JOHANNESBURG (miningweekly.com) – The US’s Dodd-Frank Act, which allows consumers to know if human rights atrocities have tainted their gold, is not intended to hurt ethical African gold miners, says US Assistant Secretary of State for Economic, Energy and Business Affairs Jose Fernandez.
Fernandez was responding, at the Gordon Institute of Business Science in Johannesburg, to AngloGold Ashanti sustainability manager Jessica van Onselen, who said that electronics giants like Apple, Intel and Motorola intended giving African gold a wide berth to avoid the onerous implications of the Dodd-Frank law.
“We’re very concerned about the stigmatisation of African gold and what that piece of legislation does to such a vital industry on the African continent,” Van Onselen said.
There is concern that Dodd-Frank may result in an increasing number of American gold users steering clear of African gold in order to avoid the red tape involved in its use.
JSE- and NYSE-listed AngloGold Ashanti, which is South Africa’s largest gold-mining company, has a sizeable exploration programme in the Democratic Republic of Congo (DRC), to which the US law makes specific reference. The company is also partnering the LSE-listed Randgold Resources at Kibali in eastern DRC, where a large gold deposit is being developed.
In the same vein as the Kimberley Process that aims to eradicate "blood diamonds", Dodd-Frank seeks to cut off the source of finance to warlords from “conflict” gold, wolframite and cassiterite, which are used in electronics, jewellery, construction tools, weapons systems and aerospace technology.
Section 1502 forces the US Securities and Exchange Commission to impose disclosure and, in some instances, auditing requirements on publicly traded companies that use “conflict minerals” to manufacture their products.
Signed into law by President Barack Obama in 2010, the law gets its title from the surnames of US politicians Chris Dodd and Barney Frank.
Fernandez said that the DRC’s tragedies of war could not be ignored, but that it was not the intention of the law to hurt ethical mining companies, or to induce the withdrawal of miners from the DRC.
While expressing confidence that compliance steps would be taken and that lawful miners would not be impacted negatively, he said “we may have to do something else”, if that turned out not to be the case.
“One of the things that we simply cannot do is adopt the ostrich approach, but we believe that companies that believe in ethical practices will be alright,” he replied.
Some have also taken heart from Fernandez’s seeming tacit support for the Organisation for Economic Co-operation and Development’s (OECD’s) latest due diligence guidance document for the responsible supply of minerals from conflict areas.
Large reputable gold companies are generally able to demonstrate that the gold they mine does not in any way fuel or fund conflict, and many of them are anxious to prove that.
High control standards have already been made public in response to Dodd-Frank, like the OECD standard and the Responsible Jewellery Council initiative, and more are expected to follow.
For instance, Mining Weekly Online understands that the World Gold Council may soon publish a chain-of-custody standard and a conflict standard, as part of a responsible gold project headed by Terry Heymann.
South African gold miners are believed to have been integral to the development of the chain-of-custody standard, which some are already piloting at mine sites.
More than 40 countries have agreed to promote the OECD code of conduct while the organisation puts a “tougher” process in place to mediate complaints against suspected companies.
Although DRC North Kivu mining head Emmanuel Ndimubanzi has expressed concern that miners may cease investing in the area, reports indicate that several companies have agreed to implement the guidelines rather than vacate the eastern DRC.