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Metalshub Enables Ethical Metals Sourcing with Smelter ID Feature

Metalshub has recently introduced a new feature designed to promote ethical metals sourcing that will work to help protect billions of dollars’ worth of investment in the metals industry from Environmental, Social and Governance (ESG) risks.

Features

Suppliers must enter a smelter identity (smelter ID) for tungsten, tin, and cobalt listings during the proposal creation process on the Metalshub platform. This ID will then be matched with the conformant and active smelter list provided by the Responsible Mineral Initiative (RMI) database to verify that the material from that smelter conforms to guidelines. Augmenting a purchasing tool with verifiable IDs promotes responsible buying behaviour, makes the procurement trail audit safe as smelter details are captured in the legal contract and drives compliance with Frank-Dodd Act (Sec 1502) and EU ‘Conflict Material’ regulations (2017/821).

Supply chain integrity is set to become an increasingly important topic as legislation improves and consumers become more discerning in their purchasing decisions. An increasing amount of legislation is emerging to define acceptable standards as the metals market becomes more attuned to the risks.

RMI is one of the oldest and most widely accepted organisations for ensuring conformance of smelters to legislation. Its 32 governing principles are equivalent to most other governing principles of other similar organizations, some of which are material-specific (Figure 1).

Compliance standards by the RMI guidelines are particularly relevant because these will form the basis for how different smelters are verified in the Metalshub platform. The RMI standards split their lists into three categories depending on the status of their operations – active, conformant, and inactive. All eligible companies are required to implement the necessary standards “at site level” which includes specific procedures and corporate policies which are prescriptive.

Active companies are defined as those that are committed to an assessment. RMI states that an active company “represents smelters and refiners that have committed to a Responsible Minerals Assurance Process (RMAP) assessment” and “maybe in the pre-assessment, assessment, or corrective-action phases of the assessment”. This gives the buyers on Metalshub a robust understanding of the ethical characteristics of the material they are buying. Equally, cross-referencing between lists – RMI and Metalshub – will help buyers understand (by elimination) which metals companies are ineligible and which are “inactive” (i.e., eligible but without recent commitment).


Not all smelters can implement these measures which may render them ineligible for RMI accreditation which will become apparent to suppliers via details on Metalshub. Furthermore, third-party assessments are required “every three years to maintain standards” so that there are no conflicts of interest built into the assurance process. To make sure that eligibility is guaranteed, RMI clearly defines the qualifications and competency requirements of specific people including the auditor.

Metalshub’s smelter IDs will help mitigate the risk of noncompliance to this point of the supply chain. Buyers on Metalshub will no longer receive offers from suppliers having material from a non-conformant smelter, reducing ESG risks. Higher ESG standards will guarantee a future where the customer of a finished, consumer manufacturer (e.g., Tesla, Apple, Google etc) can be sure that their electric vehicle does not include unethically sourced cobalt in its steel, or that the tin in their phone was not mined in a conflict area.

Supply-chain transparency will not only improve the quality of end-consumer choices but protect the consumer brands that they interact with and help them to avoid value-destructive headlines such as “Congo, child labour and your electric car” in the Financial Times on 7 July 2019. These types of negative brand attention challenge a metal and mining company’s licence to operate and pose one of the single biggest risks to mining and metal companies globally. Unethical behaviour is also wrong by OECD and widely accepted values regardless of its legality.

The smelter ID functionality has been live to procurement participants on Metalshub since 1 October 2021. While initially limited to conflict materials, Metalshub is committed to driving compliance and supply chain integrity by extending it to other materials and is exploring ways to track sustainability data from the IDs.



About Metalshub

Metalshub is one of the pioneers of digital transformation in the metals industry. The software start-up was founded in 2016 in Düsseldorf by Dr. Sebastian Kreft and Dr. Frank Jackel with the mission to connect companies in the industry with a digital platform. Digital supply chains can help reduce costs and CO2 emissions. More than 1,200 companies are already using Metalshub, including more than 300 steel mills and foundries that have digitised their purchasing processes with Metalshub. Since the launch of the platform in 2017, more than 1 billion USD in trading volume was concluded through Metalshub.

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