Initiatives in Response to the Issue of Conflict Minerals

The Dodd-Frank Wall Street Reform and Consumer Protection Act came into effect in the US in July 2010, and includes a “conflict minerals” provision, requiring all companies listed in the US to disclose whether their products contain “conflict minerals,” defined in the provision as gold, tin, tantalum and tungsten, along with details of producing countries, in an effort to prevent minerals mined in the conflict-stricken Democratic Republic of Congo (DRC) or its neighboring countries from being used to fund the activities of armed groups responsible for human rights violations and other acts of violence.
As our smelting and refining operations involve three of these minerals – gold, tin and tungsten – we are stepping up initiatives in this area, and in 2013 formulated a companywide policy on conflict minerals and published it on our website.

Metals Company (gold and tin initiatives)

Our Metals Company has pledged its support for a campaign to ensure the transparent flow of funds in relation to mineral resources, which the EITI*1 has been promoting since June 2011.
We obtained certification from the LBMA*2 in August 2013, confirming that we use conflict-free minerals in our gold products. We have been obtaining the certification every year since then. We have also continued to obtain CFS*3 certification annually from the EICC, indicating that all of the tin we use is conflict-free, since February 2014.

Metals Company Conflict Minerals Control Policy

Establishment date : 19th June 2013
Last revised date (Rev.3) : 11th October 2016

The Metals Company (hereinafter the "Company") engages in bullion manufacturing for gold and tin among the four elements specified as conflict minerals. It has long used no conflict minerals originating from conflict-affected areas as raw materials. To rigidly maintain this practice of nonuse, the Company has adopted a control system that follows the London Bullion Market Association (LBMA) guidance for gold and the Electronic Industry Citizenship Coalition (EICC)- Global e-Sustainability Initiative (GeSI) Conflict-Free Smelter (CFS) Program for tin and undergoes regular inspections by third-party audit bodies.
The Company hereby sets out its conflict minerals control policy applicable to both gold and tin as follows and will pursue the policy.

1. General Provisions
  1. (1) The Company will respect human rights and avoid direct or indirect involvement with inhumane acts. For this purpose, the Company will not use suspected conflict minerals derived from the conflict affected areas, namely the Democratic Republic of Congo and its nine surrounding countries.
  2. (2) The Company will perform risk control on material procurement and will immediately stop a transaction as soon as it is found that the Company is purchasing conflict minerals originating from conflict-affected areas.
  3. (3) The Company will disclose information on suppliers of materials containing gold and tin used in the preceding fiscal year to third-party auditing bodies to seek assurance our conflict minerals control every year, and report the audit results concerning gold to LBMA and those concerning tin to EICC/GeSI.
2. Control System and Responsibility
  1. (1) The Company's headquarters deals with all operations for material procurement for supplying the materials to relevant smelters and refineries. Smelters and refineries procure no materials independently. The Precious Metals Department of the Company engages in over-the-counter purchases of gold bullion and coins. Hence, the headquarters of the Metals Company is centrally involved in control of conflict minerals.
  2. (2) The compliance officer appointed by the Company assumes authority and responsibility stipulated in the control manual, including those for overseeing these sections and divisions concerned and for operating the control system.
  3. (3) The supply chain officer appointed by the Company assumes authority and responsibility stipulated in the control manual, including those for overseeing the whole control system and for regularly conducting management reviews.
3. Judgment Criteria for Material Procurement from High-risk Countries
  1. The Company considers purchasing from countries shown in the specific lists in EICC-GeSI Audit Standard as a high risk purchases.
  2. - For gold, countries listed at Level 2A, Level 2B and Level 3
  3. - For tin, countries listed at Level 2 and Level 3
4. Implementation of Due Diligence on Material Suppliers
  1. (1) The Company will practice due diligence on all suppliers of materials containing gold and materials containing tin and perform risk assessment. The Company will discontinue material purchase transactions that the supply chain officer deems, as a result of the risk assessment, to involve high risk.
  2. (2) Engaging in over-the-counter purchases of gold bullion and coins, the Precious Metals Department has long been collecting customer information in writing at the time of purchase and implementing personal identification via drivers licenses and other public certificates. The department will continuously implement this risk control method in conflict minerals control.
5. Monitoring of Materials Purchased by the Company's Headquarters
  1. (1) Materials purchased by the Company headquarters are supplied to smelters and refineries, which will check actual goods and analyze the content of gold, tin and/or other metals for every lot, to examine consistency with the information from suppliers provided in advance by the Company headquarters and to report the findings to the Company headquarters.
  2. (2) The Company will make active use of the material acceptance monitoring system, which has long been in place, additionally for the purpose of conflict minerals control at the Company headquarters and operate it as a system for prevention of contamination with conflict minerals.
6. Operation of the Conflict Minerals Control System
  1. (1) The compliance officer will provide education and training to the Company headquarters' sections concerned and to the smelters and refineries under circumstances under which it is deemed necessary to do so at individual times.
  2. (2) The compliance officer will perform at least one internal monitoring per year of the Company headquarters' sections concerned and of the smelters and refineries to assess if operations are properly performed in accordance with the conflict minerals control system or if there is deviance from the system.
  3. (3) In the event of starting transactions with a new supplier for material procurement, the Company will ensure that its information is communicated to the compliance officer in an effort to prevent contamination with conflict minerals.
  4. (4) The compliance officer will keep the records of all operations concerning conflict minerals control and retain them for five years. The document architecture for control manuals will be revised as needed and under proper control.

Japan New Metals Co., Ltd. (Advanced Materials & Tools Company jurisdiction)(Tungsten initiatives)

At Japan New Metals Co., Ltd., a group company whose operations include smelting and refining tungsten, we began working to obtain independent certification for the non-use of conflict minerals at an early stage, including measures such as visiting supplying smelters and refineries in China in person.
Having also worked to obtain certification at Japan New Metals itself, we formulated a Conflict Mineral Management Policy in April 2014, before going on to obtain CFS certification for tungsten in December that same year.

Japan New Metals Co., Ltd. [Conflict Mineral Management Policy]Japan New Metals Co., Ltd. [Conflict Mineral Management Policy]

Obtaining Certification for Conflict-Free Tungsten

Akira KawaguchiAkira Kawaguchi
Director and Manager, Business Department,
Japan New Metals Co., Ltd.

More than 80% of the world's tungsten raw materials are currently produced in China. We procure a large percentage of our own raw materials from China too. Having explained the spirit of the legislation in the US to smelters and refineries that we deal with in China and dedicated time to ensuring their understanding, we have repeatedly emphasized the importance of initiatives throughout the supply chain and have managed to get suppliers on board.
You can't form relationships with raw material suppliers overnight. They are the result of trusting relationships built up by our predecessors. We are determined to keep on maintaining relationships with our suppliers in the future.