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During his CES keynote last night, Intel CEO Brian Krzanich announced that every chip his firm produces this year will be free of conflict minerals. It was a surprisingly somber turn at an event normally dedicated to the hype of new gadgets, but one that’s been a long time coming.
According to Krzanich, Intel, the world’s leading chip maker, has been working towards the goal of conflict mineral-free chips for four years. The announcement was backed by suitably bleak imagery: the huge stage displays showed images of dead bodies with “murdered” emblazoned across them. “The minerals are important, but not as important as the lives of the people who work to get them,” Krzanich said, which received plenty of applause from the room, and it’s hard to argue it wasn’t deserved.
Krzanich’s focus on conflict minerals came amid a speech touting Intel’s new technologies, including 3D scanners and Edison, a PC the size of an SD card. But the turn towards the dark roots of the electronic supply change is a welcome dose of reality for an industry that’s yet to truly coalesce around the issue.
Sub-Saharan Africa is home to a wealth of the rare earth elements that are crucial for our gadgets. And while we might never think about minerals like tantalum, which is used in the components of nearly every modern device, mining such minerals is huge business. That is, unless you’re a miner.
In the Democratic Republic of the Congo, which has seen decades of militant action, armed groups have fought over mines and resources since at least the mid-90s. Violence is endemic to mining activities in the region, with miners working for miniscule wages in unspeakable conditions and under the constant threat of death, which has given conflict minerals their name. High demand for rare earth elements has sent prices skyward, and tracing supply chains to their roots is difficult, especially as wholesalers try to get their hands on whatever supply they can.
Because the supply chain is so opaque, most major electronics manufacturers, from Apple to Nintendo, still have conflict minerals in their products, even if it’s unknowingly from a Chinese supplier. China, with its own massive thirst for rare earth minerals, has made huge investments in the African mining industry in a bid to secure its resource supply, a move that may help clean up the industry. At the same time, as we’ve seen in the gold and diamond industries, foreign investment in African mines often means wealth generated by mineral reserves is shuttled abroad.
There have been legal pushes to eliminate the use of conflict minerals in our gadgets, but it’s been the focus of pushback from pro-business groups in the US. As part of the Dodd-Frank financial reforms passed by Congress in 2010, some companies were required to disclose their use of conflict minerals (tin, tungsten, tantalum, and gold) from the Congo to the SEC. The law states that companies must comply within 270 days of the law passing, but that section has seen ongoing legal battles since its passage.
In September a group of plaintiffs, including the US Chamber of Commerce, a pair of other business groups, and a conservative lobbying group argued to the US Court of Appeals for the DC Circuit that such disclosures violate the First Amendment. The lawsuit, whose arguments continue, now features Amnesty International lending support to the rule.
“This First Amendment challenge to the Conflict Minerals Rule is particularly nefarious and is simply wrong. Companies can’t hide behind the First Amendment to avoid reporting factual information as part of securities disclosure requirements,” Steven Hawkins, executive director of Amnesty International USA, said in a release yesterday. [Read more]