Blood minerals may be coming to filings near you__»

The 1990s and early 2000s saw a surge of concern over “blood diamonds” and other gemstones that had been mined and exported from war-torn regions of the world, often accompanied by horrific exploitation and cost in human life. A big part of that story was pressure on the diamond industry from outside — from consumers, policymakers, filmmakers and more. Companies today go to some pains to explain their efforts to avoid these gemstones, as Tiffany & Co. did in the 10-K it filed on March 30.

Now the U.S. Senate wants companies to tell investors about crisis minerals: Less well-known materials, mined in the Democratic Republic of Congo and surrounding territory in particular, that are critical to the infrastructure of modern life. They go into everything from cell phones and computers to digital video recorders and jet engines. The Congo, of course has seen more or less steady fighting since the mid-1990s, much of it centering on the mineralrich east of the country, where violence pervades the towns and villages near mining areas.

On Tuesday night, the Senate voted to amend the financial-regulation bill it’s debating to include a provision championed by Senators Sam Brownback (a Kansas Republican), Richard J. Durbin (an Illinois Democrat), and Russ Feingold (a Wisconsin Democrat). It would require companies to disclose their use of four minerals — columbite-tantalite, cassiterite, wolframite and gold — and to explain in their filings whether their supplies may have come from the Congo or surrounding territory. It would also require them to explain what they have done to “exercise due diligence on the source and chain of custody — to ensure they did not directly or indirectly finance or benefit armed groups in the DRC,” according to a fact-sheet distributed by supporters of the measure.

The move comes a little over a year after United Nations Security Council Resolution 1857, seeking “to ensure that companies handling minerals from the DRC exercise due diligence on their suppliers.” With 21 cosponsors now, the amendment passed by a voice-vote in the Senate, suggesting strong support — and thus a better chance that it will survive reconciliation with a House bill that lacks any similar provision, or, alternately, will resurface in some other form later on. (Despite Wednesday night’s procedural setback, the Senate seems likely to pass a regulatory-reform bill in some form over the next few weeks; Senate aides note that amendments, once made, are rarely stripped out altogether.)

Columbite-tantalite is used for semiconductors and capacitors throughout modern electronics as well as turbine blades and jet engines; cassiterite is a tin ore; and wolframite is a key source of tungsten, used in rocket nozzles, electron microscopes and tool production. Gold, the best-known of the materials on the list, has uses beyond jewelry, including high-performance electrical contacts.

As Durbin put it in his floor statement Tuesday night:

“Most people probably don’t realize that products we use every day, from automobiles to our cell phones, may use one of these minerals — and that there’s a possibility it was mined from an area of great violence… We as a nation and as consumers, as well as industry, have a responsibility to ensure that our economic activity does not support such violence.”

Cabot Corp. (CBT), which counts tantalum and columbite-tantalite among the “specialty chemicals and performance materials” it distributes, says in its late-November 10-K that it has “not purchased or sourced any material containing tantalum, including coltan, from the Democratic Republic of the Congo,” and included a similar disclaimer in its December 2008 10-K as well.

Given the ubiquity of the materials in modern life, and the fact that sources outside the Congo exist, it’s hard to say yet just which companies will be hardest-hit. But if the trajectory mirrors that of the campaign against blood diamonds, some companies will have a lot of explaining to do — and a lot to lose over time if public concern over crisis minerals becomes more widespread and the explanations prove less than satisfactory.

Image: wolframite from Wikimedia Commons