OAKLAND, CA — Meeting the demands of a new U.S. law on conflict minerals will pose new costs and challenges to companies, but will also bring more transparency and supply chain standardization, while keeping less money from being funneled to violence-plagued areas.

One of the main things companies should do is act as soon as possible on the conflict mineral requirements of last year's financial reform bill, said Rory King, director of global product marketing for IHS, an information and analysis firm.

King and fellow IHS senior content solution strategist Scott Wilson laid out the steps companies should take regarding conflict minerals during a GreenBiz.com webcast, Green Products and Supply Chain Disruption: Conflict Minerals in the Supply Chain, sponsored by IHS.

Under the new law, companies must disclose to the Securities and Exchange Commission if they have potential conflict minerals in their supply chains from the Democratic Republic of Congo or other sources of conflict minerals. 

The law specifically points to the Democratic Republic of the Congo as a major source of conflict minerals. While the country is awash in natural resources with a mineral value of $10-24 trillion, Congo's gross domestic product is half that of Vermont, said Andrew Reese, editor of Supply & Demand Chain Executive magazine.

"The country has basically been in a state of conflict for more than 15 years in one way or another," Reese said. Corruption, slavery, child labor and rape are widespread, with armed groups controlling most of the major mines. 

The minerals in question are or are used to make tin, coltan, tantalum, tungsten, gold and other derivatives. While the issue of blood diamonds has made the jewelry industry a particular target for removing conflict minerals, most of the minerals here are used to make various electronics parts.

An IHS survey of companies found than just over half were even aware of the conflict minerals law. "A lot of companies don't have the processes in place to identify all of the regulations and anticipate the regulations that are being developed that will affect supply chains," Wilson said.