Companies Ill-Prepared for US Conflict Mineral Compliance,Companies Ill-Prepared for US Conflict Mineral Compliance

New data gathered by IHS Inc. shows that many global electronics component manufacturers are unprepared to deal with upcoming United States federal government regulations regarding conflict minerals. Under the ruling, companies doing business in the U.S. are required to report any use of so-called conflict minerals sourced from Africa.

These protocols were established in 2012 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Initial reporting of conflict minerals is to begin May 2014 by publicly traded companies.

A December IHS webinar concluded that 42% of participating companies are uncertain what to do. Twenty-two percent of that percentage are unsure how to meet the impending regulations, and the remaining 20% stated they were in the process of creating a plan. The surveyed companies included 162 firms from five global regions.

According to IHS, the largest concern is about being able to comply with U.S. regulations with a tight deadline. The second largest concern was losing clients. However, a majority of the companies expressed the fact that they do want assistance in gathering information on conflict minerals from their suppliers — something the U.S. regulations could help push forward.

The materials being mined include tin, tantalum, tungsten and gold. These materials are extensively used in the electronics market, from cellphones to pacemakers. The IHS estimates that $93 million worth of tantalum was used for smartphones in 2012.

While the regulations affect publicly traded U.S. companies, electronic material companies operate on a global scale. According to an IHS press release, this could mean a high likelihood that multiple supply-chain partners will require the sourcing information of conflict minerals.

For more information, visit IHS.