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DRIVING REVOLUTION IN CONFLICT-FREE MATERIALS	

Patricia Jurewicz, Responsible Sourcing Network	

Litofe Sloj Silika, Efficient Care	

Zoe McMahon, HP	

Carolyn Duran, Intel	

Max Karst, Pamoja Minerals
Driving a Revolution in Conflict Free Minerals
2:00 PM | June 6, 2012
Driving a Revolution in Conflict Free Minerals
                2:00 PM | June 6, 2012




Speakers:
Patricia Jurewicz, Director, Responsible Sourcing Network
Dr. Litofe Sloj Silika, CEO/Business Development, Efficient Care, LLC
Carolyn Duran, Materials EHS Manager, Intel
Zoe McMahon, Director, Social & Environmental Sustainability, Hewlett-Packard
Max Karst, President, Pamoja Minerals
Driving a Revolution in Conflict Free Minerals
                    2:00 PM | June 6, 2012




Patricia Jurewicz
Responsible Sourcing Network

Dr. Litofe Sloj Silika
Efficient Care
What Are “Conflict Minerals”?
 Conflict Minerals are currently defined to include:

 • Columbite-tantalite (Coltan) > Tantalum
    –    First conflict mineral – spiked by growth in cell phone
         industry
    –    DRC currently provides 8-20% of global production
 • Cassiterite > Tin
    –    DRC is worlds 6th largest producer – 3-4% of global
         production
    –    Primary funding source of rebel groups
 • Wolframite > Tungsten
    –    DRC is worlds 5th largest producer – 2-4% of global
         production
 • Gold > Gold
    –    DRC provides 1% of global production, second most
         significant funding source of rebel groups.
Source:




                                         2009 Mine (Primary) Production
                                                                                                                                             Russia
                                                                                                                                        Tungsten (4.1%)
                                                                                                                                        Gold     (7.9%)
                                                                                                                                        Cobalt (10%)
    Canada
Tantalum (3%)                                           Europe                                                                            Uzbekistan
                                                 Tantalum (4%)                                                                          Gold   (3.6%)
Tungsten (3.4%)
    Gold (4.3%)
  Cobalt (8.1%)                                                                                                                                       China
                                                Cuba
                                               Cobalt (5.6%)                                                                                   Tin        (37.5%)
            US                                                                                                                                 Tantalum (13.5%)
           Gold (8.9%)                                                                                                                         Tungsten (81%)
                                                                                                          Ethiopia                             Gold       (12.8%)
                                                                 Ghana                                Tantalum (8%)                            Cobalt     (10%)
                                                                 Gold (3.6%)
              Brazil
                                                                     Nigeria                                Rwanda
   Tantalum (16-23%)                                                                                  Tantalum (9%)
                                                               Tantalum (6-8%)
         Tin (3.9%)
                                                            Dem Rep Congo                                          Indonesia
                           Peru                          Tin        (3.9%)                        Mozambique    Tin 32.6%
                                                         Tantalum* (15-20%)                   Tantalum (3.4%)
                          Tin (12.4%)                    Cobalt     (40.3%)                                     Gold (4.3%)
                         Gold (7.7%)                                                            Zambia
                                                                                               Cobalt    (4%)
                                                                                         S Africa
                                                                                         Gold     (8.9%)
                Tin (Bolivia) (5.2%)                                                                                                                   Australia
                                                                                                                           Other Asia            Tantalum (3.5%)
                                                                                                                      Tantalum (4-5%)            Gold        (9.4%)
                                                                                                                                                 Cobalt      (10%)
                                                             Notes
     •    Items in bold are when country production represents 10% or above
     •    Country production <3% are not shown on map
     •    Map reflects mine production (primary production) only; it does not reflect metal reserves or reserve base
     •    Data sources: US Geological Survey (2009, 2010), ENOUGH (2010), and input from member companies
Conflict Minerals and the DRC

Exploitation and trade of conflict   Tin


minerals originating in the
Democratic Republic of the
Congo (DRC) is helping to
finance conflict with extreme
levels of violence in the eastern
DRC.

This conflict has claimed more
than 5.6 million lives since it
began in the late 1990s.

Mining activity is crucial to the
DRC economy. Unfortunately,
many mines in the east are
controlled by militant groups
causing serious social and
environmental issues in the
region.
Source:


                                                                                  Electrical 	

                                                                                  Non-electrical	




                Overall Usage of the 3 T’s and Gold

      Tantalum (Ta)	

              Tin (Sn)	

   Tungsten (W)	

            Gold (Au)	

                                                                             9%
                                36                 30
              40
                                %                  %
              %
     60                                    64                 70                     91
     %                                     %                  %                      %

                   Predominant industry              Diversified across     Predominant industry
                       = Electronics              industries, hard metals        = Jewelry
Metals in a Typical Laptop




Metals represent around 36% of total product
                   weight
Provision 1502 on Conflict Minerals
•    Public companies traded on the U.S. stock market are required to
     report annually to the U.S. Securities and Exchange Commission
     (SEC):

      –  Whether its products were produced with conflict minerals
         (3TG) that originated in the DRC or adjoining countries
      –  If they did come from the region, mine of origin
      –  If any of their products are not DRC conflict free

•    The report must be audited by an independent private auditor and
     posted on the company external website

•    Proposed rule issued in December 2010
      –  Public comment throughout 2011
      –  Was due to be issued mid-April 2011, delayed
      –  Now expected to be issued by June 2012
24 Endorsing Organizations
of MSG Letters
Driving a Revolution in Conflict Free Minerals
                  2:00 PM | June 6, 2012




Carolyn Duran
Intel

Zoe McMahon
Hewlett-Packard
Conflict-Free Smelter Program
  www.conflictfreesmelter.org
Supply Chain Due Diligence
                                                                      Illustrative Supply Chain for Tin


                      2-4
                    trading
                     steps




Upstream due diligence              Smelters           Downstream due diligence
            Solutions for Hope




                                                                 Chain of Custody
             iTSCi In-Region
              Sourcing, PPA,




                                     Smelter Program




                                                                   EICC GeSI
                                                                    Program
                                      Conflict Free
                                       EICC/GeSI
Driving a Revolution in Conflict Free Minerals
                  2:00 PM | June 6, 2012




Dr. Litofe Sloj Silika
Efficient Care
Framework of the Exploitation of Conflict Minerals in Eastern Congo


                                                                                                Mines in Eastern Congo


                                                                                           Independent                              Congolese
Pressure Groups (Dodd-Frank, MNCs, Civil Society)




                                                                     Rebel Groups            Negative             Mining             Business            Rebel Groups
                                                                     from Uganda                                  MNCs                                   from Rwanda
                                                                                              Forces                                & Art Miners

                                                                 Support                                                                     Influence                   Support

                                                            Uganda                             Smuggled               Direct
                                                                           Smuggled                                                        DRC           Smuggled       Rwanda
                                                             Gov t                              Through                From
                                                                            Through                                                        Gov t          Through        Gov t
                                                                            Uganda                ???                DR Congo                             Rwanda



                                                                                                   Import & Export MNCs


                                                                                                          Smelters

                                                                                                                                                             Component
                                                                                                                                                            Manufacturers
                                                                                                                                                           and Assemblers




                                                                Toys                Auto            Electronics            Telcom              Tools            Aerospace




                                                                                                          Consumers
All supported
                                                                                                                     by Rwanda
                                                                                                                         Gov t

    General Laurent Nkudabatware              General Bosco Ntanganda                  Colonel Jules Mutebusi
          Congolese Warlord                      Congolese Warlord                       Congolese Warlord
     from/hiding in Rwanda (Tutsi)          from/hiding in Rwanda (Tutsi)           from/hiding in Rwanda (Tutsi)




                                                                                                                    All supported
                                                                                                                     by Uganda
                                                                                                                         Gov t



      Major General James Kazini
                                                  Lieutenant General                    General Salim Saleh
      from Uganda Army (dead)
                                                   Katunba Wamala                        from Uganda Army
                                                  from Uganda Army




                                                                                                                    Kony part of
                                                                                                                    Independent
                                                                                                                      Negative
                                                                                                                      Forces


           Jean-Pierre Bemba                                                                  Joseph Kony
                                                      Thomas Lubanga
from Congo, controlled by Uganda Gov t                                                  Terrorist & War Criminal
                                           from Congo, controlled by Uganda Gov t
    (arrested, waiting for trial at ICC)                                                from Uganda (in hiding)
                                                 (arrested, convicted by ICC)
Driving a Revolution in Conflict Free Minerals
                  2:00 PM | June 6, 2012




Max Karst
Pamoja Minerals
Resources

•    Conflict-Free Smelter Program
      –  http://www.conflictfreesmelter.org/
•    Public-Private Alliance (PPA) for Responsible Mineral Trade
      –  http://www.resolv.org/site-ppa/
•    OECD Due Diligence Guidance
      –  http://www.oecd.org/document/
         36/0,3746,en_2649_34889_44307940_1_1_1_1,00.html
•    ICGLR info on Natural Resources
      –  https://icglr.org/spip.php?article94
•    Solutions for Hope Project
      –  http://solutions-network.org/site-solutionsforhope/
Driving Revolution in Conflict-Free Materials

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Driving Revolution in Conflict-Free Materials

  • 1. DRIVING REVOLUTION IN CONFLICT-FREE MATERIALS Patricia Jurewicz, Responsible Sourcing Network Litofe Sloj Silika, Efficient Care Zoe McMahon, HP Carolyn Duran, Intel Max Karst, Pamoja Minerals
  • 2. Driving a Revolution in Conflict Free Minerals 2:00 PM | June 6, 2012
  • 3. Driving a Revolution in Conflict Free Minerals 2:00 PM | June 6, 2012 Speakers: Patricia Jurewicz, Director, Responsible Sourcing Network Dr. Litofe Sloj Silika, CEO/Business Development, Efficient Care, LLC Carolyn Duran, Materials EHS Manager, Intel Zoe McMahon, Director, Social & Environmental Sustainability, Hewlett-Packard Max Karst, President, Pamoja Minerals
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  • 6. Driving a Revolution in Conflict Free Minerals 2:00 PM | June 6, 2012 Patricia Jurewicz Responsible Sourcing Network Dr. Litofe Sloj Silika Efficient Care
  • 7. What Are “Conflict Minerals”? Conflict Minerals are currently defined to include: • Columbite-tantalite (Coltan) > Tantalum –  First conflict mineral – spiked by growth in cell phone industry –  DRC currently provides 8-20% of global production • Cassiterite > Tin –  DRC is worlds 6th largest producer – 3-4% of global production –  Primary funding source of rebel groups • Wolframite > Tungsten –  DRC is worlds 5th largest producer – 2-4% of global production • Gold > Gold –  DRC provides 1% of global production, second most significant funding source of rebel groups.
  • 8. Source: 2009 Mine (Primary) Production Russia Tungsten (4.1%) Gold (7.9%) Cobalt (10%) Canada Tantalum (3%) Europe Uzbekistan Tantalum (4%) Gold (3.6%) Tungsten (3.4%) Gold (4.3%) Cobalt (8.1%) China Cuba Cobalt (5.6%) Tin (37.5%) US Tantalum (13.5%) Gold (8.9%) Tungsten (81%) Ethiopia Gold (12.8%) Ghana Tantalum (8%) Cobalt (10%) Gold (3.6%) Brazil Nigeria Rwanda Tantalum (16-23%) Tantalum (9%) Tantalum (6-8%) Tin (3.9%) Dem Rep Congo Indonesia Peru Tin (3.9%) Mozambique Tin 32.6% Tantalum* (15-20%) Tantalum (3.4%) Tin (12.4%) Cobalt (40.3%) Gold (4.3%) Gold (7.7%) Zambia Cobalt (4%) S Africa Gold (8.9%) Tin (Bolivia) (5.2%) Australia Other Asia Tantalum (3.5%) Tantalum (4-5%) Gold (9.4%) Cobalt (10%) Notes •  Items in bold are when country production represents 10% or above •  Country production <3% are not shown on map •  Map reflects mine production (primary production) only; it does not reflect metal reserves or reserve base •  Data sources: US Geological Survey (2009, 2010), ENOUGH (2010), and input from member companies
  • 9. Conflict Minerals and the DRC Exploitation and trade of conflict Tin minerals originating in the Democratic Republic of the Congo (DRC) is helping to finance conflict with extreme levels of violence in the eastern DRC. This conflict has claimed more than 5.6 million lives since it began in the late 1990s. Mining activity is crucial to the DRC economy. Unfortunately, many mines in the east are controlled by militant groups causing serious social and environmental issues in the region.
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  • 21. Source: Electrical Non-electrical Overall Usage of the 3 T’s and Gold Tantalum (Ta) Tin (Sn) Tungsten (W) Gold (Au) 9% 36 30 40 % % % 60 64 70 91 % % % % Predominant industry Diversified across Predominant industry = Electronics industries, hard metals = Jewelry
  • 22. Metals in a Typical Laptop Metals represent around 36% of total product weight
  • 23. Provision 1502 on Conflict Minerals •  Public companies traded on the U.S. stock market are required to report annually to the U.S. Securities and Exchange Commission (SEC): –  Whether its products were produced with conflict minerals (3TG) that originated in the DRC or adjoining countries –  If they did come from the region, mine of origin –  If any of their products are not DRC conflict free •  The report must be audited by an independent private auditor and posted on the company external website •  Proposed rule issued in December 2010 –  Public comment throughout 2011 –  Was due to be issued mid-April 2011, delayed –  Now expected to be issued by June 2012
  • 25. Driving a Revolution in Conflict Free Minerals 2:00 PM | June 6, 2012 Carolyn Duran Intel Zoe McMahon Hewlett-Packard
  • 26. Conflict-Free Smelter Program www.conflictfreesmelter.org
  • 27. Supply Chain Due Diligence Illustrative Supply Chain for Tin 2-4 trading steps Upstream due diligence Smelters Downstream due diligence Solutions for Hope Chain of Custody iTSCi In-Region Sourcing, PPA, Smelter Program EICC GeSI Program Conflict Free EICC/GeSI
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  • 29. Driving a Revolution in Conflict Free Minerals 2:00 PM | June 6, 2012 Dr. Litofe Sloj Silika Efficient Care
  • 30. Framework of the Exploitation of Conflict Minerals in Eastern Congo Mines in Eastern Congo Independent Congolese Pressure Groups (Dodd-Frank, MNCs, Civil Society) Rebel Groups Negative Mining Business Rebel Groups from Uganda MNCs from Rwanda Forces & Art Miners Support Influence Support Uganda Smuggled Direct Smuggled DRC Smuggled Rwanda Gov t Through From Through Gov t Through Gov t Uganda ??? DR Congo Rwanda Import & Export MNCs Smelters Component Manufacturers and Assemblers Toys Auto Electronics Telcom Tools Aerospace Consumers
  • 31. All supported by Rwanda Gov t General Laurent Nkudabatware General Bosco Ntanganda Colonel Jules Mutebusi Congolese Warlord Congolese Warlord Congolese Warlord from/hiding in Rwanda (Tutsi) from/hiding in Rwanda (Tutsi) from/hiding in Rwanda (Tutsi) All supported by Uganda Gov t Major General James Kazini Lieutenant General General Salim Saleh from Uganda Army (dead) Katunba Wamala from Uganda Army from Uganda Army Kony part of Independent Negative Forces Jean-Pierre Bemba Joseph Kony Thomas Lubanga from Congo, controlled by Uganda Gov t Terrorist & War Criminal from Congo, controlled by Uganda Gov t (arrested, waiting for trial at ICC) from Uganda (in hiding) (arrested, convicted by ICC)
  • 32. Driving a Revolution in Conflict Free Minerals 2:00 PM | June 6, 2012 Max Karst Pamoja Minerals
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  • 38. Resources •  Conflict-Free Smelter Program –  http://www.conflictfreesmelter.org/ •  Public-Private Alliance (PPA) for Responsible Mineral Trade –  http://www.resolv.org/site-ppa/ •  OECD Due Diligence Guidance –  http://www.oecd.org/document/ 36/0,3746,en_2649_34889_44307940_1_1_1_1,00.html •  ICGLR info on Natural Resources –  https://icglr.org/spip.php?article94 •  Solutions for Hope Project –  http://solutions-network.org/site-solutionsforhope/