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Article

14 Jan 2013

Author:
Robert Borthwick & James Warwick (Maplecroft) in This is Africa

Congo-Kinshasa: Being Frank About Conflict Minerals

Section 1502 [of the Dodd-Frank Act] will introduce significant...compliance costs...There are concerns that Section 1502 will not be effective...given widespread cross-border smuggling into states with a weak regulatory framework...and into countries not covered by the legislation...The prevalence of endemic corruption...and the...technical challenge of ensuring effective traceability policies may...mean mineral revenues continue to perpetuate conflict...[T]he cost of compliance will...undermine the competitiveness of affected companies...The new regulations could also lead to higher prices for minerals...[A]rtisanal miners in eastern DRC...are likely to feel the effects of falling Western demand...While there is a...risk that Section 1502 will result in a de facto embargo on sourcing certain minerals from DRC...there is still reason to be optimistic that the legislation will contribute to...promoting peace and security in eastern DRC. [refers to Apple, HP, Intel]