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Give consumers alternatives they can feel good about buying – devices sourced and assembled in a fair, safe and green manner. Then let the market decide whether it values worker rights over cheap devices. The manufacturer that takes the gamble could own a niche in a market rife with conscientious young customers.
Well, it sounds like a simple solution, anyway.
The more I researched the issue and talked to supply chain and fair-trade experts, the more complicated things became.
For starters, no such designation exists for electronics today and it would require buy-in from the industry to establish one, said Heather Franzese, director of new business at Fair Trade USA in Oakland.
Businesses have to want to stamp their products with such declarations to differentiate them in the marketplace. Unlike segments of the food and apparel sectors, however, tech firms have displayed little interest in doing so. Typically it takes a critical mass of consumer and media pressure before industries move in this direction – and it seems we’re not yet there.
But perhaps the thorniest problem comes in determining what fair trade means. Ultimately the standards are subjective and somewhat arbitrary. How do you determine a fair wage in a poor nation with few other employment options? How many hours are too many hours? What qualifies as safe enough? Does “underage” mean 18, 17 or 16
A particular challenge for electronics is determining what parts of the industry’s long supply chain falls under those standards. Depending on how you count, there are hundreds or thousands of components in the average smart phone, using materials sourced from around the globe.
Should we hold companies responsible for minerals that might have changed hands five times before arriving at a smelting facility? Can we realistically audit the origins of all those materials?
The answer may simply be no.
“Everyone would like to see a phone that comes from places where everyone is treated fairly, but in practice, I think the supply chain is so global and so complex that it’s virtually impossible to confirm 100 percent,” said Rick Pierson, an analyst at IHS Global Insight.
Take the tantalum capacitor, a component of circuits that holds an electric charge. There are more than 450 in an iPhone, according to IHS.
Some estimates say 20 percent of the world’s tantalum comes from the Congo, where its sale has financed militias that have committed atrocities over the last 15 years, including mass murder, rape and mutilation, according to various reports. These rebels have forced miners to dig up minerals for a pittance in conditions that make Chinese factories look like Google’s corporate campus.
Major volumes of other minerals critical for electronics – like tin, tungsten and gold – are produced under similar conditions throughout Central Africa.
In 2010, Steve Jobs addressed the complexity of tracking these materials in an e-mail to a customer.
“We require all of our suppliers to certify in writing that they use conflict few (sic) materials,” he wrote. “But honestly there is no way for them to be sure. Until someone invents a way to chemically trace minerals from the source mine, it’s a very difficult problem.”
And there are other complexities.
Human-rights groups like the Enough Project have pushed companies to stop using conflict materials in their products, ultimately helping to insert a provision into the Dodd-Frank financial reform law that mandates companies disclose when they buy conflict materials.
The Securities and Exchange Commission has yet to implement the rules, but the fact they’re coming has already led to big changes in the region – for better and worse.
A 2011 opinion piece in the New York Times called the law a catastrophe, saying smelting factories have responded by refusing to buy minerals from eastern Congo, even from legitimate suppliers.
“I heard from scores of artisanal miners and small-scale producers who used to make a few dollars a day digging ore,” freelance writer David Aronson said. “Paltry as it may seem, this income was a lifeline.”
But Aaron Hall, associate director of research at Enough Project, said that companies are figuring it out. He said that Motorola and Kemet, which makes capacitors, have set up systems that allow them to monitor and track materials. Meanwhile, the Electronic Industry Citizenship Coalition, whose members include IBM, Dell and Apple, launched a Conflict Free Smelter Assessment Program to identify facilities that aren’t using conflict minerals.
There are two points worth emphasizing here: One is that the industry is making some real changes, at least in certain parts of the supply chain.
The other is that fair trade doesn’t always come down to a simple moral choice. There are sometimes steep trade-offs and difficult questions. What’s the greater good: providing work to the desperately poor in the Congo, or preventing money from falling into the hands of warlords?
The final uncertainty surrounding the feasibility of fair-trade electronics is the most important one: Would enough consumers buy them?
On this question, there was a perfect split in my interviews between business experts, who said no, and advocacy groups, who said yes.
“The template is there and the world is waiting,” said Jeffrey Ballinger, executive director of labor group Press for Change.
But tablets and smart phones are volume businesses, meaning companies have to sell huge quantities of each short-lived version to make the numbers pencil out. A fair-trade stamp alone may not line up the buyers Ballinger speaks of, whose identities are often as wrapped up in their tech savviness as their political consciousness. To have any chance of success, the products would have to be technically comparable – without being far more expensive.
Big change in cost
In its recent exposé of working conditions at Chinese plants producing Apple products, the Times said various experts estimated building iPhones in the United States would add up to $65 to each device. But that doesn’t address the unsavory origins of the phones’ components – and doing so would surely raise costs higher still.
“Will people pay a social premium? Sure, some people would, but not enough to justify it,” said John Morgan, a business professor at UC Berkeley. “It still won’t make it economically viable.”
None of this is meant to argue that companies should get a free pass – or that we shouldn’t demand U.S. businesses use their clout to raise labor standards around the world.
It’s only to say that there aren’t any simple solutions to complex problems.
By: James Temple
China, having dominated the world market, slashes output and exports, and profits for mining companies stand to climb smartly.
DJ-AIG Commodity Indexes
As China’s role in the tungsten market dims, tungsten-mining companies will be basking in the warm glow of profits.
Tungsten gained fame as the filament in incandescent light bulbs. But because it’s the second-hardest substance after diamonds, more than half of it now goes to make cutting, drilling and wear-resistant parts.
China, which accounted for around 86% of tungsten production last year, has slashed both output and exports, sending prices on a tear. They climbed about 35% over the course of 2011 and remain 27% above last year’s lows.
Because there are no futures contracts on tungsten, investors should look to the stock of mining companies like Malaga (ticker: MLG. Toronto) and North American Tungsten (NTC.Vancouver) to take advantage of the shrinking supplies and growing demand for the specialty metal.
China came to dominate the tungsten market at the start of the last decade, as its super-cheap exports drove other producers out of the market. The Chinese eventually accounted for 91% of worldwide tungsten production in 2004, according to data from the U.S. Geological Service.
But Beijing’s growing need for the metal in its own industries—and its crucial role in military weapons—has prompted China to hoard more of it. Throughout last year, China accelerated its efforts to limit both production and exports, curtailing mines and expansion of existing projects while imposing higher duties on tungsten shipped overseas.
World tungsten production slumped 21%, to 72,000 metric tons last year, from the peak of 90,800 metric tons reached in 2006, according to the USGS. The downturn comes just as robust growth in energy extraction, mining and the automotive sector whets the global appetite for machine tools that rely on the super-hard metal. “Demand has been growing at a pace of about 6% to 7% for a few years, while supply has been almost flat because China reduced their production and shut down a few mines,” says Pierre Monet, the CEO of Malaga, which produces the metal in Peru.
TUNGSTEN IS TRADED IN POWDER FORM, known as ammonium paratunstate or APT.
Miners outside China are clamoring to take advantage of the market and are ramping up plans for extraction. But opening a new mine can take three to five years, and restarting an old one can be onerous, as well. However, the companies that survived the onslaught of low-priced Chinese exports—and continued to produce tungsten—now are poised to profit. Malaga and North American Tungsten have mines in place and are gearing up production. Both are penny stocks, a variety of investment usually suitable only for the adventurous. But in this case, this is about the only way that small investors can invest in the metal. And the timing looks right.
Says Roskill: “Very few of the significant new tungsten projects are expected to deliver any substantial tonnages of tungsten in 2012, so the market will be relying on existing producers to cope with any growth in demand.”
By: TATYANA SHUMSKY
New kind of high-temperature photonic crystal could someday power everything from smartphones to spacecraft
A team of MIT researchers has developed a way of making a high-temperature version of a kind of materials called photonic crystals, using metals such as tungsten or tantalum. The new materials — which can operate at temperatures up to 1200 degrees Celsius — could find a wide variety of applications powering portable electronic devices, spacecraft to probe deep space, and new infrared light emitters that could be used as chemical detectors and sensors.
Compared to earlier attempts to make high-temperature photonic crystals, the new approach is “higher performance, simpler, robust and amenable to inexpensive large-scale production,” says Ivan Celanovic ScD ’06, senior author of a paper describing the work in the Proceedings of the National Academy of Sciences. The paper was co-authored by MIT professors John Joannopoulos and Marin Soljačić, graduate students Yi Xiang Yeng and Walker Chen, affiliate Michael Ghebrebrhan and former postdoc Peter Bermel.
These new high-temperature, two-dimensional photonic crystals can be fabricated almost entirely using standard microfabrication techniques and existing equipment for manufacturing computer chips, says Celanovic, a research engineer at MIT’s Institute for Soldier Nanotechnologies.
While there are natural photonic crystals — such as opals, whose iridescent colors result from a layered structure with a scale comparable to wavelengths of visible light — the current work involved a nanoengineered material tailored for the infrared range. All photonic crystals have a lattice of one kind of material interspersed with open spaces or a complementary material, so that they selectively allow certain wavelengths of light to pass through while others are absorbed. When used as emitters, they can selectively radiate certain wavelengths while strongly suppressing others.
Photonic crystals that can operate at very high temperatures could open up a suite of potential applications, including devices for solar-thermal conversion or solar-chemical conversion, radioisotope-powered devices, hydrocarbon-powered generators or components to wring energy from waste heat at powerplants or industrial facilities. But there have been many obstacles to creating such materials: The high temperatures can lead to evaporation, diffusion, corrosion, cracking, melting or rapid chemical reactions of the crystals’ nanostructures. To overcome these challenges, the MIT team used computationally guided design to create a structure from high-purity tungsten, using a geometry specifically designed to avoid damage when the material is heated.
NASA has taken an interest in the research because of its potential to provide long-term power for deep-space missions that cannot rely on solar power. These missions typically use radioisotope thermal generators (RTGs), which harness the power of a small amount of radioactive material. For example, the new Curiosity rover scheduled to arrive at Mars this summer uses an RTG system; it will be able to operate continuously for many years, unlike solar-powered rovers that have to hunker down for the winter when solar power is insufficient.
Other potential applications include more efficient ways of powering portable electronic devices. Instead of batteries, these devices could run on thermophotovoltaic generators that produce electricity from heat that is chemically generated by microreactors, from a fuel such as butane. For a given weight and size, such systems could allow these devices to run up to 10 times longer than they do with existing batteries, Celanovic says.
Shawn Lin, a professor of physics at Rensselaer Polytechnic Institute who specializes in future chip-making technology, says that research on thermal radiation at high temperatures “continues to challenge our scientific understanding of the various emission processes at sub-wavelength scales, and our technological capability.” Lin, who was not involved in this work, adds, “This particular 2-D tungsten photonic crystal is quite unique, as it is easier to fabricate and also very robust against high-temperature operation. This photonic-crystal design should find important application in solar-thermal energy-conversion systems.”
While it’s always hard to predict how long it will take for advances in basic science to lead to commercial products, Celanovic says he and his colleagues are already working on system integration and testing applications. There could be products based on this technology in as little as two years, he says, and most likely within five years.
In addition to producing power, the same photonic crystal can be used to produce precisely tuned wavelengths of infrared light. This could enable highly accurate spectroscopic analysis of materials and lead to sensitive chemical detectors, he says.
The research was partly supported by the Army Research Office through the Institute for Soldier Nanotechnologies, NASA and an MIT Energy Initiative seed grant, as well as by TeraGrid resources and the MIT S3TEC Energy Research Frontier Center of the U.S. Department of Energy.
Provided by Massachusetts Institute of Technology (news : web)
This story is republished courtesy of MIT News (
http://web.mit.edu/newsoffice/), a popular site that covers news about MIT research, innovation and teaching.
Faith leaders and business groups are colliding over a coming SEC ruling on little-known provisions of Dodd-Frank which require companies to track the use of “conflict minerals” in their production of certain consumer products.
One section of Dodd-Frank requires businesses to track – but not halt – the use of so-called conflict minerals from the Democratic Republic of the Congo, including a private sector audit of tracking methods. Another requires those involved in the commercial development of oil, natural gas, or minerals to disclose payments made to governments.
“It’s terrible what we’ve allowed to go on over the last few years without the world paying more attention to it,” said Rep. Jim McDermott (D-Wash.), on a conference call Wednesday with faith leaders. “As many as 7 million people have been killed… this is a mechanism by which we could cut off the flow of money to the rebels [in the Democratic Republic of the Congo]. The rebels are controlling the mines, and selling minerals on the black market.”
The SEC will soon make a decision on how to interpret the law, and certain business groups are suggesting that the sections would needlessly increase compliance costs.
“We’re concerned that industry pressure on the SEC will be so intense that they’ll water down the law and it’ll become ineffective,”said Corinna Gilfillan, the head of Global Witness, a human rights group.
Conflict minerals are found in all sorts of consumer products, and are widely used in electronics. The four main minerals mined in the Congo are tin, tantalum, tungsten and gold. Tin is used in circuit boards, tantalum in electronic capacitors, tungsten to allow mobile phones to vibrate, and gold as a coating for wires.
Heavyweights like the Chamber of Commerce, the American Petroleum Institute and the National Association of Manufacturers have expressed concerns about the provisions.
On the other end, religious figures have stepped up to join human rights groups in urging for a full enactment of the conflict mineral provisions.
“There is broad consensus in the religious community that transparency of minerals coming from conflict regions is a vital responsibility… we’re all concerned with trying to get conflict minerals out of the system,” said Rabbi David Saperstein, director of the Religious Action Center of Reform Judaism, on the conference call.
The faith leaders emphasized that their religions called them to treat other human beings with respect, which compelled them to support the Dodd-Frank provisions.
“What would it mean for us to be a neighbor to everybody in the supply chain used to make the clothes we wear, the computers we type on, and the cars that we drive? Our call to love is not defined by geographical proximity,” said Lisa Sharon Harper, director of mobilizing for the Christian group Sojourners. “We are all responsible for being good neighbors. It doesn’t matter if we have a good excuse… the people in the Congo are made in the image of God.”
“In the Jewish tradition, according to the Talmud, it was absolutely clear that there has to be transparency in the way that businesses went about selling their products. There were explicit prohibitions against deception, against watering down wine, against claiming something was something that it was not,” added Saperstein, also an appointee to the White House Council on Faith-Based and Neighborhood Partnerships.
By: Tim Mak
The Democratic Republic of the Congo: a region marked by violent conflict since 1996 in which torture, mass rape, forced displacement, and mass murder have been going on for years without much relief. It is a region in which armed groups are able to propagate the violence through the sale of the Congo’s mineral resources.
According to the Enough Project’s Raise Hope for Congo Campaign,
“Armed groups earn hundreds of millions of dollars per year by trading four main minerals: the ores that produce tin, tantalum, tungsten, and gold. This money enables the militias to purchase large numbers of weapons and continue their campaign of brutal violence against civilians, with some of the worst abuses occurring in mining areas.”
Most of these “conflict minerals” are used in the production of electronic devices in a process involving supply chains marked by a disturbing lack of transparency, so that by the time products such as cell phones or laptops end up in the hands of consumers, there is no way to know whether the purchase of those products contributed to the income of armed groups in the Congo.
The goals of many concerned activists are to find a way to ensure transparency in companies’ supply chains and to pressure companies found to be using conflict minerals to discontinue purchasing those minerals. The market for conflict minerals then, ideally, would be limited in terms of profit, reducing resources available to the armed groups, and thus pushing the armed groups toward peaceful resolution of the conflict which could open the region to other reforms.
There have been arguments that the initial attempts toward conflict-free policies have actually been detrimental to the Congo, by driving companies to search for minerals elsewhere, therefore crippling the economy and reducing the income of the general population. However, the UN Group of Experts recently issued a report stating that a conflict-free resolution proves to be an “important catalyst for traceability and certification initiatives and due diligence implementation in the minerals sector regionally and internationally,” and serves to reduce “the level of conflict financing provided by these minerals” in regions that have begun to comply to the due diligence guidelines. So, it seems that passing and implementing conflict-free resolutions are the first steps toward true reform and peace in the Congo.
Why not focus the fight for conflict-free reform on college campuses, which house a “particularly coveted demographic of electronics companies,” namely, students?
The Enough Project’s Raise Hope for Congo Campaign and STAND, a Student Anti-Genocide Coalition, have created the Conflict-Free Campus Initiative, a “nation-wide campaign to build the consumer voice for conflict-free electronics, such as cell phones, laptops, and other devices that will not finance war in eastern Congo.” By focusing on college campuses, the initiative “draws on the power of student leadership and activism to encourage university officials and stakeholders, both of whom are large purchasers of electronics and powerful spokespersons, to commit to measures that pressure electronics companies to take responsibility for the minerals in their supply chains.”
Organizing the student voice at the university level not only expresses the collective desire of individuals to ensure that they and their university do not participate in the perpetuation of the conflict in the Congo, but it also sends a powerful message to both political and corporate entities that consumers care about policies of those entities that may support the conflict. The Conflict-Free Campus Initiative explains:
“Universities are also a large client for most electronics companies and represent a large section of the buyers’ market for consumer electronics. By raising our collective voice as consumers, we can actually bring about a shift in corporate and government policy and help bring peace to Congo.”
Eight universities have issued conflict-free resolutions, including Stanford University, the University of Pennsylvania, and Duke University; more than sixty other colleges and universities throughout the United States and Canada have begun campaigns to do the same (including Yale University, Harvard University, Dartmouth College, Brown University, UC Davis, UCLA, UCSB, UCSC, Notre Dame, and Georgetown University).
The activism geared toward passing these conflict-free initiatives on college campuses has been successful in inspiring activity at the government level. California passed a bill prohibiting “state agencies from signing contracts with companies that fail to comply with federal regulations aimed at deterring business with armed groups in eastern Congo,” the first state bill to be passed regarding conflict minerals. Massachusetts is now also considering a conflict-free bill. Two cities, Pittsburgh, PA and St. Petersburg, FL, have also passed conflict-free resolutions.
If enough colleges, universities, towns, cities and states take the initiative in decisively acting to prevent the perpetuation of the conflict in the Congo by taking steps toward becoming conflict-free, perhaps the income of the armed groups committing mass rape and murder will be decreased sufficiently to prompt the beginnings of an end to the conflict.
Once the fighting ends, addressing the root causes of the conflict – including ethnic tensions – can be addressed through effective institutional reforms. But the fighting has to end before that can happen, and the fighting cannot end unless the actors in the conflict cannot afford to fight.
By: Cara Palmer
Tungsten is an essential component in many industrial applications including drilling & cutting tools, electronics and specialist steels. The European Union categorises tungsten as a “critical raw material”. China currently produces 85% of the world’s tungsten but their factories are ravenous consumers and China is a net importer. USA, Europe and Japan consume 55% of world tungsten, but produce only ~5%. It should be no surprise that tungsten prices have surged in the last year, while many other commodities have experienced price decline. Image Link: http://www.metalinvestmentnews.com/wp-content/uploads/2011/12/PLY1-Dec.jpg Tungsten is currently selling for $20 a pound. New growth markets include nickel-tungsten alloys which can substitute for gold-nickel plating.
Playfair’s tungsten properties contain an estimated 100 million pounds of 43-101 compliant tungsten, and significant additional historical resources. These resources have potential for expansion.
Tungsten is a low profile commodity. There is no tungsten ETF, and few pure plays. Outside of China only two publicly traded companies currently produce tungsten: Malaga (MLG-TSX) and North American Tungsten (NTC-TSX). With four high-grade Tungsten deposits, Playfair Mining (PLY-TSX) is highly leveraged to rising prices and looming tungsten shortages. Image Link: http://www.metalinvestmentnews.com/wp-content/uploads/2011/12/PLY2-Dec.jpg
“We feel very fortunate to have 4 high grade tungsten deposits at a time when the price of tungsten has started to move sharply higher,” states Don Moore, Playfair CEO, “We acquired these projects when tungsten prices were depressed. China has an ironclad grip on the market. It’s not surprising that we are starting to see some serious interest from large tungsten end-users who need to get stable supply from outside of China.” Image Link: http://www.metalinvestmentnews.com/wp-content/uploads/2011/12/PLY3-Dec.jpg Tungsten is an essential industrial product but typically insignificant on a cost basis. Like the salt in a bag of potato chips – the price of salt could triple and the bag of chips would only increase a penny. But you can’t sell chips without salt. So with China slurping up most of the global supply – tungsten could see dramatic price increases with little demand destruction. Playfair’s veteran team of Donald G. Moore, Neil Briggs is augmented by Director James Robertson who was a principal in Primary Metals, a tungsten producer taken out by Japanese giant, Sojitz Inc.Judging from public statements by Playfair’s management, the strategy may well be to partner with a tungsten end user to help finance the project into production.
In addition to the compliant resources at Grey River (16.2m lbs) and Risby (89.4m lbs), Playfair has historical resources of 18.5m lbs at Lened and 5.3m lbs at Clea. Four high grade Canadian deposits: Grey River representing near term production potential, Risby offering massive size potential and all offering room for exploration upside.
Grey River, located on the south coast of Newfoundland, consists of nine mineral claims covering 1,750 hectares. The Grey River tungsten veins are typical fluorite-rich wolframite-quartz greisen vein deposits. A 1984 GSC Economic Geology Report lists the Grey River deposits as “one of the largest typical wolframite deposits in Canada” and states “It would be remarkable if there were not many more tungsten occurrences’ [on the property].” The Grey River deposit sits at tidewater in an ice free, deep water Atlantic port that offers year round shipping.
Risby is an advanced stage deposit in the Yukon accessible by a 25 km tractor road from an all-weather highway. The property is located approximately 55 kilometres west of Ross River and is comprised of 38 quartz mineral claims, all 100% owned by Playfair Mining.
The property was worked on from 1968 to 1982 by the Caltor Syndicate and Hudson Bay Exploration and Development Co. Ltd. Together their exploration efforts include 48 diamond drill holes (7,057 metres), geological mapping, trenching, stream sediment sampling and ground geophysics (magnetometer and EM surveys). Recent work by Playfair includes diamond drilling, resource expansion and a NI 43-101 compliant inferred resource calculation of 8,537,000 tonnes of 0.475% WO3 at a 0.2% cut-off.
Despite surging tungsten prices, Playfair has been hit hard by tax loss selling is currently trading close to all-time lows at $.07. It has a market cap of $5.4 million. The British Geological Survey (BGS) has tungsten #4 on its “Risk List” stating that it is critically vulnerable to supply disruption. With 122 million fully diluted shares and 100 million pounds of 43-101 compliant tungsten on the books – worth about $2 billion at current prices – Playfair is definitely worth a closer look.
Source: Metal Investment News
ANALYSIS – ProspectingJournal.com – It didn’t take long for the panic to set in, last year, when the Chinese government flexed its muscle by threatening the world’s Rare Earth Element (REE) supply. With 95% of REE supplies coming from China, that scare was indeed legitimate. But REEs aren’t the only elements with which China has the potential to choke off. On American Elements’ 2011 Top 5 US Endangered Elements List, three elements (tungsten, indium and neodymium) have over 50% of world supply coming from Chinese mines.
To refresh the memory of those who followed the rare earth surge from last year, and the subsequent piquing of interest in rare earth companies, it began with Japan. As the summer of 2010 was coming to a close, reports of an embargo of shipments to Japan for REEs raised concern for manufacturers who depend upon the elements for production primarily in the tech industry. Within a month, that embargo spread to North America and Europe, and concern over Chinese monopolization rose, along with REE prices, and those of the companies devoted to them.
When the embargo ended, relief came to the sector, while the pace of development outside of China received only a minor increase. The threat of supply shortages still lingers, especially with tungsten, indium and neodymium.
The example of tungsten is not to be ignored, as 85% of global production comes from China, which has already indicated it might end all exports altogether due to domestic demand increases.
With the highest melting point and greatest tensile strength of all elements, tungsten’s importance is unquestionable. Used in all situations that call for high temperature thresholds or hardness and strength, tungsten is imperative to many modern living standards that depend upon it. From a US perspective, the element’s use in the aerospace program, electronics and military (including in bullets and armor) is critical. To the mining industry as a whole, tungsten is a savior with many uses within the assembly of mining equipment itself, including drills in need of durability.
Strangely enough, the United States dismantled domestic production of tungsten ore in 1994 with the last tungsten mine, the Pine Creek Mine in Inoyo, California, going down as a historical footnote en route to Chinese dependence.
Today, tungsten production remains primarily within China, but awareness of a need to develop outside of the PRC is becoming clearer. Options in the western hemisphere are appearing, and may soon be getting the attention they need to aid this drive for domestic independence. Juniors such as North American Tungsten [NTC – TSX.V] and Playfair Mining [PLY – TSX.V] may provide answers that mitigate a possible future supply breakdown.
For North American Tungsten, the title of being the western world’s leader in tungsten production doesn’t come lightly. Through developing its Cantung Mine, it provides tungsten concentrate production within the borders of Canada’s Northwest Territories, which from an international standpoint is a much more secure mining investment environment to work within.
At a much earlier stage, Playfair Mining is not yet a producer, but is heavily leveraged to the price of tungsten, which today sits around $440/MTU (“metric tonne unit”) or over $20/lb. With a goal in mind to partner with an end user of tungsten metal in order to finance its Grey River deposit into production, Playfair is well aware of the potential impact a tungsten shortage would carry.
Due to its high level of use in the manufacturing sector, a significant number of Fortune 500 companies are dependant upon tungsten’s availability. General Electric and its Tungsten Products Division, along with others like Kennametal and ATI Firth Sterling are among those that would most likely benefit from securing a long term tungsten supply, and are among potential targets should Playfair seek a high-worth partner to put its nearest term tungsten property into production.
The company has 4 high-grade deposits with two located in the Yukon, one in the Northwest Territories and another on the southern coast of Newfoundland. Each of the properties was acquired strategically during a period of massively deflated tungsten prices, prior to this latest surge over the $440/MTU mark. This increase represents a 70% rise from the recent low prices that graced Playfair’s entry period. While the commodity’s price has risen, the company’s stock has yet to follow suit.
While the current price of the stock seems to have languished, the team is making strides to be better prepared for when the bigger end-users in need of tungsten come knocking. The board includes experienced individuals who have taken deals into production before, as well as Director James Robertson who took the last big tungsten company outside of China to successful acquisition.
In both combined 43-101 compliant and non-compliant resource categories, Playfair’s tungsten properties contain more than an estimated 5.5 million MTUs of WO3. It’s to be expected, though, that since Playfair is an exploration company, these resources have room for expansion.
As economic uncertainty lingers in all global markets, crucial and endangered elements such as REEs, tungsten, indium and neodymium will be within the watchful eye of western manufacturers in need of these ingredients for their operations. Whether another anticipated panic is inflicted by possible impending embargo actions by China doesn’t change the dependence we have on endangered elements. And like last year’s REE crisis, a price surge on those companies were set to move prior complications is entirely a likely scenario.
By: G. Joel Chury
In the jungles and mountains of the Democratic Republic of the Congo, battles are raging, part of a 13-year-long civil war. Most of the world has paid little attention to the murder and rape that still dominates life in the DRC’s eastern provinces. But U.S. electronics companies like HP, Intel, and Apple recently became deeply interested, thanks to a provision on “conflict minerals” that was slipped into a 2010 financial reform law, the Dodd-Frank Act.
The minerals provision is intended to deprive the Congo’s warlords of funds by cutting off sales from the mines they control. It focuses on the ores that produce the “three Ts”: tin, tantalum, and tungsten, as well as gold. Public companies that use these metals in their products will be required to investigate their supply chains, determine if they use metals that were mined in the DRC, and disclose their findings to the U.S. Securities and Exchange Commission (SEC), in their annual reports, and on their websites. If its minerals did originate in the DRC, a company must submit a larger report on whether the purchase of these minerals financed or benefited armed groups in that part of Africa. The SEC is expected to issue final rules for implementing the law before the end of the year, and companies are scrambling to get ready.
While the conflict minerals law applies only to companies that are required to file annual reports in the United States, it’s expected to have an international impact. Since mineral suppliers sell to electronics companies around the world, any change in operations they make for the U.S. market will have ripple effects elsewhere.
The law doesn’t only affect the electronics industry. But the conflict mineral issue has been linked in the public mind to electronics because the three Ts play crucial roles in smartphones, TVs, and laptops. Tin is used in solder and thus found on every circuit board, tantalum is used in capacitors, and tungsten is used in the vibrating motors of many phones.
Electronics companies had been warned that they’d eventually have to account for their use of these minerals. So firms like HP and Intel asked the Electronic Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative, two trade groups, to investigate the industry’s options.
The groups found that it’s extremely difficult to determine the origin of the tantalum used in a certain batch of smartphones. But they also realized that only about 45 smelters worldwide deal with the three Ts, buying the ores from suppliers and turning them into pure metals. After several years of research, the industry groups came up with the Conflict-Free Smelter Program, which is currently in the pilot phase for its first metal, tantalum.
The program asks each smelter to allow an annual independent audit of its mineral procurement process. If the auditors are convinced that no minerals are sourced from the Congo’s conflict mines, that smelter is certified as “conflict free,” allowing companies to buy its metals without worry. While the program is voluntary, EICC spokeswoman Wendy Dittmer says many smelting firms believe it’s in their interest to participate.
“Electronics companies are starting to ask questions all the way down their supply chains,” she says. “That certainly makes the buyers of the minerals very interested in being able to talk about their own due diligence.”
There are concerns that the law may backfire. By making the reporting requirements more onerous for companies that source minerals from the DRC, the law may reduce demand from all DRC mines, even those that aren’t in conflict regions and don’t finance armed groups.
These concerns about such a de facto ban led Motorola Solutions to initiate the Solutions for Hope Project, in which Motorola and several other companies formed a relationship with a conflict-free tantalum mine in the DRC’s Katanga province.
To establish the program, Michael Loch, Motorola’s director of supply-chain corporate responsibility, visited the mine and accompanied a shipment of ore along its export route. “This pilot allows our industry to stay engaged in the area,” says Loch. “We didn’t want to abandon the region.” But he acknowledges that it took a lot of effort to get the process in place for one mine and says it may be difficult to scale up the program.
The pilot programs should provide a framework to make compliance easier. Still, companies around the world are waiting for the SEC’s final rules with some anxiety. And there may be some efforts to block the rules’ enforcement through U.S. courts. The U.S. Chamber of Commerce, for one, has discussed the possibility of a lawsuit. The chamber disagrees with the SEC’s initial compliance cost estimate of US $71 million, saying that costs will instead be counted in the billions of dollars.
One thing is already certain about the SEC rules: There will be no fines for using conflict minerals. Even so, activists think it will have its intended effect, because companies will want to avoid bad publicity.
“For years we have been unknowing consumers of these minerals because companies have turned a blind eye,” says Sasha Lezhnev, a policy consultant on conflict minerals with the human rights group Enough. “This will enable consumers to make choices on whether or not to buy products from companies that are sourcing from these mines.”
By: ELIZA STRICKLAND