Smelters face more scrutiny from EU

Due-diligence system to apply

SMELTERS and refiners in Europe that import minerals would be required to limit the risk of such trade funding armed groups in conflict zones under draft legislation approved by the European Parliament.

The EU assembly voted yesterday to force smelters and refiners that process and import minerals and concentrates to apply a due-diligence system regarding sourcing from strife-torn areas such as the Democratic Republic of Congo.

The step by the 28-nation parliament in Strasbourg, France, tightens a March 2014 proposal by EU regulators for a purely voluntary certification system to encourage the responsible importing of tin, tantalum, tungsten and gold. The law would take the form of a regulation, directly applicable across the bloc.

“European smelters and refiners are key actors in the supply chain,” said Iuliu Winkler, a Romanian member who steered the draft law through the EU Parliament. “Compliance with this regulation should be mandatory for them.”

The draft law also needs the support of EU governments, which have yet to give their verdict. They may seek a common position among themselves in the second half of the year. Any differences between the governments on the one hand and the EU Parliament on the other would have to be ironed out in negotiations.

Europe is stepping up efforts to curb trade in so-called conflict minerals, saying its market weight requires actions that build on due-diligence guidance from the Organisation for Economic Co-operation and Development.

Conflict regions

The EU is among the world’s largest importers of tin, tantalum, tungsten and gold ores and concentrates with a share of almost 35 percent of global trade, according to the commission, the EU’s regulatory arm in Brussels.

“We need to promote transparent, responsible mineral supply chains so that we can keep the money out of the hands of the rebel groups,” European Trade Commissioner Cecilia Malmstroem said on Tuesday.

“If we impose a mandatory scheme without making sure that the conditions on the ground in the conflict regions are right in order to support the implementation of such a system, we run a high risk of further disrupting global supply chains and driving them away from Africa altogether,” Malmstroem said.

In its verdict yesterday, the EU Parliament also voted to make “downstream companies” provide information on due-diligence practices – a step that would expand the scope of a European mandatory system even more.

That prompted hasty deliberations among Parliament members. – Bloomberg GREECE cannot make an upcoming payment to the International Monetary Fund (IMF) on June 5 unless foreign lenders disburse more aid, a senior ruling party lawmaker said yesterday, the latest warning from Athens it is on the verge of default.

Prime Minister Alexis Tsipras’s leftist government says it hopes to reach a cashfor-reforms deal in days, although EU and IMF lenders are more pessimistic and say talks are moving too slowly for that.

Greek officials now point to a race against the clock to clinch a deal before payments totalling about 1.5 billion (R20bn) to the IMF come due next month, starting with a 300 million payment on June 5.

“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5,” Nikos Filis, spokesman for the ruling Syriza party’s lawmakers, said.

“If there is no deal by then that will address the current funding problem, they won’t get any money,” he said.

Talks between Greece and its lenders have foundered on Athens’ demand to roll back labour and pension reform as well as lower fiscal targets set under its bailout programme.

Among concessions Athens was mulling was a special tax on banking transactions to help raise revenue to meet fiscal targets, though discussion of the levy was at an early stage, two sources close to the talks said.

If the talks collapse, Tsipras’s government has made clear it will pay pensioners and public workers before servicing debt.

Greek officials have warned several times in recent weeks that Athens could run out of cash, only to then scrape through obligations by resorting to draconian measures such as ordering state entities to hand over cash or in the case of an IMF payment last week, by emptying out an IMF reserves account.

Four days before the payment was made, Tsipras wrote to EU and IMF lenders warning that Athens could not make the 750m payment – prompting accusations of a bluff that has deepened mistrust.

Still, analysts agree the country’s cash squeeze is increasingly acute and fresh aid will be needed sooner or later to avoid bankruptcy. Ratings agency Moody’s said there was a high likelihood that capital