Financial Reform and Conflict Minerals
My law-professor brother tells me of an unusual provision in last year’s Dodd-Frank financial reform bill. It designates conflict minerals (gold, wolframite, and two others), the mining of which yields profits that have financed wars in the Congo, and prohibits companies from using such minerals unless their provenance is appropriate (unless they come from “compliant smelters”).
The problem is that the law applies only to corporations of a certain size (not too small) and unincorporated entities. The results are clear: The law reduces demand for conflict minerals, thus lowering their price and probably the revenue of the conflict country suppliers, mostly affecting minerals from the Congo; but it raises demand for other sources of the minerals– from other countries, thus raising costs for American companies that do business legitimately.
My guess is that this was not the purpose of the act’s authors, nor of former Kansas Senator Sam Brownback, who initiated the reform. Nonetheless, tech companies like Apple and Intel are starting to comply. (HT: LAH)