About KEMET’s Closed-Loop, Conflict-Free, Tantalum Supply Chain
By Per Loof, November 25, 2014
Just about everybody in the electronics industry has been affected by Dodd-Frank – the legislation that requires the use of conflict-free tantalum. We’re one of the leading manufacturers of tantalum capacitors in the world, so it really impacted us.
We came up with a unique way to address the issue – one that not only ensures our products are conflict-free, but also benefits our customers in other important ways. Like some other suppliers, KEMET utilizes a “closed-pipe” supply chain. This in itself isn’t unique. What is unique is that our vertical supply chain is fully integrated and that includes our own smelting and refining facilities.
We get tantalum ore directly from a conflict-free mine in the Democratic Republic of Congo that’s operated according to a special agreement between KEMET, our mining partner MMR and the people of the mining town of Kisengo. Prior to our involvement, the mining process was basically an old-fashioned, hand-held panning endeavor, now the mine has been modernized and industrialized. We could have stopped there and used independent compliant facilities to complete our supply chain, but we wanted to accomplish something even bigger.
To complete the supply chain, we built an ore processing facility in Matamoros, Mexico and we bought a K-salt to tantalum powder production facility in Carson City, Nevada. It’s a world-class facility where we produce capacitor-grade tantalum powder with the industry’s highest purity standards and shortest lead time.
All of our facilities have been audited and validated as compliant with the Conflict-Free Smelter Program of the Electronic Industry Citizenship Coalition and Global e-Sustainability Initiative. Total KEMET investment to date is in excess of $110 million and the benefit to the company is now around $12 million per quarter.
It’s quite an investment all the way around, but we think the benefits are worth it. All of our planning systems are integrated, so we can be exceptionally responsive to our customers. By controlling the entire process, we can better control our cost and supply a wide range of powders to support market demand. It’s a real achievement – unique, practical and responsible. In my book, you can’t ask for anything better than that.