One Bad Apple Supply Component: Spoiling the Whole Bin of Products?

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Apple’s sleekly designed and well-made products have become more than a brand — these days, they’ve become a lifestyle. Politically, Apple leans toward the progressive, making public statements against Proposition 8 and promoting environmental stewardship. For the first time ever, Apple products are outselling those of Microsoft, and sparsely decorated Apple stores are constantly packed with consumers testing the latest wares. Apple computers have finally branched out of the “creative and into the mainstream. We run a Mac office here at MetalMiner, in fact.

Needless to say, the hype around the release of iPhone 4 was huge. So huge, in fact, that it crashed sole carrier AT&T’s website on the day pre-orders were allowed. Boasting a new stainless steel casing that doubles as an antenna, video capabilities that I’ve read rival the Flip camera, and a new Retina display that makes it probably the best-resolution smart phone on the market, what’s not to want? We here at MetalMiner even wrote a piece touting the  “Elegant Design: Steel-Bound iPhone 4

The phone is great on the outside — but what about when we dig into Apple’s supply chain to examine the insides? At a recent opening of a new Apple Store in DC, The Enough Project, a campaign of the Center for American Progress staged a protest, calling on Apple to “commit to providing conflict-free minerals in their products, according to this article. After all, take into consideration that “in every iPhone & and just about every other cell phone for that matter”comes four minerals essential to manufacturing process of many consumer electronics devices: tin, tungsten, tantalum, and gold.

In other words, some of these metals are abundant in places like Rwanda and the Congo, where the profits from the mining (to the tune of $180 million) “indirectly fund groups like the Democratic Forces for the Liberation of Rwanda, members of which committed the mass genocide in 1994. We wrote about a similar problem for Intel who also sources these minerals See Part 1, Part 2, and Part 3 here back in May.

The Enough Project “is calling for three concrete steps that electronics companies should take. Besides tracing their minerals from extraction to use, companies should also audit the mining and trade practices and ultimately certify that the minerals they use are conflict free. Implementing those steps would cost less than a penny per device sold, according to a spokesperson.

And the US Government has responded with “The Conflict Minerals Trade Act, a bill that “requires importers of potential conflict goods to certify whether or not their imports contain conflict minerals and the United States Trade Representative (USTR) will report to Congress and the public which companies are importing goods containing conflict minerals and “requires industry to use outside auditors to determine whether refiners are indeed conflict-free.

Excellent — problem identified, regulations created, problem mitigated! But is it that simple? A person in line for the Apple Store’s grand opening suggested simply that “[Apple] could get the same components, but in a different way. In considering problems such as these, one must really take into consideration the complexity of managing a global supply chain. When we truly break down the steps it takes to get raw materials from the mine and into your iPhone, the process becomes quite complicated. Therefore, if we fully ban the use of conflict metals, where can Apple find alternate sources of these “same components to keep up with our consumer demand for the Apple products we know and love? Answers may be forthcoming, but until then, I have to be somewhat cynical and say that the people camping on the sidewalk for their new iPhone 4 probably just want their iPhone 4, no matter what’s inside.

— Sheena Moore

Comments (2)

  1. R.Matthews says:

    “Therefore, if we fully ban the use of conflict metals, where can Apple find alternate sources of these “same components” to keep up with our consumer demand for the Apple products we know and love? ”

    Other sources in place or can be developed to fill any supply holes with the tantalum and the other minerals mentioned. Also if encouraged the supply from the DRC can be cleaned up though i expect that to be a long road to get to that end.

    Robert
    P.s notice you mentioned Commerce resources before a bit of research should show you they are not a credible alternative.

  2. Of the conflict minerals, tantalum is only one. While the majority of tantalum in recent years has come from the DRC, it does not mean that there is none anywhere else. If major electronics companies demand that their components are free of conflict minerals, the market could EASILY adjust.

    There is an active mine in Brazil. There are a few mines in Australia that could be reactivated. There are also companies conducting exploration and advancing projects to potentially becoming concentrate producers.

    The policy initiatives such as HR4128 (Conflict Minerals Trade Act) are going to force responsibility onto the electronics companies who are directly using components using conflict minerals. This will affect companies such as APPLE, Research in Motion, Nokia, Samsung, Nintendo, Microsoft, Dell, etc.

    End-users are going to need to address this issue head-on if they are going to escape the issue without damage to their brands. As an example, watch a newly released parody video: http://www.youtube.com/watch?v=5Ycih_jMObQ

    No Blood Minerals
    http://www.facebook.com/NoBloodMinerals
    http://www.twitter.com/NoBloodMinerals

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