Suppliers warned about 'conflict minerals'
2011-05-05 17:47:15 [Print]
New disclosure rules for minerals from war-torn Africa could impose a major burden on auto suppliers.
Six of the largest automakers have warned suppliers to prepare for federal regulations requiring them to disclose whether they use "conflict minerals" in auto parts.
The joint letter from the heads of purchasing from General Motors Co., Ford Motor Co., Chrysler Group LLC, Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. told suppliers that the rule will require them to disclose the use of minerals from the Democratic Republic of the Congo and neighboring countries.
The regulation reflects growing concern that minerals — gold, tin, tantalum, tungsten, coltan and niobium — are bankrolling wars in eastern Congo in sub-Saharan Africa. Congress maintains the minerals are helping to fund "extreme levels of violence."
Ann Wilson, senior vice president of government affairs of the Motor & Equipment Manufacturers Association, said the rule's impact on suppliers will be significant.
"No one is arguing that there are not serious problems in the Congo," Wilson said. "But to put this burden on the industry to determine where raw materials come from down the supply chain is going to be very difficult."
The automakers told suppliers they want to avoid using the minerals.
"We recognize that it may be difficult for your company to identify the company or mine of origin for the minerals that you use," the automakers wrote. "For this reason, we want to make you aware well in advance of the effective date of the requirements and reporting."
The National Association of Manufacturers says the new rule, which is to take effect in August, could cost the manufacturing sector $9 billion to $16 billion to implement.
Ford's manager for supply chain sustainability, Monique Oxender, told the Securities and Exchange Commission that automobiles have thousands of parts — "and most contain multiple materials."
"We anticipate significant investments in new training processes for our suppliers and investment in additional staff to implement and monitor compliance," she said.
Six of the largest automakers have warned suppliers to prepare for federal regulations requiring them to disclose whether they use "conflict minerals" in auto parts.
The joint letter from the heads of purchasing from General Motors Co., Ford Motor Co., Chrysler Group LLC, Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. told suppliers that the rule will require them to disclose the use of minerals from the Democratic Republic of the Congo and neighboring countries.
The regulation reflects growing concern that minerals — gold, tin, tantalum, tungsten, coltan and niobium — are bankrolling wars in eastern Congo in sub-Saharan Africa. Congress maintains the minerals are helping to fund "extreme levels of violence."
Ann Wilson, senior vice president of government affairs of the Motor & Equipment Manufacturers Association, said the rule's impact on suppliers will be significant.
"No one is arguing that there are not serious problems in the Congo," Wilson said. "But to put this burden on the industry to determine where raw materials come from down the supply chain is going to be very difficult."
The automakers told suppliers they want to avoid using the minerals.
"We recognize that it may be difficult for your company to identify the company or mine of origin for the minerals that you use," the automakers wrote. "For this reason, we want to make you aware well in advance of the effective date of the requirements and reporting."
The National Association of Manufacturers says the new rule, which is to take effect in August, could cost the manufacturing sector $9 billion to $16 billion to implement.
Ford's manager for supply chain sustainability, Monique Oxender, told the Securities and Exchange Commission that automobiles have thousands of parts — "and most contain multiple materials."
"We anticipate significant investments in new training processes for our suppliers and investment in additional staff to implement and monitor compliance," she said.
Tungsten Ore WO3 50%min FOB Africa
Unit:USD/dmtu
China tungsten concentrate producers' operating rate statistics by province by month
Unit: %
