Minerals such as tin, tungsten, tantalum and gold are valuable and essential for companies producing goods like consumer electronics and medical equipment. However, such products are often sourced from the Democratic Republic of the Congo (DRC), much of which is controlled by armed groups that  force locals to work in mines without pay and commit violence against civilians. It can be extremely difficult for large companies to realize they are purchasing "conflict minerals" from these areas and supporting rebel groups, especially if they obtain the minerals through multiple suppliers and have lengthy and complex supply chains.

Conflict mineral sourcing may cost companies

It has become more difficult for businesses to procure these important components in recent months, as a provision of the Dodd-Frank Act requires companies to reveal whether they use conflict minerals from this area in their products. Businesses that use these minerals must gather information on their sourcing processes in 2013 and file it with the Securities and Exchange Commission (SEC) by May 2014.

The provision in the law requires businesses to take multiple steps when submitting information to the SEC. Companies must first reveal if they do use any raw materials that could be considered conflict minerals and then determine whether they were sourced from the DRC or a nearby area. Those firms that determine their minerals did not come from this region need to reveal what steps they took to prove their minerals aren't from war-torn regions, while those that do procure minerals from the DRC (and those that cannot determine where their minerals are from) will be required to trace their supply chains, reveal their suppliers and provide a conflict mineral report.

Strategic sourcing can stop the problem

Businesses that do currently source minerals from these areas may find continuing to do so will result in problems as increased legislation and requirements aim to limit the problem. This may cause more companies to look for ways they can alter their supply chains to avoid purchasing conflict minerals and reporting their use to the SEC. Implementing policies like strategic sourcing initiatives may help businesses procure minerals without supporting armed groups. Taking steps to improve sourcing efforts can also help a company better optimize its supply chain and ensure all suppliers and logistical operations are working together seamlessly, which can also assist cost savings efforts.

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Northcliff Resources (NCF-T) has shone a spotlight on its Sisson tungsten-molybdenum project in New Brunswick with a feasibility study yesterday confirming it could economically mine the deposit for 27 years, sending its shares climbing.

High flying W Resources this morning revealed it had secured ‘time critical’ financing to move forward with the La Parilla tungsten tailings project.

The AIM quoted firm, which has gained as much as 350% this month, is issuing 122mln new shares at 0.7p per share, raising £858,500.

Chairman Michael Masterman is among the investors in the placing. He has subscribed for 14.2mln new shares for a total investment of £100,000.

Last week the La Parrilla tailings project was signed off by the authorities in Spain and the company said first tungsten production would come later this year.

W Resources will process 330,000 tonnes of material each year to produce 28,000 tonnes of tungsten and 26 tonnes of tin. This is expected to generate around €7 million per year revenue, at current prices.

The company’s shares were also boosted this week by positive drill results on Monday, which showed tungsten grades three times higher than previous results.

A JORC compliant resource update is expected later this year, in the second quarter.

On AIM today W Resources shares were up 0.14p, or 11%, trading at 1.35p.

Tungsten Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
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Raw materials are in the headlines again, and it's not for rising costs this time. Instead, electronic companies are scrambling to meet the January 31 Securities & Exchange Commission deadline for reporting on "conflict minerals" -- gold, tin, tantalum, and tungsten -- that have entered the supply chain.

It isn't as simple as filling out a quick form and forgetting about it; most companies lack the information, processes, and technology needed to adhere to the new SEC reporting standard. Compliance won't be easy or cheap. According to Deloitte, "The SEC has estimated it will cost U.S. businesses between $3 billion and $4 billion to implement processes to comply with "the rule."

Right now, affected companies are asking suppliers these seemingly basic questions:

    Do you provide our company with any products manufactured with tin, tantalum, tungsten, gold, or any other conflict minerals?

    If so, do you source any raw materials from the Democratic Republic of the Congo or surrounding regions?

Yet, the answers are nearly impossible to find. At the heart of the problem is supplier relationship management 101. Companies have relied, for too long, on incomplete supplier data that is scattered throughout various ERP and SRM tools -- or worse, hidden away in filing cabinets. Coupled with Tier-1 and Tier-2 suppliers thousands of miles away, the biggest tech companies are disconnected from what's really going on throughout the supply chain.

Tungsten Manufacturer & Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
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