Smelters face more scrutiny from EU

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