The world’s largest centre for the trading of metal futures and options will insist that its members prove that their operations do not fuel conflict or human rights abuses. The London Metal Exchange announced this week that it will update its “brand lists”—the quality standards expected of minerals traded on the bourse—to include sourcing criteria.
The move comes following concerns in 2017 over the provenance of cobalt that was being traded on the exchange. Rights groups warned that the material, used widely in the manufacture of mobile phones, was most likely sourced from the Democratic Republic of Congo, where illicit mines sometimes use child labour and funnel money to militant groups accused of broader human rights violations.
Under the new rules, which come into force in 2022, members of the exchange will need to undergo a risk assessment based on where and how they source their metals. Those judged to be high-risk will need to adopt the OECD’s responsible sourcing standards and to report their exposure to corruption and bribery risks using a framework developed by the Extractive Industries Transparency Initiative, an independent mining industry watchdog.
“Global consumers rightly demand action on responsible sourcing—and our industry must listen,” Matthew Chamberlain, the LME’s CEO, said. “The LME is taking action because it is the right thing to do, but also because the value of our market is based on providing metal which is acceptable to those consumers, and because the metals sector looks to us to provide leadership on these important topics.”
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