Sevcon, Inc.
Conflict Minerals Report
For the reporting period from January 1, 2013 to December 31, 2013
Due Diligence
This Conflict Minerals Report of Sevcon, Inc. has been prepared pursuant to SEC Rule 13p-1 and Form SD (the “Rule”) for the reporting period January 1, 2013 to December 31, 2013.
The Rule requires disclosure of certain information when a company manufactures or contracts to manufacture products for which the minerals specified in the Rule are necessary to the functionality or production of those products. The specified minerals, which we collectively refer to in this Report as the “conflict minerals,” are gold, columbite-tantalite (coltan), cassiterite and wolframite, including their derivatives, which are limited to tantalum, tin and tungsten. The “Covered Countries” for the purposes of the Rule and this Report are the Democratic Republic of the Congo, the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola. As described in this Report, the Company manufactures, or contracts to manufacture, products for which conflict minerals are necessary to the functionality or production.
As a producer of electronic equipment, Sevcon uses a supply base consisting mostly of electronic component manufacturers, distributors and assemblers. Therefore, the facilities used to process the necessary conflict minerals in those products, and the country of origin of the necessary conflict minerals in those products are several steps down the global electronics supply chain.
Sevcon engaged in a reasonable country of origin inquiry (RCOI) described in Form SD to which this report is an exhibit. Sevcon was unable to determine that none of the conflict minerals contained in its products originated in the Covered Countries. Consequently, Sevcon has exercised due diligence on the source and chain of custody of the conflict minerals necessary to the functionality or production of its products. The due diligence methodology applied by Sevcon is based in all material aspects on the OECD “Five-Step Framework for Risk-Based Due Diligence in the Mineral Supply Chain,” including the relevant mineral specific supplements.
Sevcon has:
| 1. | Established strong company management systems, by having: |
| a. | Established a policy to work towards eliminating conflict minerals from its supply chain, and has informed all suppliers of the objectives and reporting requirements. |
| b. | Allocated internal management resource and responsibility for supplier chain due diligence |
| c. | Established a system of controls and transparency over the mineral supply chain. The details of this are described below. |
| d. | Strengthened company engagement with suppliers. Where new supplier contracts are drafted, conflict minerals objectives and reporting requirements are being included. |
| e. | Made available the company Environmental Corrective and Preventive Action Procedure available for investigation of any risks relating to Conflict Minerals, with input to the EICC® GeSI program where appropriate. |
| 2. | Identified risk in the supply chain, and assessed the adverse impact of those risks. |
| 3. | Designed and implemented a strategy to respond to identified risks. |
| 4. | Utilized the EICC GeSI reporting program to analyse the responses of its manufacturers and suppliers. |
| 5. | Reported the results of our supply chain due diligence publicly in Form SD as well as internally to senior management. |
We have 13 direct manufacturers/suppliers for our products and their components. Of these manufacturers/ suppliers, all were within the scope of our RCOI. We conducted a survey of these manufacturers/suppliers using the template developed jointly by the companies of Electronic Industry Citizenship Coalition (EICC) and The Global e-Sustainability Initiative (GeSI), known as the CFSI Reporting Template (the “Template”). The Template was developed to facilitate disclosure and communication of information regarding smelters that provide material to a company’s supply chain. It includes questions regarding a company’s conflict-free policy, engagement with its direct suppliers, and a listing of the smelters the company and its suppliers use. In addition, the template contains questions about the origin of conflict minerals included in their products, as well as supplier due diligence.
Of the manufacturers/suppliers within the scope of our RCOI, 34% confirmed as not supplying parts containing conflict minerals or using conflict minerals in their production process. This equated to 13% of unique parts used by Sevcon. Of the remaining manufacturers/suppliers, 40% submitted responses in the appropriate EICC GeSI format. Of the responding suppliers, none were able to confirm that all of their supplying conflict minerals smelters were listed as compliant on the CFSI lists.
Products
The products manufactured or contracted to be manufactured by Sevcon in calendar year 2013 were –
| 1. | Motor controllers for electric and hybrid vehicles |
| 2. | On-board battery chargers for electric and hybrid vehicles |
| 3. | DC/DC convertors for electric and hybrid vehicles |
| 4. | Other drivetrain system components for electric and hybrid vehicles |
Our efforts to determine the mine or location of origin of the necessary conflict minerals in our products with the greatest possible specificity consisted of the due diligence measures described in this conflict minerals report. In particular, because independent third party audit programs validate whether sufficient evidence exists regarding country, mine and/or location of origin of the conflict minerals that the audited smelter or refiner facilities have processed, we relied on the information made available by such programs for the smelters and refiners in our supply chain. We were unable to ascertain the country of origin and/or chain of custody of all necessary conflict minerals processed by the facilities that contributed to our products because, for this reporting period, certain smelter and refiner facilities (1) had not yet received a “conflict free” designation from an independent third party audit program and (2) did not respond to our requests for country of origin or chain of custody information.
With respect to the products on which Sevcon exercised due diligence, the following table lists the facilities which, to the extent known, processed the necessary conflict minerals in our products:
Conflict Mineral | Smelter or Refiner Facility Name |
Gold | Shanghai Gold Exchange Aida Chemical Industries Co.,Ltd. Allgemeine Gold- und Silberscheideanstalt A.G.* Almalyk Mining and Metallurgical Complex (AMMC) AngloGold Ashanti Mineração Ltda* Argor-Heraeus SA* Asahi Pretec Corporation* Asaka Riken Co.,Ltd. Atasay Kuyumculuk Sanayi Ve Ticaret A.S. Aurubis AG Bangko Sentral ng Pilipinas (Central Bank of the Philippines) Boliden AB Caridad Cendres & Métaux SA Central Bank of the DPR of Korea Chimet SpA* Chugai Mining Co.,Ltd Codelco Daejin Indus Co. Ltd DaeryongENC Do Sung Corporation Dowa Metals & Mining Co. Ltd* Echememi Enterprise Corp.(Futures Exchange) Eco-System Recycling Co., Ltd.* FSE Novosibirsk Refinery Harima Smelter Heesung Catalysts Corp. Heimerle + Meule GmbH* |
| Heraeus Ltd Hong Kong* Heraeus Precious Metals GmbH & Co. KG* Heraeus Zhaoyuan Precious Metal Materials Co.,Ltd. Hisikari Mine Hwasung CJ Co. Ltd Inner Mongolia Qiankun Gold and Silver Refinery Share Company Limited Ishifuku Metal Industry Co., Ltd.* Istanbul Gold Refinery* Japan Mint Jiangxi Copper Company Limited Jinlong Copper Co., Ltd. Johnson Matthey Hong Kong Ltd. Johnson Matthey Inc* Johnson Matthey Limited* JSC Ekaterinburg Non-Ferrous Metal Processing Plant JSC Uralectromed JX Nippon Mining & Metals Co., Ltd* Kazzinc Ltd Kennecott Utah Copper LLC* Kojima Chemical Co., Ltd.* Korea Metal Co. Ltd Kyocera Kyrgyzaltyn JSC L' azurde Company For Jewelry La Caridad Mine LG-Nikko London Bullion Market Association LS-Nikko Copper Inc* Materion Advanced Metals* Matsuda Sangyo Co. Ltd* Metalor Technologies (Hong Kong) Ltd* Metalor Technologies SA* Metalor USA Refining Corporation* Met-Mex Peñoles, S.A. Mitsubishi Materials Corporation* Mitsui & Co. Precious Metals Inc. Hong Kong Mitsui Mining and Smelting Co., Ltd.* Morigin Company Moscow Special Alloys Processing Plant Nadir Metal Rafineri San. Ve Tic. A.Ş. Navoi Mining and Metallurgical Combinat Nihon Material Co. Ltd* Niihama Nickel Refinery Ningbo Kangqiang Nippon Mining & Mtetals Ohio Precious Metals LLC* OJSC Kolyma Refinery OJSC Krastvetmet Orelec PAMP SA* Pan Pacific Copper Co Ltd., Prioksky Plant of Non-Ferrous Metals PT Aneka Tambang (Persero) Tbk PX Précinox SA Rand Refinery (Pty) Ltd* Refinery Of Shandong Gold Mining Co.,Ltd Royal Canadian Mint* Sabin Metal Corp. Samduck Precious Metals |
| Samwon Metals Corp. Schone Edelmetaal SEMPSA Joyeria Plateria SA* Senju Metal Industry Co.,Ltd. Shandong Zhaojin Gold & Silver Refinery Co. Ltd So Accurate Refining Group SOE Shyolkovsky Factory of Secondary Precious Metals Solar Applied Materials Technology Corp.* Sumitomo Metal Mining Co. Ltd.* Suzhou Xingrui Noble Tanaka Kikinzoku Kogyo K.K.* The Great Wall Gold and Silver Refinery of China The Refinery of Shandong Gold Mining Co. Ltd Tokuriki Honten Co., Ltd* Tokuriki Tokyo Melters Assayers Torecom UBS AG Umicore Brasil Ltda Umicore SA* United Precious Metal Refining, Inc.* Uyemura Valcambi SA* Western Australia Mint* Xstrata Canada Corporation Yamamoto Precious Metal Co., Ltd. Yokohama Metal Co Ltd Zhaojin Group & Gold Mineral China Co., Ltd. Zhongjin Gold Corporation Limited Zhongyuan Gold Smelter of Zhongjin Gold Corporation Zijin Mining Group Co. Ltd |
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Tantalum | CIF Conghua Tantalum and Niobium Smeltry* Duoluoshan* Ethiopian Minerals Development Share Company Exotech Inc.* F&X Electro-Materials Limited* Fujian Nanping Gannon & Scott Global Advanced Metals* H.C. Starck GmbH* Hi-Temp* Jiangxi Yichun JiuJiang JinXin Nonferrous Metals Co. Ltd.* JiuJiang Tambre Co. Ltd.* Kemet Blue Powder* Metal Do Mitsui Mining & Smelting* Ningxia Orient Tantalum Industry Co., Ltd.* Niotan Nippon Mining & Metals Co.,Ltd. NTET, Thailand Plansee* RFH Shanghai Jiangxi Metals Co., Ltd Solikamsk Metal Works* Taki Chemicals* Tantalite Resources* Telex* Ulba* |
| Ulba Metallurgical Plant, JSC Zhuzhou Cement Carbide* |
Tungsten | Alldyne Powder Technologies Allied Material (A.L.M.T) Corp Alta Group Asahi Pretec Corp ATI Firth Sterling ATI Tungsten Materials Buffalo Tungsten Chaozhou Xianglu Tungsten Industry Co Ltd China Minmetals Nonferrous Metals Co Ltd China National Non-ferrous Chongyi Zhangyuan Tungsten Co Ltd Dayu Weiliang Tungsten Co., Ltd. Fujian Jinxin Tungsten Co., Ltd. Gan Bei Tungsten Industry co. Ltd. Ganzhou Grand Sea W & Mo Group Co Ltd Ganzhou Hongfei Tungsten & Molybdenum Materials Co., Ltd. Ganzhou Huaxing Tungsten Products Co. Ltd. Ganzhou Nonferrous Metals smelting Co Ltd. Ganzhou Sinda W&Mo Co., Ltd. Global Tungsten & Powders Corp* HC Starck GmbH Hitachi Ltd. Hunan Chenzhou Mining Group Co Hunan Chun-Chang Nonferrous Smelting & Concentrating Co., Ltd. Jada Electronic limited (JX Nippon Mining & Matel Co., Ltd) Japan New Metals Co Ltd Jiangxi Rare Earth & Rare Metals Tungsten Group Corp Jiangxi Tungsten Co Ltd Jiangxi Tungsten Industry Group Co Ltd Kanto Denka Kogyo Co., Ltd. Kennametal Inc. Kyoritsu Gokin Co., Ltd. Mitsubishi Materials Corp. Mitsui Mining & Smelting Co., Ltd Nanchang Cemented Carbide Limited Liability Company NingHua XingLuoKeng TungSten Mining Co.,Ltd North American Tungsten Plansee Sandvik Material Technology Sumitomo Metal Mining Co., Ltd. TaeguTec Tejing (Vietnam) Tungsten Co Ltd Ulvac Wolfram Bergbau und Hütten AG Wolfram Company CJSC Xiamen Tungsten (H.C.)Co., Ltd. Xiamen Carbide Ltd. Xiamen Golden Egret Special Alloy (HC) Co. Ltd Xiamen Honglu Tungsten Molybdenum Industry Co., Ltd. Zhuzhou Cemented Carbide Group Co Ltd |
Tin | ABC Corporation Alpha Metals Korea Ltd. Amalgamet American Iron and Metal An Xin Xuan Xin Yue You Se Jin Shu Co. Ltd. Aoki Loboratories Ltd. |
| Bangka Baoshida Swissmetall CFC Cooperativa dos Fundidores de Cassiterita da Amazônia Ltda. Chengfeng Metals Co Pte Ltd China Tin Smelter Co. Ltd. China Tin Smelter Co.Ltd CNMC (Guangxi) PGMA Co. Ltd. Cookson Alpha Metals (Shenzhen )Co.Ltd Cooper Santa Corporation Berhad (MSC) CV DS Jaya Abadi CV Duta Putra Bangka CV Gita Pesona CV JusTindo CV Makmur Jaya CV Nurjanah CV Prima Timah Utama CV Serumpun Sebalai CV United Smelting Electro.oy Metal Pte. EM Vinto Feinhütte Halsbrücke GmbH Fenix Metals Sp. Z o.o. FSE Novosibirsk Refinery Fuji Metal Mining Funsar Furukawa Electric Gebrueder Kemper GMBH Geiju Non-Ferrous Metal Processing Co. Ltd. Gejiu Gold Smelter Minerals Co.,Ltd Gejiu Non-FerrousMetal Processing Co.Ltd.* Gejiu Yunxin Colored Electrolytic Co.,Ltd Gejiu Zi-Li Gold Bell Group Gomat-e-K. Grillo Handel Guangxi China Tin Group Co.,Ltd Heesung Metal Ltd. Heraeus Germany Heraeus Materials Singapore Pte, Ltd. Heraeus Oriental Hitec Co., Ltd. Heraeus Technology Center Hitachi Cable Huaxi Guangxi Group Huichang Jinshunda Tin Co. Ltd Huichang Shun Tin Kam Industries, Ltd. Imperial Zinc Indoneisan State Tin Corporation Mentok Smelter Jean Goldschmidt International Jiangxi Nanshan Kai Unita Trade Limited Liability Company Kaimeng(Gejiu) Industry and Trade Co., Ltd. Keeling & Walker Ketabang KOBA Kupol Laibin China Tin Smelting Co., Ltd. Linqu Xianggui Smelter Co. Ltd. Liuzhou China Tin Malayasia Smelting Corporation* |
| Metahub Industries Sdn. Bhd. Metallo Chimique Mineração Taboca S.A.* Minmetals Ganzhou Tin Co. Ltd. Minsur Mines* Mitsubishi Electric Metecs Co., Ltd. Mitsubishi Materials Corporation* Nankang Nanshan Tin Manufactory Co., Ltd. Novosibirsk Integrated Tin Works OM Manufacturing Phils. Inc. OMSA* PL Timah Tbk PT Alam Lestari Kencana PT Artha Cipta Langgeng PT Babel Inti Perkasa PT Babel Surya Alam Lestari PT Bangka Kudai Tin PT Bangka Putra Karya PT Bangka Timah Utama Sejahtera PT Bangka Tin Industry PT Belitung Industri Sejahtera PT BilliTin Makmur Lestari PT Bukit Timah* PT DS Jaya Abadi PT Eunindo Usaha Mandiri PT Fang Di MulTindo PT HP Metals Indonesia PT Indra Eramulti Logam Industri PT Karimun Mining PT Koba Tin PT Mitra Stania Prima PT Refined Banka Tin PT Sariwiguna Binasentosa PT Stanindo Inti Perkasa PT Sumber Jaya Indah PT Tambang Timah* PT Timah* PT Tinindo Inter Nusa PT Tommy Utama PT Yinchendo Mining Industry Pure Technology Richard Stenzhorn GmbH Rui Da Hung Salzgitter Samhwa non-ferrorus Metal ind.co.ltd Senju Metal Industry Co. (SMIC) Sinitron, Shenmao Solder (M) Sdn. Bhd. Smelting Branch of YunNan Tin Company Limited Sundwigger Messingwerk Tamura Thailand Smelting and Refining Co., Ltd* The Miller Company Traxys UNIFORCE METAL INDUSTRIAL CORP Unit Metalurgi PT Timah (Persero ) Tbk Unit Timah Kundur PT Tambang WC Heraeus Hanau White Solder Metalurgia* XiHai Yunnan Chengfeng Non-Ferrous Metals Co Ltd |
| Yunnan Tin Company Limited* Yuntinic Chemical GmbH YunXi Zhejiang Huangyan Xinqian Electrical Parts Factory |
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Countries of origin of the conflict minerals these facilities process are believed to include: American Samoa, Australia, Austria, Belgium, Bolivia, Brazil, Canada, Chile, China, Democratic People’s Republic of Korea, Ethiopia, France, Germany, Hong Kong, Indonesia, Italy, Japan, Kazakhstan, Republic of Korea, Kyrgyzstan, Malaysia, Mexico, Netherlands, Peru, Philippines, Poland, Russian Federation, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, USA, Uzbekistan, Vietnam |
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* Denotes smelters and refiners which have received a “conflict free” designation from an independent third party audit program as of May 20th, 2014.
Continuous Improvement Strategy
In order to improve from the above initial results and to mitigate the risk that our necessary conflict minerals will benefit armed groups, Sevcon is taking the following actions:
| a. | Working with the suppliers, sub-suppliers and manufacturers to engage with the smelter to enrol in the EICC GeSI Conflict Free Smelters program; |
| b. | Failing action a, Working with the supplier and sub-supplier to select an alternative conflict minerals supplier with supplying smelters participating in the EICC GeSI Conflict Free Smelters program; |
| c. | Failing action b, selecting an alternative supplier or sub-supplier who can offer conflict-free materials with supplying smelters participating in the EICC GeSI Conflict Free Smelters program. |
| d. | Monitoring progress towards conflict-free status, by reporting trends publicly and within Sevcon and its supplier base. |