Dodd-Frank Conflict Minerals Law: Headaches for Metal Supply Chains

- November 20, 2012 4:11 AM
Categories: Jason Busch, Lisa Reisman, Metal Miner, Supply Chain |

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Today on Spend Matters, we feature an excerpt from a recent PRO analysis authored by metals sourcing expert, Lisa Reisman: Dodd-Frank Conflict Minerals Law: Headaches for Metal Supply Chains.

As the old adage goes, “the devil lies in the details” – and that aptly describes the challenge many diversified US manufacturers find in meeting the new conflict-free minerals compliance requirements under the Dodd-Frank legislation.

What seems straightforward enough – avoiding the 3Ts (tin, tungsten and tantalum) – actually becomes more challenging when one considers the wide array of semi-finished materials companies purchase.

If that wasn’t complex enough, add in the actual “approach” companies take to implement the rules – supplier vs. part level – and we can see why companies will need 18 months to comply.

Vanilla Steel, Simple – Right?

One might jump to the conclusion that the 3Ts don’t apply to many diversified manufacturing organizations (we don’t often come across organizations that purchase tin, tungsten or tantalum in raw or semi-finished forms), but that conclusion would likely mask the more complex subtleties of implementing Dodd-Frank reforms.

Obviously a company that purchases a product such as tinplate (think Campbell’s Soup) will need to comply with the legislation. But how does the legislation impact a company that purchases ‘vanilla’ hot-rolled steel coil (HRC)?

If the buying organization has approached the conflict mineral-free requirement by implementing a solution at the supplier level (similar to how the electronics industry and the EICC approach the issue), as opposed to a more onerous case-by-case product/SKU level-compliant validation process, the buyer of HRC from an integrated steel producer faces additional steps. They will also require additional documentation from the supply base.

We know that ‘vanilla’ HRC does not contain any of the 3Ts, but if the company purchases HRC from an integrated steel producer that also produces tinplate, the buying organization will need to take extra care in validating that the integrated steel company does not use conflict minerals in any of its products… [continued on PRO].

Again, contact Sheena Moore (smoore (at) spendmatters (dot) com) for a free seven-day trial of our PRO service.

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- Jason Busch

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