AFRICA – Intel Corporation will from the second quarter of 2016 ship mobile phones and other electronic items manufactured using “conflict-free” minerals.
The American firm’s products will bear conflict-free labels showing they do not contain minerals that directly or indirectly finance armed groups in the Democratic Republic of Congo.
Intel said it has for at least five years voluntarily streamlined the supply chain, in the process ensuring sources of raw materials are known to avoid minerals fuelling conflict in eastern DRC, Uganda, Rwanda and Burundi.
The US Securities and Exchange Commission rules require products of companies to contain conflict-free tin, tantalum, tungsten — known as the 3Ts — and gold.
Militias and rebel groups routinely fund their violent conflict activities with money derived from the sale of 3Ts and gold.
A section of the Dodd-Frank Act, signed into law by President Barrack Obama in 2010 and implemented in 2013, aims to make it mandatory for all US public companies to go the same route.
Everything from laptops, phones, and tablets to cars, aeroplanes, lighting, and jewellery contain the minerals.
Brian Krzanich, chief executive officer of Intel, said the firm’s chips became conflict free in 2014 and the company is moving beyond micro processors to achieve its goal of validating broader product base.
“You can look for the conflict-free symbol on all of our products starting in the second quarter of this year,’’ he said. Intel sells modems, networking components, processors that go inside servers, computers and mobile devices.
The conflict-free symbol does not, however, cover Altera Corporation, a designer of specialised computer chips.
Intel completed acquisition of the California-based company for $16.7 billion in December 2015.
“Our efforts show we can influence entirely new and different ways of doing business that improve the human experience,” Mr Krznich said. Intel is able to influence the market as it is a large commercial consumer of tantalum.
Intel began work to eliminate use of minerals from DRC’s militarised mines in 2009 after the firm heard about abuses stemming from the predatory activities of the militias. Minerals were a major source of revenue for the armed groups, generating approximately $185 million per year.
Before 2011, armed groups involved in mining could still sell to the electronics supply chain. In 2009, tantalum mined in Kivu and Katanga sold at $132 per kilogramme whether it was conflict- free or not.
Electronic firms, smelters and other end-users bought tantalum in 2009 without question. Now, groups unable to sell to Western electronics supply chains, dispose of tantalum to Chinese buyers for a discount of 30 to 60 per cent.
Intel’s supply chain director Carolyn Duran and her team, has visited over 86 smelters in an initiative aimed at starving the armed gangs of revenue. All smelters whose products are used in Intel’s microprocessors are conflict-free, having been certified in many cases by third-party audits.
Others are certified through direct observation. Over 97 smelters in Intel’s supply chain are certified.
Intel’s auditing process requires smelters to have a management commitment to a conflict minerals policy. The smelters need to understand the transactional history.
For recycled materials, they need to demonstrate that they are from a certified recycler. When using ore, smelters need to trace it back to the individual mine it came from.
Intel, Hewlett-Packard (HP) and Apple Inc are among the companies that have been instrumental in pressuring smelters to go conflict-free. This entails dealing in DRC with a defined set of conflict-free enterprises.
“There is steady progress in moving armed groups away from profiting from most lucrative activities,” said Sasha Lezhnev, policy director of Enough Project, which helps Intel and other firms with conflict-free sourcing.