SEC Proposes Rules Relating to Conflict Minerals, Mine Safety Reporting and Payments by Resource Extraction Companies

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On December 15, 2010, the Securities and Exchange Commission proposed rules relating to disclosure of (i) use of “conflict minerals” from the Democratic Republic of the Congo and adjoining countries, (ii) mine safety information and (iii) payments made to governments by resource extraction issuers relating to the commercial development of oil, natural gas or minerals. The proposed rules implement Sections 1502, 1503 and 1504 of the Dodd-Frank Act.

A description of the proposed rules, which may be found at the SEC’s website here, is provided below.

I. Conflict Minerals Disclosure Requirements

A. Summary

Section 1502 of the Dodd-Frank Act requires companies that file reports with the SEC to disclose whether conflict minerals necessary to the functionality or production of a product manufactured, or contracted to be manufactured, by the company originated in the Democratic Republic of the Congo (“DRC”) or an adjoining country (collectively, the “DRC Countries”). If such conflict minerals did originate in the DRC Countries, the company must submit to the SEC and upload to the company’s website a conflict minerals report that describes measures taken to exercise due diligence on the source and chain of custody of such conflict minerals. Measures taken must include an independent private sector audit of such report submitted. The report must contain a description of the products manufactured that are not DRC conflict free, the name of the entity that conducted the independent private sector audit, the facilities used to process any conflict minerals, the country of origin of the conflict minerals and the efforts to determine the mine or origin, with the greatest possible specificity, of such conflict minerals.

Please see full article below for more information.

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