The U.S. Securities and Exchange Commission proposed several rules Wednesday that will ramp up the disclosure obligations on both resource companies and firms that use minerals from troubled countries.

The SEC voted unanimously to propose measures to require new disclosure by reporting issuers concerning “conflict minerals” that originate in the Democratic Republic of the Congo or an adjoining country. It also proposed rules to require resource extraction issuers to disclose payments made to the U.S. or foreign governments; and rules outlining the way in which mining companies must disclose certain information about mine safety and health standards.

The broadest measure would require companies to disclose annually whether they use “conflict minerals” that are “necessary to the functionality or production” of a product that they either manufacture or contract to be manufactured that originate from the Congo or adjoining countries. The conflict minerals are cassiterite, columbite-tantalite, gold, wolframite or their derivatives, which are essential to the production of a variety of products.

Additionally, resource companies would be required to disclose payments made to governments if the issuer: is required to file an annual report with the SEC, and engages in the commercial development of oil, natural gas, or minerals. The rules would apply to domestic and foreign issuers and to smaller reporting companies that meet the definition of resource extraction issuer.

The proposed rules on safety would require mining companies to include information about mine safety and health standards in their annual and quarterly reports filed with the SEC.

Comments on all of the proposed rules is due by Jan. 31, 2011.

IE