Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
The Congo has been dominated by warlords who slaughter innocent people and take their land, rich in highly demanded minerals.
After a two-year warning given to US companies by regulators to come forward and disclose whether their products contain minerals thought to fuel armed conflicts in central Africa, several firms still say they are not sure.
In an effort to curb the imports of minerals fuelling armed conflict in African nations, the US and the Securities and Exchange Commission (SEC) rules requiring manufacturers to report where their tantalum, tin, gold and tungsten supplies come from.
The ruling, which came into force Monday, also requires companies to disclose payments made to overseas governments to develop natural gas.
The first statements however evidence that several firms are taking advantage of a provision that allows them to declare they don’t know the source of the metals they use.
These firms get an A+
Some tech giants that have taken a lead on this issue, such as Intel, Apple and HP, filed in-depth reports last week. Others large-size firm, including Toyota, Canon, Tata Motors, Herman Miller, Soda Stream, Oracle, and Texas Instruments, have also filed their reports, but they are quite vague.
A study published in April by PricewaterhouseCoopers showed that only 4% of the 700 companies surveyed across 15 industries had completed a draft of their SEC conflict minerals filings.
Intel, which announced in January it had enter the new year with the goal of making sure its supplies are fully “conflict-free,” said the first internal audit showed some of its products are “DRC conflict undeterminable.” For its remaining products, Intel states that they passed the test with flying colours.
Apple, which has been publishing quarterly smelter reports, said the majority of them and also its refiners in its supply chain are either designated “conflict free” by the Conflict-Free Smelter Program (CFSP) or an equivalent independent third-party audit program, or are undergoing conflict minerals audits.
HP, also working with the CFSP, stated that only 60 of its 201 smelters have been accredited as conflict free.
The rules, part of the 2010 Dodd Frank Act that emerged in the wake of the financial crisis, directly affects about 6,000 companies, who are in turn demanding answers on conflict minerals from a further 250,000 or so suppliers.
The SEC estimated conflict-mineral reports would cost companies up to $4 billion in the first year, and drop to between $200 million and $600 million in later years.
In March the US Court of Appeals for the District of Columbia struck down part of the directive. It ruled that forcing companies to list their products as “conflict free,” or not, as the rule had required, violated their First Amendment right to free speech. The audits, however, are still required, and their conclusions, even when inconclusive, will have to be filed with the SEC.
Image courtesy of ENOUGH Project.
