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Chemical Compounds from the 3TGs Not Subject to the Conflict Minerals Reporting Requirements

June 2, 2014

The Securities and Exchange Commission (SEC) confirmed on May 30, 2014, that chemical compounds manufactured from tin, tantalum, tungsten, and gold (the 3TGs) are not included in the scope of the final rule implementing the Conflict Minerals provision (Section 1502) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rule requires companies to investigate and publicly disclose whether their products contain conflict minerals, which are defined as columbite, tantalite (coltan), cassiterite, gold, and wolframite; related derivatives (tantalum, tin, and tungsten); or any other mineral or derivative, which the Secretary of State determines is financing armed conflict in the Democratic Republic of the Congo (DRC) or any adjoining country.

In December 2012, a coalition of industry associations submitted a letter to the SEC requesting confirmation that chemical compounds derived from the 3TGs would be considered outside of the scope of the rule and, therefore, not subject to the Conflict Minerals provision's annual reporting requirements. The coalition argued that metallic compounds—such as tin-based catalysts—are chemically distinct from the minerals and their metal derivatives and that including them within the scope of rule would extend the scope of the rule beyond what Congress had intended.

SEC staff confirmed to members of the coalition during a May 30 telephone call that since these metal compounds are chemically distinct from the metals themselves, the Commission did not intend the scope of the Conflict Minerals rule to include them. However, the staff did specifically note that metal alloys, including solder, are subject to the rule to the extent they contain one of the 3Ts or gold. In addition, those manufacturers that purchase gold or a 3T metal to make a metal compound also remain subject to the reporting requirements. For example, a catalyst manufacturer that uses tin to produce an organotin catalyst is subject to the rule. However, products manufactured by that company's downstream customers, who purchase and use the chemical compounds in their manufacturing processes, are NOT subject to the rule since they are not using one of the 3Ts or gold in their product but rather a new chemical substance.