Testing their metal: The new tech sector focus on conflict minerals
Intel made tremendous strides over the past seven years in eliminating so-called conflict — aka "blood" — minerals from much of its product line. But even though it has pretty much met its own commitment, don’t expect the microprocessor giant to back off its awareness campaign.
Now, Intel is encouraging other tech organizations to become far more aggressive about shunning tin, tantalum, gold and tungsten mined from unverified sources in the Democratic Republic of the Congo.
Apparently, you also can add cobalt to the list. A new report published this week by Amnesty International links the mineral to the use of child labor across the Congo, which contributes almost half the world’s supply.
Cobalt is commonly used in lithium-ion batteries, such as the type found in smartphones and electric cars. This ore is being sold to China’s Huayou Cobalt, which may touch the supply chains of companies including Apple, Microsoft and Samsung, according to the non-governmental organization.
"Not only are state officials aware of the mining activities taking place in unauthorized locations, but they also financially benefit from them," alleged Amnesty International in its report. "Officials from a range of different government and security agencies control access to unauthorized mining sites and demand illegal payments from artisanal miners."
It’s no secret that the profits from high-value mineral supplies originating in certain areas of the world, especially the Congo, have been linked to armed conflict and human rights violations. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act included a provision for publicly traded companies to account for the sources of high-value minerals.
Intel was one of the first U.S. tech companies to take a leadership role in committing to ensuring its supply is "conflict free." It is doing so by sharing best practices for validating smelters and other supply chain partners so other tech companies can accelerate their own progress. What’s more, it is embarking on an awareness campaign that educates more consumers, especially millennials, about the problem.
It turns out a minority of Americans ages 18 to 35 (only 35 percent) have heard about conflict minerals, according to an Intel survey (PDF) published in December. But after being educated about the topic, they want more companies to take action, the data show.
"This generation is looking to us to do the right thing," wrote Carolyn Duran, Intel’s supply chain director and conflict minerals program manager, in a recent blog post. "In fact, after being educated about the issue of conflict minerals, more than half of millennials said they believe technology companies are responsible for taking action on the issue of conflict minerals — more than mineral suppliers, governments, consumers or NGOs. The question isn’t will millennials care about this topic, but when."
Duran estimated that less than 4 percent of the world supply for tin, gold and tungsten comes from the Congo. Tantalum is a very different story: Anywhere from 8 percent to 20 percent of this metal can be traced back to mines there. Considering that almost 70 percent of the world’s tantalum winds up in smartphones, notebook computers, televisions and other consumer electronics product, that’s an issue.
Rather than simply cutting the country out of its supply chain, a policy that would be devastating to legitimate suppliers, Intel embarked on a mission in 2009 to convince smelters to validate their sources. Focusing on these middlemen is instrumental for the success of any conflict-free program, Duran believes. Once something it melted down, it’s far more difficult to determine its source.
So far, more than 200 facilities around the worldwide have been educated in processes for gathering country of origin information and 40 more are completing the process, she said. "Any ore that is mined must be refined. … People are putting the right systems in place," Duran said.
Refining the process
Intel isn’t doing this all by itself. One primary ally in the fight is the Conflict-Free Sourcing Initiative, which Intel helped co-found along with members of the Electronic Industry Citizenship Coalition and the Global e-Sustainability Initiative. Over the past several years, the processes that Intel developed to approach its own smelter partners eventually became the framework for CFSI’s Conflict-Free Smelter Program.
Currently, this isn’t a super high-tech proposition: the focus is on "tagging" validated ore and then sorting it into approved bags that can be identified easily up and down the supply chain. In essence, the focus is on creating a better paper trail for certified miners — smelters are encouraged to buy only from those sources. The challenge is to enforce this policy without penalizing legitimate miners that don’t have the resources to pay for an official audit, Duran said.
Becoming part of CFSI isn’t free: an annual company membership is $5,000, which could be daunting for smaller smelters and refiners. But CFSI encourages initial facility audits through financial incentives for the initial process. The first fund was created by Apple, General Electric, Hewlett-Packard, Intel and Microsoft. Since then, companies including Best Buy, Ford Motor Co., Google and Lockheed Martin also have contributed to the pool.
Other validation resources (most focused on specific minerals) seeking to promote legitimate sources include:
Aside from Intel, other technology companies working hard to improve transparency include Apple (PDF), Hewlett Packard (PDF) (before its split) and Samsung (PDF). But generally speaking, Amnesty International hasn’t been impressed with progress. Its April assessment of conflict mineral reports issued by 100 companies suggest that 79 percent fell short of meeting the reporting requirements. Among the companies on that list: Amazon, Apple and IBM.