AMELIA ISLAND, Fla.
Service centers will be affected by the conflict minerals
reporting requirements coming into force in 2014 as many of
their customers are subject to the rules, according to Copper
and Brass Fabricators Council government affairs counsel John
The rules affect all publicly
listed companies, and while service centers arent all
publicly listed many of the companies they supply are, he said
at the Copper and Brass Servicenter Association (CBSA) annual
conference in Amelia Island.
"Non-public companies are
clearly affected because the publicly traded companies are
clearly going to put pressure up the supply chain (because of
their requirement to report the origin of conflict minerals in
their products)," Arnett said.
The first reports are due to the
U.S. Securities and Exchange Commission May 31, 2014, covering
product produced in 2013. Arnett said companies must act now to
prepare information for the 2014 reports.
While there is no specific
penalty for failing to report, the intent is to put pressure on
brand-name companies to restrict the use of conflict minerals
from the Democratic Republic of the Congo and surrounding
As expected, some of the
brand-name companiesincluding Boeing Co., Chicago; Ford
Motor Co., Dearborn, Mich.; General Motors Co., Detroit;
Hewlett-Packard Co., Palo Alto, Calif.; IBM Corp., Armonk,
N.Y.; and Motorola Inc., Schaumburg, Ill.have made
enormous efforts to be able to report that their products are
conflict free, Arnett said.
In order to remain conflict
free, brand-name companies will be making demands up the supply
chainflowing from finished goods manufacturers through
distributors and intermediate manufacturers to smelters and
finally minesto provide such declarations, he said. "This
is a burdensome, burdensome rule that affects the whole of the
Distributor and mill
representatives at the CBSA conference expressed their
dissatisfaction with having to take on the additional burden.
"Its created a paperwork monster for distributors," one
Conflict minerals include
cassiterite, columbite-tantalite (coltan), gold and wolframite,
as well as derivatives tantalum, tin and tungsten.
Conflict minerals in service
centers products come under the scope of the rules only
if they are "necessary to the production or functionality of
the product," Arnett said, noting that intentionally adding
these alloying elements would indicate that the minerals were
necessary to the functionality. In the case of copper and brass
products, only those specifying tin as an alloying element (a
minimum or range) are within the scope of the rule. Product is
deemed conflict free if sourced solely from scrap or recycled
In order to determine what
action is necessary, Arnett said companies should follow a
four-step process: determine applicability, perform initial
setup and company analysis, conduct a reasonable
country-of-origin inquiry and, if necessary, perform due