Apple Reports on Its Sources of 'Conflict Minerals'

By Dow Jones Business News, 
A A A


By Don Clark

Apple Inc. said it believes most of its sources of four minerals associated with war-torn parts of Africa comply with standards designed to prevent money from going to violent militia groups.

The consumer electronics giant, one of many companies subject to a June 2 deadline to file reports on what are called "conflict minerals," reported that 21 smelters and refiners were identified as sources of minerals that originated in the Democratic Republic of the Congo or adjoining countries. Most of the fighting has taken place in the DRC.

Of those 21 suppliers, Apple said, 17 were found to have gone through third-party audits to track the sources of their materials. The remaining four haven't yet undertaken an audit.

Based on a third-party review of publicly available information that Apple commissioned, the company said it "found no reasonable basis" to conclude that any of the purchases by the smelters and refiners directly or indirectly helped finance or benefit armed groups.

But Apple said it would continue to drive the four smelters and refiners to comply with the audit requirements or require its suppliers to remove them from its supply chain.

Apple's report was filed with the Securities and Exchange Commission. The reporting requirements, part of the 2010 Dodd-Frank Act, relate to products that use tin, gold, tantalum and tungsten. Other companies that have filed conflict mineral reports so far include Intel Corp. and Hewlett-Packard Co.

The Silicon Valley company and some of its peers have identified smelters and refiners--rather than individual mines--as the most practical place to enforce restrictions, said Paul Martyn, vice president at BravoSolution, a Chicago-based software and services company that specializes in issues affecting supply chains.

Apple, Intel and some others also are trying not to bar all purchases from the DRC, because many mines there don't deserve to be discriminated against, Mr. Martyn said. Those companies contend that determining "who the bad guys are" is a job best left to refiners and smelters, he said.

Apple's report says the company in 2010 became one of the first to begin mapping its supply chain to the smelter or refiner level to track sources of the four minerals. The company says it is pushing smelters and refiners to comply with standards set by the Conflict-Free Sourcing Initiative or other third-party audit programs.

The company said it has surveyed more than 400 suppliers in its efforts, identifying 205 smelters and refiners of conflict minerals for 2013. Apple personnel also conducted on-site visits of smelters and refiners, the report states, in part to help them prepare for and undergo conflict mineral audits.

Where particular smelters or refiners were unwilling to engage with Apple or seek compliance with third-party monitoring organizations, Apple said it required its suppliers to terminate their relationships with those smelters and refiners.

Despite its efforts, Apple said it doesn't have sufficient information to conclusively determine the country of origin of conflict minerals that are in its products or whether they are from recycled or scrap sources.

Write to Don Clark at don.clark@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


  (END) Dow Jones Newswires
  05-29-141926ET
  Copyright (c) 2014 Dow Jones & Company, Inc.


This article appears in: Commodities

Referenced Stocks: AAPL , INTC

Dow Jones Business News


More from Dow Jones Business News:

Related Videos

Cheap Ways to Sleep Better
Cheap Ways to Sleep Better          

Stocks

Referenced

Most Active by Volume

105,679,298
  • $16.13 ▼ 0.19%
43,130,824
  • $101.32 ▲ 0.74%
24,108,376
  • $59.80 ▲ 7.34%
22,524,427
  • $26.15 ▼ 1.06%
22,194,114
  • $24.65 ▼ 0.96%
21,835,360
  • $99.05 ▲ 0.15%
20,872,575
  • $34.94 ▼ 0.60%
20,561,803
    $74.57 unch
As of 8/22/2014, 04:02 PM