Exhibit 1.02
Canon Inc.
Conflict Minerals Report
For the Period from January 1, 2013 to December 31, 2013
This report for the period from January 1, 2013 to December 31, 2013, is presented as a Specialized Disclosure Report on Form SD, to comply with Rule 13p-1 under the Securities Exchange Act of 1934.
1. | Introduction (Background to the disclosure of the Conflict Minerals Report) |
Established in 1937, Canon Inc. is a Japanese corporation with its headquarters in Tokyo, Japan, that develops, manufactures and sells professional and consumer imaging equipment and information systems. Canon’s extensive range of products includes office multifunction devices, laser multifunction printers, inkjet printers, digital production printing systems, digital cameras, digital camcorders, medical equipment and semiconductor manufacturing equipment. Consolidated sales for the 2013 fiscal year reached 3.7 trillion yen. For details of corporate activities please refer to our annual report filed on Form 20F.
Canon Inc. is listed on the New York Stock Exchange and is subject to the final rules issued by the United States Securities and Exchange Commission (“SEC”) to implement Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).
In response to Rule 13p-1, Canon Inc. conducted a “Reasonable Country of Origin Inquiry” (“RCOI”) for products manufactured or contracted to manufacture by Canon Inc. and its consolidated subsidiaries (“Canon” or “Canon Group”) from January 1, 2013 to December 31, 2013 (“reporting period”). The inquiry identified four types of minerals classified as conflict minerals—namely tin, tantalum, tungsten, and gold (“3TG”)—that originated in the Democratic Republic of Congo and its adjoining countries (“covered countries”) and did not come from scrap or recycled metals that were being used in some of the parts or materials that make up Canon’s products. In response, Canon Inc. conducted due diligence on the source and chain of custody of its conflict minerals (“due diligence”).
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2. | Canon applicable to the Conflict Minerals Report and products subject to disclosure |
As of December 31, 2013, Canon Inc. had 257 consolidated subsidiaries, of which 58 subsidiaries were manufacturing products or contracting to manufacture products in the reporting period. In total, 59 companies of the Canon Group including Canon Inc. conducted the RCOI. The subsidiaries that conducted the RCOI include certain marketing companies that contracted with manufacturers outside the Canon Group to manufacture items for sale outside the Canon Group.
The business operations of Canon can be divided into the following three categories: the Office Business Unit, the Imaging System Business Unit, and the Industry and Others Business Unit. In each of these units, electronic components and substrates which contain 3TG are used in the majority of products manufactured by or contracted for manufacture by Canon. The types of products included in each category that were within the scope of the RCOI are listed inAppendix 1.
3. | Basic principles regarding response to conflict minerals |
Canon Inc. established the “Basic Approach of the Canon Group Regarding Conflict Minerals” in September 2012. This has been published on Canon Inc.’s official website.
URL: http://www.canon.com/csr/conflict/policy.html
Basic Approach of the Canon Group Regarding Conflict Minerals
The term “conflict minerals” refers to certain minerals originating in the Democratic Republic of the Congo and adjoining countries in Africa, the profit from the trade of which, provided through the global supply chain, is alleged to be funding armed groups in that region.
U.S. legislation or OECD guidance regarding conflict minerals require companies to conduct a “reasonable country of origin inquiry” or due diligence on the entire supply chain to confirm that their products do not contain conflict minerals.
Seeking to ensure that customers can use Canon products with peace of mind, the Canon Group is working together with business partners and industry entities to identify the history of minerals used in its products with the aim of avoiding the use of conflict minerals.
The Canon Group would like our business partners to understand the international circumstances surrounding the conflict minerals issue and support us in not using conflict minerals. By cooperating with surveys and audits conducted by Canon Group companies, we expect our business partners, as members of the global supply chain, to join the Canon Group in carrying out the responsible procurement of necessary minerals.
(Note: The words of “conflict minerals” means 3TG related minerals or metals in the Dodd-Frank Act and the SEC Final Rule, while the Canon’s basic approach above uses the “conflict minerals” as 3TG related minerals or metals which are alleged to be funding armed groups in the covered countries.)
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4. | Step taken to identify risks in the supply chain and RCOI |
The RCOI and due diligence conducted by Canon followed the “Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas” (“OECD Guidance”). Canon took the steps described below in accordance with the five steps laid out in the OECD Guidance.
| a. | Step 1: Establish strong company management systems |
| - | In order to respond to the conflict minerals situation, Canon established a “Conflict Minerals Response Project Team” (“Team”) at its headquarters under the direction of a representative director in charge (Executive Vice President & CFO) in December 2010. Moreover, Canon designated persons to be in charge of the conflict minerals response at each of their global group companies involved in manufacturing or contracted manufacturing, thereby establishing a framework for conflict minerals response across the group in May 2011. |
| - | As stated above, Canon established the “Basic Approach of the Canon Group Regarding Conflict Minerals” in September 2012. |
| - | Canon carried out briefing sessions on the RCOI for its first-tier suppliers in the Canon Group’s major manufacturing bases in Japan, China, and Southeast Asia from November 2012 to February 2013. It also created and distributed a RCOI manual to them. |
| - | Canon obtained letters of agreement from major first-tier suppliers in the Canon Group confirming the understanding of Canon’s basic approach regarding conflict minerals and agreeing to cooperate with its surveys. |
| - | Canon has customized an in-house database system and introduced the “Conflict Minerals Information Management System” in order to allow surveys to be conducted efficiently and the data recorded to be linked to information on products and parts for risk analysis. These data records will be retained for five years. |
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| b. | Step 2: Identify and assess risk in the supply chain |
| - | To the extent possible, Canon identified each of the parts and materials used in the products that it manufactured or contracted to be manufactured during the reporting period, and carried out the RCOI directly at the source from which the parts or materials were purchased. |
| - | Canon used the EICC/GeSI Conflict Mineral Reporting Template (“CMRT”). The CMRT was published by the Conflict-Free Sourcing Initiative (“CFSI”) which is one of the projects of the Electronic Industry Citizenship Coalition (“EICC”) and Global e-Sustainability Initiative (“GeSI”). |
| - | Canon had responses from total of 4,100 first-tier suppliers of the Canon Group. |
| - | Once the responses from first-tier suppliers were analyzed, Canon identified that it is possible that a certain number of products contain parts or materials which originated in the covered countries. Accordingly, Canon conducted due diligence for the relevant first-tier suppliers. |
| - | Canon compared the smelters or refineries (“SORs”) identified through the RCOI against the list of the SORs certified under the Conflict Free Smelter Program (“CFS Program”), as published by the CFSI. |
| c. | Step 3: Design and implement a strategy to respond to identified risks |
| - | The head of the Team reported the progress of conflict minerals response activities to the representative director in charge as necessary. Moreover, the Team annually reported its progress to relevant directors of Canon Inc. and to the presidents of the relevant domestic and overseas subsidiaries. |
| - | Canon also participated in activities by the industry to address issues concerning conflict minerals. Canon Inc. was a member of the “Responsible Minerals Trade Working Group” of the Japan Electronics and Information Technology Industries Association (“JEITA”) during the reporting period. Canon Inc. held the role of co-chair for nine months within the period. |
| - | Moreover, through its role as a key member of the “Conflict Free Sourcing Working Group,” a joint initiative by members of the JEITA Responsible Minerals Trade Working Group and major Japanese automobile manufacturers, it is carrying out initiatives such as the implementation of joint briefing sessions for second- and third-tier suppliers, improvement of survey methods, and detailed inspection of information regarding SORs. |
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| d. | Step 4: Carry out independent third-party audit of supply chain due diligence at identified points in the supply chain |
| - | Canon Inc., through its activities with JEITA and the Conflict Free Sourcing Working Group, has an alliance with the EICC. We have carried out activities to identify SORs handling 3TG in Japan, and activities to encourage the SORs identified to join the CFSI’s CFS Program. We supported the activities of the EICC, which plays a leading role in the response to the conflict minerals issue. |
| e. | Step 5: Report on supply chain due diligence |
| - | In accordance with the Dodd-Frank Act and the SEC Final Rule, on or before June 2nd 2014, Canon Inc. will file a Form SD and Conflict Minerals Report (this report) with the SEC, and publish the same information on its official website. |
| - | In 2013, Canon Inc. reported its activities in response to conflict minerals in its Annual Report and Sustainability Report. |
5. | Survey results for the 2013 calendar year |
As the result of the RCOI and due diligence survey, Canon identified 172 SORs which were CFSI’s known SORs. Among these 172 SORs, 72 SORs were compliant with the CFS Program. Such 72 compliant SORs and the other 100 CFSI’s known SORs are listed in theAppendix 2. Meanwhile, Canon was unable to identify a majority of the SORs from our supply chain. As a result, Canon was unable to determine the origin of the 3TG used for the products of Canon Group based on the information provided by the identified SORs.
Further, according to the results of the RCOI and due diligence, Canon was unable to determine whether the 3TG used for the products of the Canon Group financed or benefitted armed groups in the covered countries.
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6. | Planned risk mitigation for 2014 onwards |
The following risk mitigation are planned to be implemented from 2014 onwards.
| - | Work towards improving the accuracy of supply chain surveys and collecting information on the necessary parts and materials in order to improve the accuracy of the evaluation at the product level through use of the “Conflict Minerals Information Management System.” |
| - | Review the risk evaluation procedure for first-tier suppliers considering the suppliers’ efforts related to conflict minerals issues. |
| - | Continue to communicate with first-tier suppliers to gain cooperation to obtain letters of agreement and review the scope of applicability for first-tier suppliers from which letters of agreement are obtained. |
| - | Continue to participate in industry groups and alliances such as JEITA and Conflict Free Sourcing Working Group and, through such activities, continue to support EICC’s initiatives. |
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Appendix 1
Business operations of Canon Group and major products that were within the scope of the RCOI
OFFICE BUSINESS UNIT
Office multifunction devices (MFDs)
Laser multifunction printers (MFPs)
Laser printers
Digital production printing systems
High speed continuous feed printers
Wide-format printers
IMAGING SYSTEM BUSINESS UNIT
Interchangeable lens digital cameras
Digital compact cameras
Digital camcorders
Digital cinema cameras
Interchangeable lenses
Inkjet printers
Large-format inkjet printers
Commercial photo printers
Image scanners
Multimedia projectors
Broadcast equipment
Calculators
INDUSTRY AND OTHERS BUSINESS UNIT
Semiconductor lithography equipment
FPD (Flat panel display) lithography equipment
Digital radiography systems
Ophthalmic equipment
Vacuum thin-film deposition equipment
Organic LED (OLED) panel manufacturing equipment
Die bonders
Micromotors
Network cameras
Handy terminals
Document scanners
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Appendix 2
1. | List of the SORs which were compliant with CFS Program and were identified through Canon’s supply chain |
| | | | |
Metal | | SOR | | Country/Region |
Gold | | Western Australian Mint trading as The Perth Mint | | AUSTRALIA |
Gold | | Umicore SA Business Unit Precious Metals Refining | | BELGIUM |
Gold | | AngloGold Ashanti Córrego do Sítio Minerção | | BRAZIL |
Gold | | CCR Refinery – Glencore Canada Corporation | | CANADA |
Gold | | Johnson Matthey Ltd | | CANADA |
Gold | | Royal Canadian Mint | | CANADA |
Gold | | Allgemeine Gold-und Silberscheideanstalt A.G. | | GERMANY |
Gold | | Heraeus Precious Metals GmbH & Co. KG | | GERMANY |
Gold | | Heraeus Ltd. Hong Kong | | HONG KONG |
Gold | | Metalor Technologies (Hong Kong) Ltd | | HONG KONG |
Gold | | Chimet S.p.A. | | ITALY |
Gold | | Asahi Pretec Corporation | | JAPAN |
Gold | | Dowa | | JAPAN |
Gold | | Ishifuku Metal Industry Co., Ltd. | | JAPAN |
Gold | | JX Nippon Mining & Metals Co., Ltd. | | JAPAN |
Gold | | Kojima Chemicals Co., Ltd | | JAPAN |
Gold | | Matsuda Sangyo Co., Ltd. | | JAPAN |
Gold | | Mitsubishi Materials Corporation | | JAPAN |
Gold | | Mitsui Mining and Smelting Co., Ltd. | | JAPAN |
Gold | | Nihon Material Co. LTD | | JAPAN |
Gold | | Sumitomo Metal Mining Co., Ltd. | | JAPAN |
Gold | | Tanaka Kikinzoku Kogyo K.K. | | JAPAN |
Gold | | Tokuriki Honten Co., Ltd | | JAPAN |
Gold | | LS-NIKKO Copper Inc. | | KOREA, REPUBLIC OF |
Gold | | Metalor Technologies (Singapore) Pte. Ltd. | | SINGAPORE |
Gold | | Rand Refinery (Pty) Ltd | | SOUTH AFRICA |
Gold | | SEMPSA Joyería Platería SA | | SPAIN |
Gold | | Argor-Heraeus SA | | SWITZERLAND |
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| | | | |
Gold | | Metalor Technologies SA | | SWITZERLAND |
Gold | | PAMP SA | | SWITZERLAND |
Gold | | Valcambi SA | | SWITZERLAND |
Gold | | Solar Applied Materials Technology Corp. | | TAIWAN |
Gold | | Istanbul Gold Refinery | | TURKEY |
Gold | | Johnson Matthey Inc | | UNITED STATES |
Gold | | Kennecott Utah Copper LLC | | UNITED STATES |
Gold | | Materion | | UNITED STATES |
Gold | | Metalor USA Refining Corporation | | UNITED STATES |
Gold | | Ohio Precious Metals, LLC | | UNITED STATES |
Gold | | United Precious Metal Refining, Inc. | | UNITED STATES |
Tantalum | | Plansee | | AUSTRIA |
Tantalum | | Conghua Tantalum and Niobium Smeltry | | CHINA |
Tantalum | | Duoluoshan | | CHINA |
Tantalum | | F&X Electro-Materials Ltd. | | CHINA |
Tantalum | | Jiujiang Tanbre Co., Ltd. | | CHINA |
Tantalum | | Ningxia Orient Tantalum Industry Co., Ltd. | | CHINA |
Tantalum | | RFH Tantalum Smeltry Co., Ltd | | CHINA |
Tantalum | | Zhuzhou Cement Carbide | | CHINA |
Tantalum | | H.C. Starck Group | | GERMANY |
Tantalum | | Metallurgical Products India (Pvt.) Ltd. | | INDIA |
Tantalum | | Mitsui Mining & Smelting | | JAPAN |
Tantalum | | Taki Chemicals | | JAPAN |
Tantalum | | Ulba | | KAZAKHSTAN |
Tantalum | | Solikamsk Metal Works | | RUSSIAN FEDERATION |
Tantalum | | Tantalite Resources | | SOUTH AFRICA |
Tantalum | | Exotech Inc. | | UNITED STATES |
Tantalum | | Global Advanced Metals | | UNITED STATES |
Tantalum | | Hi-Temp | | UNITED STATES |
Tantalum | | Kemet Blue Powder | | UNITED STATES |
Tantalum | | QuantumClean | | UNITED STATES |
Tantalum | | Telex | | UNITED STATES |
Tin | | OMSA | | BOLIVIA |
Tin | | Mineração Taboca S.A. | | BRAZIL |
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| | | | |
Tin | | White Solder Metalurgia e Mineração Ltda. | | BRAZIL |
Tin | | Gejiu Non-Ferrous Metal Processing Co. Ltd. | | CHINA |
Tin | | Yunnan Tin Company, Ltd. | | CHINA |
Tin | | PT Bukit Timah | | INDONESIA |
Tin | | PT Timah | | INDONESIA |
Tin | | Mitsubishi Materials Corporation | | JAPAN |
Tin | | Malaysia Smelting Corporation (MSC) | | MALAYSIA |
Tin | | Minsur | | PERU |
Tin | | Thaisarco | | THAILAND |
Tin | | Alpha | | UNITED STATES |
2. | List of the SORs which were known by CFSI and were identified through Canon’s supply chain (CFS compliant SORs listed above were not included) |
| | | | |
Metal | | SOR | | Country/Region |
Gold | | Umicore Brasil Ltda | | BRAZIL |
Gold | | Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited | | CHINA |
Gold | | Jiangxi Copper Company Limited | | CHINA |
Gold | | Shandong Zhaojin Gold & Silver Refinery Co. Ltd | | CHINA |
Gold | | The Great Wall Gold and Silver Refinery of China | | CHINA |
Gold | | The Refinery of Shandong Gold Mining Co. Ltd | | CHINA |
Gold | | Zhongyuan Gold Smelter of Zhongjin Gold Corporation | | CHINA |
Gold | | Zijin Mining Group Co. Ltd | | CHINA |
Gold | | Aurubis AG | | GERMANY |
Gold | | Heimerle + Meule GmbH | | GERMANY |
Gold | | PT Aneka Tambang (Persero) Tbk | | INDONESIA |
Gold | | Aida Chemical Industries Co. Ltd. | | JAPAN |
Gold | | Asaka Riken Co Ltd | | JAPAN |
Gold | | Chugai Mining | | JAPAN |
Gold | | Japan Mint | | JAPAN |
Gold | | Yokohama Metal Co Ltd | | JAPAN |
Gold | | Kazzinc Ltd | | KAZAKHSTAN |
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| | | | |
Gold | | Daejin Indus Co. Ltd | | KOREA, REPUBLIC OF |
Gold | | DaeryongENC | | KOREA, REPUBLIC OF |
Gold | | Do Sung Corporation | | KOREA, REPUBLIC OF |
Gold | | Hwasung CJ Co. Ltd | | KOREA, REPUBLIC OF |
Gold | | Korea Metal Co. Ltd | | KOREA, REPUBLIC OF |
Gold | | SAMWON METALS Corp. | | KOREA, REPUBLIC OF |
Gold | | Torecom | | KOREA, REPUBLIC OF |
Gold | | Kyrgyzaltyn JSC | | KYRGYZSTAN |
Gold | | Caridad | | MEXICO |
Gold | | Met-Mex Peñoles, S.A. | | MEXICO |
Gold | | Schone Edelmetaal | | NETHERLANDS |
Gold | | Bangko Sentral ng Pilipinas (Central Bank of the Philippines) | | PHILIPPINES |
Gold | | FSE Novosibirsk Refinery | | RUSSIAN FEDERATION |
Gold | | JSC Ekaterinburg Non-Ferrous Metal Processing Plant | | RUSSIAN FEDERATION |
Gold | | JSC Uralectromed | | RUSSIAN FEDERATION |
Gold | | Moscow Special Alloys Processing Plant | | RUSSIAN FEDERATION |
Gold | | OJSC “The Gulidov Krasnoyarsk Non-Ferrous Metals Plant” (OJSC Krastvetmet) | | RUSSIAN FEDERATION |
Gold | | OJSC Kolyma Refinery | | RUSSIAN FEDERATION |
Gold | | Prioksky Plant of Non-Ferrous Metals | | RUSSIAN FEDERATION |
Gold | | SOE Shyolkovsky Factory of Secondary Precious Metals | | RUSSIAN FEDERATION |
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| | | | |
Gold | | L’ azurde Company For Jewelry | | SAUDI ARABIA |
Gold | | Boliden AB | | SWEDEN |
Gold | | Cendres & Métaux SA | | SWITZERLAND |
Gold | | PX Précinox SA | | SWITZERLAND |
Gold | | Atasay Kuyumculuk Sanayi Ve Ticaret A.S. | | TURKEY |
Gold | | Nadir Metal Rafineri San. Ve Tic. A.Ş. | | TURKEY |
Gold | | Sabin Metal Corp. | | UNITED STATES |
Gold | | Almalyk Mining and Metallurgical Complex (AMMC) | | UZBEKISTAN |
Gold | | Navoi Mining and Metallurgical Combinat | | UZBEKISTAN |
Tantalum | | JiuJiang JinXin Nonferrous Metals Co., Ltd. | | CHINA |
Tantalum | | King-Tan Tantalum Industry Ltd | | CHINA |
Tantalum | | Shanghai Jiangxi Metals Co. Ltd | | CHINA |
Tin | | Metallo Chimique | | BELGIUM |
Tin | | EM Vinto | | BOLIVIA |
Tin | | Cooper Santa | | BRAZIL |
Tin | | Estanho de Rondônia S.A. | | BRAZIL |
Tin | | Soft Metais, Ltda. | | BRAZIL |
Tin | | CNMC (Guangxi) PGMA Co. Ltd. | | CHINA |
Tin | | Gejiu Zi-Li | | CHINA |
Tin | | Huichang Jinshunda Tin Co. Ltd | | CHINA |
Tin | | Jiangxi Nanshan | | CHINA |
Tin | | Kai Unita Trade Limited Liability Company | | CHINA |
Tin | | Linwu Xianggui Smelter Co | | CHINA |
Tin | | Liuzhou China Tin | | CHINA |
Tin | | Minmetals Ganzhou Tin Co. Ltd. | | CHINA |
Tin | | Yunnan Chengfeng Non-ferrous Metals Co., Ltd. | | CHINA |
Tin | | CV Serumpun Sebalai | | INDONESIA |
Tin | | CV United Smelting | | INDONESIA |
Tin | | PT Artha Cipta Langgeng | | INDONESIA |
Tin | | PT Babel Inti Perkasa | | INDONESIA |
Tin | | PT Bangka Putra Karya | | INDONESIA |
Tin | | PT Bangka Tin Industry | | INDONESIA |
Tin | | PT Belitung Industri Sejahtera | | INDONESIA |
Tin | | PT DS Jaya Abadi | | INDONESIA |
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| | | | |
Tin | | PT Eunindo Usaha Mandiri | | INDONESIA |
Tin | | PT Karimun Mining | | INDONESIA |
Tin | | PT Mitra Stania Prima | | INDONESIA |
Tin | | PT Prima Timah Utama | | INDONESIA |
Tin | | PT REFINED BANGKA TIN | | INDONESIA |
Tin | | PT Sariwiguna Binasentosa | | INDONESIA |
Tin | | PT Stanindo Inti Perkasa | | INDONESIA |
Tin | | PT Tambang Timah | | INDONESIA |
Tin | | PT Tinindo Inter Nusa | | INDONESIA |
Tin | | Fenix Metals | | POLAND |
Tin | | Novosibirsk Integrated Tin Works | | RUSSIAN FEDERATION |
Tungsten | | Wolfram Bergbau und Hütten AG | | AUSTRIA |
Tungsten | | Chongyi Zhangyuan Tungsten Co Ltd | | CHINA |
Tungsten | | Dayu Weiliang Tungsten Co., Ltd. | | CHINA |
Tungsten | | Fujian Jinxin Tungsten Co., Ltd. | | CHINA |
Tungsten | | Ganzhou Huaxing Tungsten Products Co., Ltd. | | CHINA |
Tungsten | | Ganzhou Non-ferrous Metals Smelting Co., Ltd. | | CHINA |
Tungsten | | Guangdong Xianglu Tungsten Industry Co., Ltd. | | CHINA |
Tungsten | | Hunan Chenzhou Mining Group Co | | CHINA |
Tungsten | | Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd. | | CHINA |
Tungsten | | Xiamen Tungsten Co., Ltd | | CHINA |
Tungsten | | Zhuzhou Cemented Carbide Group Co Ltd | | CHINA |
Tungsten | | HC Starck GmbH | | GERMANY |
Tungsten | | A.L.M.T. Corp. | | JAPAN |
Tungsten | | Japan New Metals Co Ltd | | JAPAN |
Tungsten | | Wolfram Company CJSC | | RUSSIAN FEDERATION |
Tungsten | | Global Tungsten & Powders Corp. | | UNITED STATES |
Tungsten | | Kennametal Huntsville | | UNITED STATES |
Tungsten | | Tejing (Vietnam) Tungsten Co., Ltd. | | VIET NAM |
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