Today, the London Metal Exchange (LME), the world’s largest market for minerals, launched a formal consultation on the proposed rules for responsible mineral sourcing that will be applicable to all LME-listed companies. The proposed rules draw on the EITI reporting requirements and the OECD due diligence guidelines.
The LME is seeking to ensure that minerals produced in conflict affected, high-risk areas, meet international transparency and accountability standards. The proposed rules will require all LME listed companies to undertake a “Red Flag Assessment” by the end of 2024. It is proposed that this assessment will require producers to confirm if they have disclosed data in countries implementing the EITI. In 52 countries, the EITI is playing a leading role in strengthening governance and addressing corruption risks in the mining sector.
Mark Robinson, Executive Director of the EITI welcomed this collaboration and the explicit reference to EITI reporting requirements:
"By ensuring a high degree of transparency in commodity producing countries, the EITI works to mitigate the risk of corruption and other illegal activities at this critical juncture in global supply value chains" he added.
The EITI Standard is applicable to both large scale mining ("LSM") and artisanal and small-scale mining ("ASM") in all its member countries. In addition to disclosure of payments to governments, EITI implementing countries disclose information on the legal framework, the process for allocating licenses, information on license holders including geographical coordinates and beneficial ownership, and data on production, export and employment.
In each EITI implementing country, the process is overseen by a national multi-stakeholder group comprised of government, industry and civil society. This collaborative approach has been central to the EITI’s success.
Close coordination between the EITI and the LME will ensure a streamlined approach for reporting and verification. The EITI also works to improve transparency in commodity trading, which contributes to improving transparency in the entire supply chain.
To find out more about the EITI work on this issue, see the following links on the EITI website:
- EITI work on transparency in Artisanal and Small Scale-Mining (ASM) https://eiti.org/ASM
- EITI work in transparency in commodity trading https://eiti.org/commodity-trading
- Complementarities between the EITI and the OECD https://eiti.org/document/oecd-eiti-standards-for-transparent-mineral-supply-chains.