European Precious Metals Federation Conflict Minerals-Implications for the European Precious Metals Industry 24 September 2017 | Vicenza, Italy

Content Challenges EPMF introduction The EU conflict minerals regulation in a nutshell Challenges Opportunities The overall picture Conclusions

EPMF introduction http://www.epmf.be/

The EU conflict mineral regulation in a nutshell Regulation applies from 1 January 2021 Final adoption expected by June 2017 22 November 2016 –Agreement 5th trilogues meeting 18 December 2015 -Council of Ministers' mandate 20 May 2015 –European Parliament mandate 5 March 2014 –European Commission proposal The EU conflict mineral regulation in a nutshell A summary: Mandatory due diligence for European Union importers of 3TG minerals and metals where annual import volumes exceed thresholds (100kg/y for gold) Global geographical scope: due diligence irrespective of origin Obligations for EU importers consistent with the 5-step framework of and risks set out in the OECD Due Diligence Guidance EU Recognition of supply chain due diligence industry schemes largely based on OECD methodology and criteria EU list of global responsible smelters/refiners

The challenges Recognition of existing schemes OECD Alignment process of existing industry’s schemes 5 existing industry’s schemes in the Pilot Project Currently re-assessment phase – will be used as a mechanism to recognize existing schemes Conclusions are expected by the end of 2017 Definition of the conflict and high-risks areas Guidelines for identifying conflict-affected and high-risk areas under preparation by the Commission End of 2017 100 kg/year threshold for gold Some EU authorities understand the risks related to high thresholds 95% of all imports of 3TG 100 Kg on refined gold is still too high! « Selective » mandatory scheme Additional tools for downstream companies BUT on voluntary basis! Significant loopholes!

The opportunities EU list of responsible smelters/refiners White list of smelters and refiners will be published Recognition of recyclers compliance Exemption of recycled materials BUT recognition of compliance of recyclers is ensured view the White list of smelters and refiners

The overall picture European Partnership for Responsible Minerals (EPRM) The EPRM is a joint voluntary initiative by civil society groups and non- governmental organisations (NGOs), industry, and government. Its main goals are to: create a forum in which members can exchange experiences of procuring minerals and metals responsibly invest in conflict-affected and high-risk mining areas to make mineral extraction sustainable For more info: http://europeanpartnership-responsibleminerals.eu/

The overall picture OECD Minerals Risk Handbook OECD initiative for a Minerals Risk Handbook to cover additional minerals apart from 3Ts and Gold. Encourage due diligence for responsible supply chains of ALL minerals – more specifically to help enterprises to implement OECD due diligence guidance. The 1st version of The Handbook will be in hard-copy but is also exploring possibility of an online facility (with the European Partnership on Responsible Minerals). The methodology has been presented early May 2017 The Handbook will be released in December 2017 The OECD will hire a consultant to fulfill all data needed by end of 2017

Conclusions Important to ensure that the existing schemes in the PMC industry are recognized by the EU Need to review Gold threshold asap Pressure on the supply chain and especially on users will increase via new recommendations from the Commission Mega trend: extend responsible sourcing beyond the 3Ts and Gold Increase of the need to work on the ground!