GAO: Most companies unable to track down ‘conflict minerals’

Less than half of all companies required to track down the source of key minerals potentially central to war-torn parts of Africa have been able to do so, according to a new government study.

The Government Accountability Office (GAO) reported on Tuesday that 67 percent of companies that rely on so-called “conflict minerals” to make products have been unable to determine whether their supply has come from parts of Africa where armed groups profit from their production.

{mosads}The Securities and Exchange Commission (SEC) wrote rules in 2012 requiring companies that rely on gold, tantalum, tin or tungsten to try and determine whether their minerals came from the Democratic Republic of the Congo or adjoining areas. The new rules were mandated by the Dodd-Frank financial reform law, and were aimed at curbing the use of minerals from conflict-torn regions of Africa, in an effort to deprive funds from militant groups in the region.

But the GAO found that so far, the results have been underwhelming. Of the 33 percent of companies that were able to determine where their minerals came from, 24 percent said they did not come from the region in question. Three percent did not say where the minerals came from, two percent said they relied on scrap or recycled sources, and just four percent said their minerals came from the troubled area.

Of the small sampling that did admit to using conflict minerals, those companies said they were taking steps to address the matter, such as requiring suppliers to certify using conflict-free minerals in the future, or seeking other suppliers for business.

GAO said that the companies that were unable to identify the point of origin for their minerals often complained of a complex chain of suppliers that made it difficult to nail down the information.

While 99 percent of companies made inquiries about the source of those minerals, less than half said they received responses from suppliers on the matter. Others said their suppliers were unable to provide the information, or provided incomplete information.

Even among the small sampling of companies that reported using minerals from conflict regions, no company was able to determine if the purchase of those minerals financed armed groups in that region.

Under original SEC rules, companies would have been required to publicly disclose their findings, but that portion of the rule was struck down by a D.C. court.

GAO examined a sample of 147 reports from companies, out of more than 1300 that have so far been filed.