Conflict Minerals Due Diligence

Conflict minerals due diligence is the oldest of the EU supply chain regimes now converging on product passports, and it is the one with the most operating experience behind it.

That makes it worth understanding not only for companies in scope, but for anyone facing the newer battery and deforestation obligations, which reuse its structure.

What the regulation requires

Regulation (EU) 2017/821 places obligations on EU importers of tin, tantalum, tungsten and gold — the 3TG minerals — above defined volume thresholds.

The obligation is to conduct due diligence following the OECD framework, not to guarantee that no material originated in a conflict-affected area. That distinction is fundamental and routinely misunderstood.

A company doing all five and finding risk has complied. A company doing none and happening to have clean sources has not. The obligation attaches to the process rather than to the outcome.

The smelter is the chokepoint

The practical design of the whole regime rests on one observation: mineral supply chains narrow dramatically at the smelter or refiner, and widen again afterwards.

Auditing a few hundred facilities is achievable. Auditing thousands of mines or millions of products is not. So the regime audits the narrow point, and downstream companies satisfy their obligation by establishing which smelters are in their chain and whether those smelters are certified.

What downstream companies actually do

A manufacturer buying components containing 3TG has no realistic route to the mine, and the regime does not ask them to find one.

• Identify smelters in the chain, usually through a standard industry template passed up through suppliers.
• Check certification status against recognised audit schemes.
• Assess and respond where a smelter is uncertified or a red flag appears.
• Report on the process and its findings.

The first step is where the effort concentrates and where it most often stalls. Suppliers frequently do not know their own smelters, particularly for components bought as finished assemblies, and the request has to propagate several tiers before anyone can answer it.

The lesson about disengagement

The most important thing this regime taught is a lesson the newer obligations explicitly incorporated.

This is directly relevant to anyone approaching battery due diligence under Regulation (EU) 2023/1542 or deforestation due diligence under Regulation (EU) 2023/1115. The instinct to eliminate exposure by changing suppliers is understandable, is frequently the wrong answer, and is increasingly treated as such.

Where the regime strains

Two structural weaknesses are worth knowing about, because the newer regimes inherit both.

The first is recycled material. Metal recovered from scrap has no meaningful origin to trace, and it is treated differently, which creates an incentive to describe material as recycled that is hard to verify without chain of custody evidence.

The second is that certification of a smelter tells you about the smelter’s practices, not about the specific consignment you received. A certified smelter processes both certified and uncertified input; what you get depends on the chain of custody model applied, which is precisely the mass balance question.

How this connects to the passport

Due diligence conclusions are exactly the kind of assertion a passport is designed to carry, and the connection improves both sides.

For the passport, due diligence provides a mature model for how upstream claims are evidenced and audited. For due diligence, the passport provides a route by which a conclusion reached once travels with the product rather than being re-established by every downstream buyer through a separate questionnaire.

The efficiency gain there is substantial. A smelter certification currently propagates downstream through thousands of bilateral supplier surveys, each asking the same question and receiving the same answer months apart.