Due Diligence Report on Responsible Mineral Procurement
1、 Company Information (All Sources)
Zhuzhou Gaoli New Materials Co., Ltd. (FIR) was established in 2006 with a registered capital of 3.076923 million yuan and a CID number of CID002505. Company address: Jiulong Industrial Zone, Yanling County, Hunan Province, postcode: 412500, phone number: 0086-731-26291313. The company is committed to the production of tantalum niobium metal and its products, mainly including tantalum powder, tantalum bars, and tantalum parts. FIR is fully committed to avoiding the use of conflicting materials. We strive for excellence, while providing customers with satisfactory products, we have developed our own responsible procurement supply chain policy. We promise to take on corresponding social responsibilities and strictly comply with OECD guidelines and relevant laws and regulations.
Processing raw materials: potassium fluotantalate and tantalum waste
The period covered by this report is from October 1, 2020 to July 1, 2022. The responsible supply chain policy has been reviewed and approved by senior management, and the management is committed to supporting the implementation of this policy. It has been widely disseminated to relevant stakeholders (suppliers, customers, employees, etc.) and has been published on the company's website:
2、 RMAP Evaluation Summary (All Sources)
As a responsible company, FIR has always actively supported and participated in the annual audit of RMAP. From 2014 to 2020, FIR has undergone 6 audits, with the last audit passed on October 15, 2020. Based on this audit, the RMI Audit Committee (ARC) decided that Zhuzhou Gaoli New Materials Co., Ltd. complies with the (2017) Tantalum Audit Manual. This validity period is valid for one year from the date of the decision, i.e. from October 15, 2020 to October 15, 2021; Due to the COVID-19 incident, our original planned audit on October 15, 2021 had to be postponed to June 24, 2022, and the company was in the process of active rectification. In the RMI system, FIR is the status of a compliant smelter, and the due diligence report is published on the company's website http://www.chinatanb.com/
3、 Company Supply Chain Policy (All Sources)
To avoid the use of conflict minerals that directly or indirectly finance or benefit armed groups and/or involve other serious human rights violations in high-risk and conflict affected areas, the company has developed its own supply chain policy, This supply chain policy fully complies with the third edition of the OECD Guidelines for Responsible Supply Chain Due Diligence of Minerals from Conflict Affected and High Risk Areas (OECD Guidelines). It covers all the risks identified in Appendix 2 of the OECD Guidelines and is applicable globally. Gongke promises to promptly address any risks identified in Appendix 2. This policy has been reviewed and approved by senior management, who are committed to supporting its implementation. This policy has been widely disseminated to relevant stakeholders (suppliers, customers, employees, etc.) and can be found on the company website http://www.chinatanb.com/ Review.
4、 Company Management System (All Sources)
FIR has established a strict and responsible mineral supply chain management system, developed a series of integrated supply chain management, and prevented any conflict between unknown materials and raw materials into the supply chain by taking the following measures and purchasing and never using procedures and raw materials affected by conflict areas, so as to prevent mineral exploration and trade from becoming the source of conflict, human rights violations and insecurity. Zhuzhou Gaoli strictly adheres to its commitments in supply chain policies and has established internal due diligence processes in the following areas:
——FIR has issued the 'Supplier Management Policy', appointing a General Manager to oversee the design and implementation of due diligence plans and risk management, and coordinating the work of relevant departments (including Operations Management Department, Quality Assurance Department, Finance Department, production units, and warehouses) to ensure that each department adheres to due diligence, implements responsible mineral supply chain management, and reports any warning signals and potential risks discovered.
——FIR conducts annual due diligence management system training for key personnel in all relevant departments in accordance with the requirements of responsible mineral supply chain management. If there are updates to the plan, the company will conduct additional training as needed.
A. Internal control system
——FIR has updated its due diligence management system to align it with OECD guidelines and RMAP.
——FIR has communicated the latest supply chain policies and procurement requirements to all identified upstream suppliers.
——Open and transparent procurement policy
1) The raw material procurement statement has been posted on the FIR company website, ensuring that every supplier has a clear understanding of our procurement policy.
2) The "Responsible Mineral Supply Chain Management System" and "Supplier Management Policy" have been issued to various departments within the enterprise, so that every employee is aware of and complies with the requirements.
——Control Procedure for Raw Material Procurement
The supplier management policy has formulated the "Supplier Management Policy", "Regulations on Traceability of Origin of Tantalum Containing Raw Materials and Products", "Regulations on Batch Number Management of Tantalum and Niobium Raw Materials", "Regulations on Transportation Management of Tantalum and Niobium Raw Materials", "Regulations on Inspection and Acceptance Management of Tantalum and Niobium Mines", "Regulations on Risk Assessment Management of Raw Material Supply Chain", and "List of Applicable Laws and Regulations" Control procedures such as the "Supplier Anti Corruption and Bribery Commitment Letter" and the "KYC Understanding Supplier Management Regulations" are used to restrict and prevent any "conflicting materials" and unknown materials from entering FIR's supply chain.
——FIR conducts due diligence on suppliers and maintains continuity. In accordance with OECD guidelines and the audit requirements of the Responsible Minerals Initiative, due diligence is conducted annually on raw material suppliers, and the legality, quality assurance level, and complexity of suppliers are verified through re evaluation as a basis for adopting or revoking their supplier qualifications. While maintaining communication with downstream customers, FIR provides CMRT forms to downstream customers as required by RBA to ensure due diligence in the supply chain.
——FIR has established a risk assessment committee under the RMI system operation management leadership group, and has appointed a general manager, purchaser, and RMI responsible specialist. They are responsible for evaluating all information related to suppliers and raw materials, determining the rationality of raw material sources (such as origin, production capacity, type characteristics, etc.), and evaluating the investigated origin, transportation process, and suppliers according to warning signals, and discovering warning signals, Investigate warning signals and issue handling opinions
——Since 2009, FIR has officially become a member of the International Tantalum and Niobium Research Center (T.I.C.), following T.I.C.'s new reports in real-time to understand new policies; At the same time, we contacted the ITSCI organization in December 2020 and applied to join the upstream mechanism to ensure the legality and compliance of the supply chain. Currently, the procedures are being processed.
——Actively fulfilling social responsibility, establishing a compliant corporate image, operating and fulfilling social responsibility. The company always closely integrates the economic development of the enterprise and fulfills social responsibility, ensuring that under the premise of law and law, it fully fulfills social responsibility through activities such as technological innovation, safety production, employee rights, environmental protection and energy conservation, emission reduction, and ethical management.
——We will strictly comply with the international transportation standards for Class 7 substances, and we ensure that the disposal, storage, and transportation of hazardous substances comply with relevant laws and regulations. We guarantee that there will be no leakage during transportation and production, thereby preventing adverse effects on the environment and human health
——FIR has established an appeal mechanism for RMI, established contact channels, collected relevant appeal information, including the appeal email address, phone number, and responsible person, and accepted supervision from all sectors of society. During the period covered by this report, the company did not receive any appeals from relevant parties (affected individuals or informants).
——There are multiple ways to train employees. THXC trains through centralized training, OA promotion, conference promotion, display board promotion, RMI official website training academy video (WeChat promotion), and other methods. All employees, including the general manager, fully understand the requirements of OECD guidelines and RMAP verification.
B. Record retention system: The company requires all records related to responsible mineral supply chain management to be kept for at least five years, correctly used and securely stored in the company database.
5、 Risk identification (all sources)
Firstly, the company has a set of CAHRAS identification and control procedures, including the resources used, applicable standards, and review frequency. The risk assessment committee for raw material procurement under the company has conducted risk identification for all tantalum containing raw material procurement in accordance with the provisions of the high-risk identification procedure, and recorded the identification results. CAHRA has established a 'Qualified Supplier List'. A review of the relevant sanctions list was conducted on all individual suppliers and companies, and no sanctions information was found on any individual suppliers or companies during the reporting period.
Secondly, to understand the supplier process, the company has conducted basic due diligence on all trading parties. The company has established a KYC process to collect and update information on trading parties (suppliers), including at least the supplier's business license, shareholder identity information, supplier legal status, scope of goods, and origin of goods. Relevant supporting documents are strictly collected,; At the same time as requiring all suppliers to complete and return KYC related forms, the company has established a discrepancy review process. If inconsistencies, errors, or incomplete information are found, the company will require the other party to provide correct, consistent, and complete supporting documents again. Otherwise, they will not be included in the qualified supplier list. We have carefully evaluated the KYC of each supply chain purchased by the company. During this report period, it was found that one supplier's KYC questionnaire was incomplete. Our company has promptly conducted a variance review and obtained relevant KYC support documents. All of our suppliers have filled out and returned this form, and the discrepancies have been resolved in a timely manner.
Thirdly, identify and evaluate supply chain risks. The company has established a "Supply Chain Risk Identification and Evaluation Procedure" for risk identification and evaluation of the supply chain, which analyzes the potential risks of all suppliers and their raw materials to ensure that the warning signals mentioned in the supplementary content of the OECD guidelines on tin, tantalum, and tungsten are not triggered; Establish a difference review procedure to conduct a difference review of suppliers and their raw materials. No relevant differences related to raw materials were found during this reporting period. After identifying and evaluating the risks of all suppliers, the company issued corresponding risk assessment reports. After all the above actions are completed, our company will proceed with the next procurement process.
6、 Risk management (high-risk areas)
Based on the above risk identification methods, an enhanced due diligence plan has been carried out for raw materials and supply chains identified as "high-risk". This includes: 1. evaluating the activities and relationships of upstream suppliers; Identify the location and quantitative conditions for mining, trading, processing, and export of ore; Conduct on-site risk assessment if necessary. During this year's procurement process, many suppliers recommended raw materials from high-risk areas to our company. However, considering that we currently do not have the ability to conduct enhanced due diligence in some high-risk areas, our company immediately rejected the suppliers and did not engage in business with them.
At the same time, risk identification, assessment, and management measures were taken for all high-risk countries involved in the procurement of raw materials in the company's supply chain during the reporting period. Our company has taken certain risk mitigation measures for procurement from high-risk countries in the company's supply chain, and we have promptly terminated our cooperation for supply that failed to mitigate the risks.
- Event summary report 2) Mine inspection recommendations, including a list of mines with potential risks (it is recommended to conduct enhanced due diligence and risk assessment from companies purchasing from these mines) 3) Monthly reports from countries and regions, reviewing the general situation on site 4) Data summary and other reports. Regardless of whether it is high-risk or low-risk, fir requires all suppliers to provide the following document information, This information pertains to each transaction: the supplier's due diligence plan, including the KYC questionnaire, company registration certificate or business license, and mining certificate (if it is a mining company). Pay close attention to governance information related to the operation/national background of local companies. Collect supply chain supervision chain documents for each transaction to ensure understanding of transaction sources and transportation paths.
- In summary, in our future work, our company will strictly follow the requirements of the OECD Organization for Economic Cooperation and Development to conduct due diligence to ensure that the company's due diligence system can fully identify and manage the risks related to the demonstration supply chain policy in Appendix 2 of the OECD Guidelines, and adhere to responsible procurement.
Zhuzhou Gaoli New Materials Co., Ltd
March 30, 2022