Response to The Wall Street Journal Op-Ed on Dodd-Frank and Conflict Minerals
By Per Loof, November 29, 2016
In the November 14 edition of The Wall Street Journal there was an Op-Ed entitled, “How Dodd-Frank Led to More Mayhem in Africa.” I would be remiss if I didn’t share the response I sent to the editor. Too often, the negative of a situation is emphasized in the media and unfortunately, the positive side goes unreported.
As the Chief Executive Officer of KEMET Corporation (a U.S. based global manufacturer of electronic components and one of the world's largest users of tantalum), I felt compelled to share KEMET's story, which provides vital context to those who argue, like Mr. Watkins does, that Dodd-Frank's conflict minerals requirements have not had a positive impact on the people of the Democratic Republic of Congo (DRC) and on the global business community.
Rather than avoid the DRC, KEMET used Dodd-Frank as an impetus for developing an innovative and socially sustainable solution to sourcing conflict-free tantalum from the DRC. This solution provides tantalum to many of the largest electronics companies in the world.
To realize this vision for KEMET and our customers, the KEMET Partnership for Social and Economic Sustainability was formed. This project developed the electronics industry’s first vertically integrated, closed-pipe, sustainable sourcing models. We get tantalum ore directly from a conflict-free mine in the DRC that is operated according to a special agreement between KEMET, our mining partner and the people of the mining town of Kisengo. The closed-pipe (it is processed and smelted by KEMET) ensures no tantalum from non-conflict-free sources enters our supply chain.
Prior to our involvement in Kisengo, their mining process was old-fashioned and the community did not have access to stable health and educational resources. Our investments have modernized the mine, making it more efficient and safer for the workers. We built a new hospital for the people of Kisengo that has served over 30,000 cases in the last 30 months. We built a new school that now has 1,530 students and outfitted with resources to continue operating. We established access to clean water, installed solar powered street lights and refurbished basic infrastructure (roads and bridges). We have not stopped there and continually strive to make our investments in Kisengo more impactful and self-sustaining.
The business value is clear: through this initiative we now better control our costs and supply a wide range of tantalum powders to support market demand. The economic benefit to KEMET alone is “multiple multiples” of what we have invested in the village to improve the life of the miners and their families. We have shown that it is possible to succeed while being economically and socially responsible.
The DRC has vital natural resources that drive the creation of economic value. These resources and their local communities must be cherished and protected. Dodd-Frank has certainly helped companies like KEMET to embrace this need and envision better solutions for our stakeholders. Please go to www.kisengofoundation.org to learn more.