally: The European Union is committed to implementing its own CM legislation and is currently debating 1) whether reporting will be voluntary or mandatory; 2) what supply chain participants will be responsible for reporting; and 3) whether the scope of the law will be all mineral-producing regions of the world that are impacted by conflict.


  • Legal liability: Companies publically traded in the U.S. which manufacture - or contract to have manufactured - any type of product

  • Business liability: regardless of location, all companies who are publically traded in the U.S and/or supply to companies who publically traded in the U.S

How CM Impacts Companies

  • CM requires all companies publically traded in the US to identify 100% of the sources of in-scope 3TG in their products

  • CM data collection is an ongoing annual (calendar year) requirement requiring cooperation from all tiers in a supply chain

  • Failure to provide complete and accurate CM data likely lead to financial risk and the loss of business

CM Requirements

While the requirements below apply specifically to publically traded companies, the requirements for RCOI, due diligence and possibly audits extend down the supply chain to varying degrees, so that reporting companies can support the reliability and accuracy of their CM determination process.





Conduct a Reasonable Country of Origin Inquiry (RCOI) that is performed in good faith and is reasonably designed to determine whether any CMs originated in the covered countries or are from scrap or recycled sources

Form SD

File Form SD with the SEC, disclosing their CM determination and providing a brief description of their RCOI and its results. File Form SD by May 31 of the year following the year for which the CM status determination is made, e.g. by May 31, 2016 for CY2015

Conflict Minerals Report

Include this report as an exhibit to Form SD, if 1) their RCOI determines that all or some of their CM may have originated in the covered countries and 2) all or some of their CM may not be from scrap or recycled sources.

Due Diligence

Depending on their RCOI, they may be required to undertake due diligence in accordance with the Organisation for Economic Co-operation and Development’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Due Diligence Guidance) or other nationally or internationally recognized due diligence framework.

Independent Private Sector Audit (for companies required to include a CM Report as an exhibit to Form SD)

The purpose of the audit is to determine 1) whether a public company’s due diligence conforms to the criteria in the company’s selected due diligence framework and 2) whether the company’s description of the due diligence measures it performed are consistent with the due diligence process that the company undertook. The audit must be conducted in accordance with the standards set forth by the Government Accountability Office (GAO).

CM Risks

CM entails a wide variety of legal and business risks for all companies within a supply chain.

While attention is typically focused on legal risks, the greatest non-compliance impact on companies may very well result from business risks, e.g.:

  • A customer cancels a contract or delays payment until you provide CM documentation

  • A competitor provides CM documentation earlier than your company does, and it uses that documentation to win new customers and to take away your existing customers

  • Many companies want to declare their products 100% conflict-free and will not select your company as a supplier if your company cannot provide the required CM determination

CM Enforcement

To date, the SEC has not announced any particular enforcement program. Given the two-year and four-year transition periods contained in the SEC rules, we expect that few enforcement actions will be undertaken - except in the case of egregious violations of the rules - until after the completion of the transition periods.

Outside of SEC enforcement, a private right of action exists under Section 18 of the Exchange Act for shareholders who perceive irregularities in filed reports. It is expected that advocacy groups and NGOs will be publically highlighting perceived violations of the rules, and these organizations may urge shareholders to take action. It is also possible that some of these organizations may purchase shares in companies in order to have standing to undertake such actions in their own right.

DISCLAIMER: This Overview is not intended to include every nuance of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the SEC rules regarding the same. RSJ Technical Consulting does not take any responsibility for the completeness of the information. Additionally, RSJ Technical Consulting does not take any responsibility for how individuals, companies and organizations may use this information or for any aspect of Section 1502’s impact on their business. Individuals, companies and organizations are advised to consult their Legal staff and/or to seek third-party assessments of Section 1502’s impact on their business.