New U.S. reporting requirements on sourcing “conflict minerals” create challenges and opportunities for companies.

You paid $100 for an organic heirloom turkey for your holiday table. Your fair trade coffee costs $16 per pound. And the hand-crocheted organic cotton blanket from a Peruvian co-op for your new baby niece? As much as $220 plus shipping.

Sustainable merchants have established strong niche markets for luxuries and incidentals. But what about an essential tool like your smart phone? Would you pay more if you could be sure its materials weren’t indirectly bankrolling human rights abuses in a distant frontier like the Democratic Republic of Congo?

New Reporting Requirements For Conflict Minerals

Creating a new economic framework amid anarchy is just one dilemma facing companies in the U.S. subject to new reporting requirements for “conflict minerals” by the Securities and Exchange Commission. These minerals are crucial to electronics and widely used in many products.

Other challenges: understanding and complying with the new federal reporting requirements, untangling complex global supply chains and quelling fears of both suppliers and customers.

As the DRC government and rebels consider a new round of ceasefire talks, companies are now determining whether to keep sourcing materials from the DRC under the new regulations, or source from other nations.

“It would be easier to just stay out of it,” said Michael Loch, director of supply-chain corporate responsibility for Schaumburg, IL.-based Motorola Solutions.

“But from a CSR standpoint, you don’t want to make a bad situation worse, “Loch said. “If there is enough momentum and people stay engaged, you can see how a legitimate pipeline can be established and eventually we will see this as a normal way of business.”

Companies See Compliance Challenges 

Other companies say the conflict minerals regulations penalize them for circumstances far beyond conflict mineralstheir influence. More than a year before the first conflict minerals report is due to the SEC in 2014, they are feeling the pinch from customers asking them to certify that their products are conflict-free.  Yet, they can’t see clearly down their supply chains back to the materials’ origins – often small “artisan” mines under the control of warlords.

“We do not want to purchase any components where the manufacturer purchases raw materials from the DRC region, “ said Michael Goeringer, president of Arc-Tronics, an Illinois-based circuit board manufacturer. “However, we have no mechanism to determine if they are doing that or not.”

Four materials – tin, tantalum, tungsten and gold – are covered by the new regulation, which was required in the 2010 Dodd-Frank Act. A percentage of the world’s supply comes from mines on the eastern frontier of the DRC, where millions have been killed or uprooted in a civil war that has persisted for more than a decade.

Next year, U.S. public companies will be required to report their use of “conflict minerals” exported from this tropical twilight zone in a new effort by policymakers to choke off the outlaws’ financing and establish a legitimate economy. They must report their audited findings to the SEC.

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Australia - Strategic Elements has kicked off rock chip and pan concentrate sampling at the Mt Rangitoto prospect on the West Coast of the South Island, New Zealand.

The company is targeting intrusion related gold, silver and rare metals around the historic Mt Rangitoto gold-silver mine.

The focus on intrusions is due to the large-scale nature of this style of deposit.

Mt Rangitoto, which forms part of the West Coast " Hohonu Project, comprises a high grade historic gold-silver mine and streams draining the mountain that contain high grade tungsten, tin, tantalum and niobium.

High grade gold samples of 21 grams per tonne (g/t), 29g/t and 32g/t have been reported from the Mt Rangitoto Mine.

High grade silver samples of 43g/t, 79g/t, 110g/t and 1,400g/t have also been discovered.

In previous pan concentrate sampling of the streams draining the mountain, grades of 1% tin and 1% tungsten have been returned.

The Mt Rangitoto Mine is believed to host gold in granite, with samples of 0.62g/t gold and 0.55g/t gold returned from previous exploration.

There is strong potential for metal to be sourced from a buried intrusion. Potential buried granite may preserve rare and precious metals.

Veins and silver in the mine increased with depth towards a granite.

Strategic Elements controls a large strategic area of over 1,350 square kilometres of highly prospective ground on the South Island.

The Hohonu Project covers over 10 separate intrusions with several primary areas of rare metal "rare earths, tungsten and tin " mineralisation.

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In this ‘insights from industry’ interview, Dr Yuri Zhuk, Technical Director at Hardide Coatings Ltd., talks to AZoM regarding the importance of seal reliability, especially in adverse conditions.

GT: Could you please provide a brief overview of Hardide and some of the new coatings that Hardide is producing?

YZ: Hardide Coatings Ltd, an advanced surface coating company, is a leading innovator in the development and production of metal surface coatings based on Tungsten Carbide. The company is currently producing the Hardide range of chemical vapour deposition (CVD) tungsten carbide / tungsten hard coatings, which have exciting and wide-ranging applications in industries including oil and gas, valves, pumps, aerospace and advanced engineering..

GT: What are the primary applications of these coatings?

YZ: Applications where wear, erosion, corrosion or chemically aggressive media cause component and tool or equipment downtime, failure or loss of performance. The coatings are hard, tough, flexible, ductile and impact resistant and can coat internal surfaces and complex geometries so can be used in many applications where traditional hard coatings are not suitable.

An important application of these CVD coatings is their use on mechanical seals for heavy-duty rotating equipment.

Rotating equipment, including turbines, compressors and pumps, use mechanical face seals to prevent leakage, whilst also excluding any abrasive media and lubricating the mechanical assemblies. The importance of seal reliability cannot be overstated when looking at overall equipment reliability, because seal failure results in the damage of costly equipment, and would also cause higher downtime costs.

GT: Which industries benefit from these coatings?

YZ: Primarily the oil, gas and chemical processing industries will benefit from Hardide’s CVD coatings for mechanical face seals. However, any industry that employs heavy-duty mechanical face seals will benefit, especially if these are employed in adverse conditions.. In particular, these coatings are used to make the ‘primary’ sealing surface durable and capable of resisting three-body abrasion, erosion and corrosion.

 GT: What materials are traditionally used on mechanical seals and what are the limitations of these?

YZ: Solid hard materials, such as ceramic, silicon carbide, or sintered tungsten carbide are frequently used. However, these materials have several significant limitations and disadvantages, which are listed below:

    They are brittle
    They are expensive and difficult to produce (especially if there are finer features included in the seal design)
    The thermal expansion properties of these materials can differ significantly from steel, leading to jamming with a change in temperature.

HVOF, plasma spray coatings (such as WC/Co), DLC and other PVD coatings are already used on mechanical seals. However, these are often not effective for heavy-duty seal applications. For example, WC/Co HVOF and plasma spray coatings contain hard WC grains in a soft cobalt binder. These coatings can become very rough in abrasive/corrosive environments due to the selective leaching or abrasion of the binder.

GT: How do the Hardide coatings address these common problems?

YZ: An even wear pattern is ensured by the uniform structure of Hardide coatings, so an optimum finish can last for longer without hard asperities forming. Both tungsten carbide and tungsten have excellent resistance to chemically aggressive/corrosive media, particularly acids. The coating might be further alloyed with small amounts of Fluorine or Fluorocarbons (as disclosed in Hardide patents), which can further enhance its mechanical properties.

An alternative approach is to manufacture the mechanical seal components out of steel and then coat with a hard coating. Using steel is beneficial for the following reasons:

    It is tough
    It is inexpensive
    It can lead to improved and larger ranges of seal design
    It is relatively easy to machine

GT: How does using CVD tungsten carbide coatings effect the lifespan of machinery?

YZ: It has been shown that the coatings can triple the operational life of critical parts in abrasive conditions. Mechanical face seals display similar, long-lasting results.

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BERLIN - Whether it is its solidly high price per ounce or maybe even the end-of-year visit of Her Majesty, Elizabeth II, to view British gold reserves at the Bank of England, conspiracy theories are proliferating around gold – particularly as (or so rumor has it) some kilo bars appeared in Great Britain that were filled with virtually valueless wolfram.

Some insiders even believe that a large portion of Germany’s gold reserves are in fact gold-coated wolfram (tungsten) bars. The sheer values involved – a standard 12.44 kg gold bar is presently worth 500,000 euros – go a long way to explaining the stubborn attachment to theories such as these, the spread of which are aided considerably by the Internet, reports Die Welt.

The precious metal had another strong week, with gold's spot price closing Friday at $1,687 per ounce.

Eugen Weinberg, who heads commodities research at Germany’s Commerzbank, says that he is certain that – if indeed there are any tungsten-filled bars at all out there – the number of them is exceedingly small.

German theorists’ fears are particularly fueled by the fact that, according to the German Federal Bank itself, only part of German gold reserves are actually in Germany: the bank says that “a good two thirds” of the 3,396 ton German reserves worth 145 billion euros are not actually stocked inside the country.

Among the rumors accompanying the nearly two-year upward trend in gold prices is that key national treasuries – not least Fort Knox in the United States – have now actually been emptied out. Another fashionable conspiracy theory sees price manipulation of the precious metal by a powerful international elite that controls the market.

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There are fresh hopes Cornwall's mining industry could be revived.

Test drills for tin and tungsten near Callington and Indian Queens are expected to start this year.

Companies New Age Exploration Limited and Treliver Minerals have acquired the rights to carry explore deposits underneath Kelly Bray near Callington and Treliver Manor Farm near Indian Queens respectively.

Similar work searching for tin, copper and zinc has already been carried out at South Crofty Mine in Camborne.

Chris Rogers, Mining Consultant for Redruth-based firm Cornwall Consultants, said: "It's to do with the economic heritage of the county, and obviously the future possible employment and wealth that might come from mining these deposits locally, and the benefit to the local communities.

"Obviously if they did find things, they'd have to go through mining and planning leases. They'd have to look at environmental constraints, they'd have to look at processing constraints, and the general viability of the deposits in these areas."

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Several business groups challenging new rules that require companies to disclose whether their products contain minerals blamed for fueling violence in Africa said Wednesday regulators hadn’t adequately analyzed the rules’ impact.

The groups said in court papers that the Securities and Exchange Commission had itself admitted it didn’t know if the rules would benefit the people of the Democratic Republic of the Congo and its surrounding region, the stated intent of Congress in creating the provision.

“Thus, the Commission violated its statutory obligations to apprise itself of the costs and benefits of the rule and the available regulatory alternatives before saddling U.S. public companies with billions of dollars in regulatory burdens,” the groups said. “This failure of analysis infects the entire rule.”

The U.S. Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable asked the U.S. Court of Appeals for the District of Columbia Circuit to vacate the “conflict-mineral” rules in October. The groups fully explained their arguments for the first time on Wednesday in a 75-page brief.

UPDATE: John Nester, a spokesman for the SEC, defended the Commission’s analysis in an email.

“We believe our legal interpretation and economic analysis are sound, and we look forward to defending the rule that Congress directed us to write,” Nester said.

The “conflict minerals” rules, which were mandated by the 2010 Dodd-Frank financial overhaul, have been a source of friction between the SEC and companies ever since the law was passed. Under the current rules, U.S.-listed companies are required to disclose whether their products have been manufactured with any tantalum, tin, gold or tungsten used to finance violence in central Africa.

Companies have said the requirement would be burdensome and expensive. In August, the SEC estimated the rules would cost companies a total of $3 billion to $4 billion upfront to comply, plus more than $200 million a year. The SEC also estimated around 6,000 U.S. and foreign companies would have to comply with the conflict-minerals rules, affecting manufacturers of a range of products, including smartphones, light bulbs and footwear.

On Wednesday, the groups said that the SEC’s estimates are actually low, and that a financial burden of that size shouldn’t be imposed without determining whether the rules will yield any benefits. The SEC’s lack of analysis, according to the groups, violates the Administrative Procedure Act and the agency’s heightened obligation under the Securities Exchange Act of 1934 to analyze the economic impact of its rules.

The groups also argued that the rules violate companies’ First Amendment rights by compelling them to publicly state their products are “not DRC conflict free,” that is, they contain conflict minerals.

“Even worse, this compelled disclosure will frequently be false,” the groups argued. “Many of the companies forced to make it will not be manufacturing products containing minerals that funded armed groups. Rather, the companies will simply be unable to trace their supply chains to determine the minerals’ origins.”

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Boundary County Commissioners will hold a public hearing at 9 a.m. Tuesday, February 19, n the conference room of the Extension Office behind the Boundary County Courthouse, to accept public comment on two appeals of Conditional Use Permit 11-063 granted Tungsten Holdings, Inc., to operate a gravel pit on a seven acre parcel, RP65N01W200150A, located 1.6 miles south of Porthill on the Farm to Market Road.

Patrick and Ada Gardiner and Bryan and Sara Ferguson are appealing the decision of the Boundary County Planning and Zoning Commission to grant that permit in a continuing battle that's been going on since 2005.

The application was initially submitted that year as a special use permit, and county commissioners, imposing several conditions and restrictions, overruled the planning and zoning commission's recommendation to deny the permit, granting approval and allowing the pit to go into production.

Pat and Ada Gardiner, cattle breeders who operate near the site, filed an appeal, citing, among other things, potential adverse effects to their herd as well as the potential damage to their water wells caused by blasting.

That appeal went all the way to the Idaho Supreme Court, which ruled in favor of the Gardiners, not so much on the merits of there case but because of inadequacies in the county zoning ordinance in effect at the time, which made no specific mention of gravel pits, but allowed consideration of any use proposed that was not a use by right, permitted use or conditional use as a special use. The Supreme Court ruled that the language was too vague to constitute meaningful land use planning and overturned the commissioner's decision on the permit and shutting down operation of the pit.

At the time, work was already underway on drafting a new county comprehensive plan and zoning ordinance, in which the placement of gravel pits and mines in the various zones were spelled out. In the agriculture/forestry zone district, which the parcel in question is zoned, such use was listed as a conditional use. Shortly after the new ordinance was adopted, Tungsten Holdings again made application, and the planning and zoning permit was approved, despite the same objections by the Gardiners and additional objection from Bryan and Sara Ferguson, who had purchased a 10-acre residential lot from Tungsten Holdings near the site and built a home based on perceived assurances in covenants and restrictions that attached to their land that no such use would be allowed in the un-platted subdivision developed by Tungsten around the pit subsequent to the initial issuance of the special use permit.

Further information on this application is available at the Planning and Zoning Office, Room 16 of the Courthouse, and the application and appeals are available for public review.

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Hunter Hillcoat is a mining analyst with Investec Securities in London. Before Investec, Hillcoat spent 7 years as an analyst with the Austock Group, as a resources analyst. Hillcoat has a BSc Honors in Geology from the University of the Witwatersrand in Johannesburg and an MBA from Curtin University of Technology. Investec recently revised their buy rating price target for Wolf Minerals Limited to 29.4p down from 31.6p.

Tungsten Investing News recently talked with Hillcoat regarding his coverage of Wolf Minerals. Wolf trades on the London exchange under WLFE and on the ASX under WLF.

Tungsten Investing News:  Your target price for Wolf dropped very slightly despite the company’s recent positive

WASHINGTON, Jan 16 - Business groups on Wednesday filed their most expansive case yet attacking a new U.S. securities rule that requires companies to determine if their products contain minerals from the war-torn Democratic Republic of Congo.

The lawsuit is one of several challenging rules from the Securities and Exchange Commission, including those mandated by the 2010 Dodd-Frank financial regulatory overhaul.

The National Association of Manufacturers, the U.S. Chamber of Commerce and Business Roundtable filed notice of their lawsuit last November but did not explain their case until Wednesday.

The groups based much of their case on an argument that has helped them win similar cases -- that the SEC did not adequately weigh the rule's costs and benefits before approving it, as rule-making procedures require.

In a brief filed in Washington federal appeals court, the groups said the SEC never determined whether the rule would provide any benefits to the people in Congo, and also estimated the rule could impose $3 billion to $4 billion of initial compliance costs on American businesses.

The groups echoed commission members who voted against the rule and said: "good intentions are no substitute for rigorous analysis, and the Commission's analysis here was woefully inadequate."

The groups also challenged several specific provisions of the rule, including one under which the SEC declined to grant exceptions for trace amounts of the minerals, which include gold, tin, tantalum or tungsten. Such minerals are used in everything from cans to cell phones and computers to medical equipment.

In approving the rule in August, the commission said it concluded it lacked the authority to adopt such an exception.

The groups said the rule also violated the First Amendment by requiring companies to disclose that certain of their products are "not DRC conflict free." Such a rule would compel companies to make "misleading and stigmatizing public statements linking their products to terrible human rights abuses," the groups said.

The SEC has until March 1 to file a response, according to the court docket.

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RENO, Nev., Jan. 16, 2013 -- Infrastructure Materials Corp. (the "Company") is pleased to announce a new copper-gold discovery at its Kope Scheelite Project (the "Project") in Nevada. The Company's wholly owned subsidiary, Silver Reserve Corp., has completed a preliminary review of assay and geochemical data from reverse circulation drilling on the Project to further delineate the potential of gold, copper, silver and lead mineralization on the Project.

Drilling has identified copper and gold mineralization hosted both in the intrusive and in adjacent sediments. In addition to those elements reported in this news release, a complex suite of anomalous elements including antimony, bismuth, cobalt, cadmium, gallium, germanium, molybdenum, indium, selenium, tellurium, tin and tungsten were found to form zones in and surrounding the mineralization.

About the Kope Scheelite Project

The Project consists of 101 mineral claims located in Mineral County, Nevada, approximately 11 miles northeast of the town of Mina. Previous exploration efforts include recent Time Domain Electro-Magnetic ("TDEM") surveys that offered evidence of the presence of conductive structures on the Project with potential mineralization present within a porphyry system.

The Kope Scheelite Project is located in the Walker Lane, a structural belt which prolifically hosts many significant deposits, including Nevada Copper Corp.'s recently developed Pumpkin Hollow deposits (total Measured and Indicated copper resource of 3.1 billion kilograms (6.8 billion pounds) for the combined Western and Eastern Deposits (Western Open-Pit Deposits: 664 million tonnes, averaging 0.37% Cu with a 0.15% cutoff; and Eastern Underground Deposits: 45.9 million tonnes averaging 1.45% Cu with a 0.75% cutoff - news release dated October 19, 2012).

Infrastructure Materials Corp. believes the Pumpkin Hollow deposits are an analogue for the copper mineralization at the Company's Kope Scheelite Project. Initial exploration appears to indicate that the Kope Scheelite Project may have some higher grade gold mineralization that in places differentiates it from the mineralization style at Pumpkin Hollow. Pumpkin Hollow and the nearby Yerington mine are located approximately 100km (60 miles) northwest of the Kope Scheelite Project. The historical Yerington mine, operated by Anaconda from 1953 to 1978, produced more than 147 million tonnes (162 million tons) of ore grading 0.6% copper.

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