Overview of the Conflict Minerals Issue
The Democratic Republic of the Congo (“DRC”) is a Central African country with vast mineral wealth, including reserves of cassiterite
(tin), columbite-tantalite (aka coltan – source of tantalum), wolframite (tungsten) and gold. For many years, armed groups
have fought to control mines within the DRC; those armed groups have been cited for committing violent crimes against locals,
including murder, rape and forced labor. Armed groups controlling mines smuggle minerals out of the DRC and the proceeds are
used to further finance conflict and perpetuate criminal behavior; hence, cassiterite, coltan, wolframite and gold are considered
conflict minerals.
The elements tantalum, tin, tungsten and gold are metals used in many manufactured goods across many industries, including
the aerospace, appliances, automotive, electronics, jewelry, medical and tool & die industries.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed into law in July 2010, contains requirements that U.S.
companies report to the Securities and Exchange Commission (“SEC”) on the origin of conflict minerals or their derivatives and
show due diligence if conflict minerals are sourced from the DRC or an adjoining country. The goal of the act is to cut direct and
indirect funding of armed groups engaged in conflict and human rights abuses.
The SEC published regulations implementing Dodd-Frank Section 1502 on August 22, 2012; the first reports to the SEC are due
May 31, 2014 for the calendar year ending December 31, 2013. If a large company cannot be sure of the origin of its conflict
mineral derivatives used in its products during the first two reporting years (four years for smaller companies), it may report that
the products are DRC conflict undeterminable.
Definitions Related to Conflict Minerals Adopted by TPM
Conflict Mineral
(A) columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives; or (B) any other mineral or its derivatives determined
by the Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country. Per the
SEC 1502 regulations, conflict minerals are necessary to the functionality or production of a product, but must be contained in
the end product in order to be considered a conflict mineral under the rules (so tools used to manufacture parts are not included
in the scope of products covered by the SEC regulations).
DRC Conflict Mineral Free
DRC Conflict Mineral Free materials do not contain conflict minerals that directly or indirectly finance or benefit armed groups in
the Democratic Republic of the Congo or an adjoining country. This term also applies to materials determined to be processed
from scrap and/or recycled material. Materials that were already incorporated into products or were already within the supply
chain as of December 31, 2012 will not be subject to inquiry or reporting rules (The first reporting period covered by the new SEC
rules is January 1, 2013 – December 31, 2013).
Armed Group
Armed Group means an armed group that is identified as perpetrators of serious human rights abuses in the annual Country
Reports on Human Rights Practices under sections 116(d) and 502B(b) of the Foreign Assistance Act of 1961 (22 U.S.C.
2151n(d) and 2304(b)) relating to the Democratic Republic of the Congo or an adjoining country.
True Precision Machining’s Approach on Conflict Minerals
Suppliers to True Precision Machining (TPM) must develop policies toward preventing the use of conflict minerals or derivative
metals sourced from mines controlled by armed groups in all items to be supplied to TPM. In addition, all suppliers to TPM must
document their efforts to determine the source of any conflict minerals or derivatives and provide TPM with evidence of the origin
of the metals tantalum, tin, tungsten and gold in products to be supplied to TPM. Any smelters producing tantalum, tin, tungsten
or gold metals subsequently used in TPM products are requested to seek and obtain certification through the EICC/GeSI Conflict
Free Smelter (CFS) program. When there are an adequate number of CFS smelters/refiners available for sourcing, TPM will
require sourcing from CFS certified smelters.
Status of TPMs’ Due Diligence to Prevent Use of Conflict Minerals
True Precision Machining (TPM) has taken the following steps toward determining the sources of 3TG within the supply chains
of all its products:
Enter Into Simple Contracts
TPM enters into simple contracts with major contractors to not supply illegally mined materials to True Precision Machining. This
policy contains provision of verifying the origin/source information of materials to confirm that they are not obtained through
illegal mining.
Declare Supplier Code of Conduct
Based on EICC Code, TPM establishes and declares its Supplier Code of Conduct in this matter through this document. This
Code contains the provision that ‘Suppliers shall evaluate the origin or source of their materials throughout their supply chains
to verify that they have not been obtained through any illegal form of mining (e.g., materials obtained from the Democratic
Republic of Congo)”,contractually binding suppliers to not use conflict minerals.
Identify Materials In Supply Chain
TPM conducts an analysis of all manufacturing parts and materials using our internal materials management system. Results
are coalated and due diligence investigation is conducted to assure our suppliers are using DRC Free materials, and that our
suppliers certify as such.
Conduct Due Diligence Survey For Identified Suppliers
TPM has contacted suppliers of Conflict Materials and require a statement of due diligence policies that address conflict material
assessments as well as statements or certifications that material received are DRC Conflict Mineral Free.
