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    Audit Summary Report 2016

    2020/11/12      view:

    Audit Summary Report 2016

     

    Auditee Name

    Jiangxi Tuohong New Raw Material Co., Ltd.

    Smelter ID

    (CID002842)

    Auditee Contact Person

    Huang ShuigengManager 

    Audit Date(s)

    12/22-23/2016

    Audit Type

    Annual 

    Audited Material

    Tantalum

     

    Audit Company

    SGS

    Lead Auditor Name

    David Fang

    Date report sent to Auditee

    12/31/2016

    Date report sent to CFSP

    MM/DD/YYYY

    Report Revision #

    CRS2016-12-22~23


     

    AUDIT CONCLUSION:

     

    The auditor found that the auditee’s operations are in conformance with the requirements of the Conflict Free Smelter Program Supply Chain Transparency Smelter Audit Protocol for Tin and Tantalum, Revision of 21 November 2013.

    The auditor identified non-conformance(s) between the auditee’s operations and the requirements of the Conflict Free Smelter Program Supply Chain Transparency Smelter Audit Protocol for Tin and Tantalum, Revision of 21 November 2013. 

    Non-conformance(s) relate to:

     

    Conflict Minerals Policy Compliance Requirements

     

    Mass Balance Compliance Requirements

     

    Material Type and Origin Verification

    The Auditee has agreed to address the non-conformance(s), to define a Corrective Action Plan (if necessary) and undergo a verification of the implementation of corrective actions.

    The auditee has not agreed to address the non-conformance(s), to define a Corrective Action Plan (if necessary) and to undergo a verification of the implementation of corrective actions.

     

    Please refer to the summary on the next page for details.

     


    SUMMARY OF NON-CONFORMANCES

    Number:

     Non-Conformance related to*:

    Description of non-conformance:

    Recommended Corrective Action:

    Auditee response (if any):

    1

    Nil

     

     

     

    2

    Nil

     

     

     

    3

    Nil

     

     

     

    4

    Nil

     

     

     

    5

    Nil

     

     

     

    6

    Nil

     

     

     

    7

    Nil

     

     

     

    8

    Nil

     

     

     

    9

    Nil

     

     

     

    10

    Nil

     

     

     

    * Policy, Mass Balance, Material Origin, Other

     

    SUMMARY OF OBSERVATIONS (if any)

    Number:

    Description of the observation:

    Recommended improvement:

    Auditee response (if any):

    1

    Nil

     

     

    2

    Nil

     

     

    3

    Nil

     

     

    4

    Nil

     

     

    5

    Nil

     

     


     

    Table of Contents

    I. Introduction 5

    II. Audit Objectives 5

    III. Audit Scope 5

    A. Audit Period 5

    B. Physical Sites and Description 5

    IV. Audit Team 5

    V. Audit Methodology 6

    VI. Summary of Audit Observations 6

    A. Conflict Minerals Policy (Section IV) 6

    B. Mass Balance Calculation (Section V) 6

    C. Origin Determination (Section VI) 6

    1. Origin Determination Level 1 7

    2. Origin Determination Level 2 7

    3. Origin Determination Level 3 7

    4. Verification of legacy and secondary material 8

    5. Verification of material received from a supplying smelter 8

    VII. Opening and Closing Meeting 8

    VIII. Limitations and General Feedback 9

     

     

     


    I. Introduction

     

    Jiangxi Tuohong New Raw Material Co., Ltd. is a Tantalum smelter. The major tantalum products are Tantalum oxide and K2TaF7 etc

    Main operations are as below:

    1. Tantalum ore – crushing - solution – extracting- precipitation by Ammonia- washing-dry- calcinations- Tantalum oxide

    2. Tantalum ore – crushing - solution – extracting-K2TaF7

    II. Audit Objectives

     

    The objective of the audit is to assess the auditee’s level of compliance with the requirements of the Conflict Free Smelter Program Supply Chain Transparency Smelter Audit Protocol for Tin and Tantalum, Revision of 21 November 2013.

     

    III. Audit Scope

     

    The audit is carried out against the Conflict Free Smelter Program Supply Chain Transparency Smelter Audit Protocol for Tin and Tantalum, Revision of 21 November 2013.

     

    It covers the following entity and material:

    Entity auditedJiangxi Tuohong New Raw Material Co., Ltd.

    Material audited: Tantalum

     

    A. Audit Period

     

    12/24/2015 - 11/20/2016

    B. Physical Sites and Description

     

    Exact company nameJiangxi Tuohong New Raw Material Co., Ltd.

    Physical address: NO.3, Chunyi Road, Economic Development Zone, Yichun City, Jiangxi Province, China

    Types of materials received:

    Types of Ta feed materials: TANTALITECOLUMBITEWaste K2TaF7 solution

     

    Types of Ta products produced:

    Tantalum oxide and K2TaF7 etc

    Manufacturing Process:

    1. Tantalum ore – crushing - solution – extracting- precipitation by Ammonia- washing-dry- calcinations- Tantalum oxide

    2. Tantalum ore – crushing - solution – extracting-K2TaF7

    IV. Audit Team

     

    David Fang: Leader Auditor

    V. Audit Methodology

     

    Opening meeting and had Interviews with corporate management and site responsible persons - to understand the company background, site operation, conflict free purchasing policy and procedure, training, lot number control, business with suppliers, industrial definition about incoming materials and finished goods, and also implementation of the due diligence process. 

     

    Site walk through – to observe the process flow from raw material warehouse, manufacturing plants to product warehouse, at the same time sample selection for inventory spot checks in raw materials warehouse, finished goods warehouse.

     

    Document review - company policy related to procurement of Tin containing material, material balance including inventory spot check and transaction documentmaterial receipts documentation and test report for non-secondary materials, materials received and issue records.

     

    Closing meeting held to review the audit findings.

     

    VI. Summary of Audit Observations

    A. Conflict Minerals Policy

    · Jiangxi Tuohong New Raw Material Co., Ltd. Conflict-free Minerals Procurement Statement is established oMay 1, 2014, and publicly available at: 

    · This statement includes policy of only purchasing raw materials that are conflict-free and that meet the requirements of the OECD Due Diligence Guidance for Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, and require suppliers to strictly abide by their own country or United Nations about class transportation regulations of dangerous goods.

    · The factory established Purchase management procedure TH/QP-10 issued on May 1, 2015 and Material and product transportation procedure TH/QI-61 issued on May 1, 2015and tantalum sourcing requirements of the policy are incorporated in the mentioned procedures.

    · There were only two suppliers used by the auditee, and they signed "The letter of commitment" and send them to the auditee.

    · CFSP training was conducted annually for employees and management.

    1. Training about EICC management system for employees was conducted on Sep 5, 2016 by Huang Shuigeng/ Manager, and employees such as Liu Yulan/ Warehouse staff Peng Xiaojing/ Tester etc attended the training.

    2. Training about EICC management system for management was conducted on Apr 11, 2016 by Huang Shuigeng/ Manager, and management such as He Jianbin/ purchase manager, Lei Yun/ sale manager etc attended the training.

    C. Mass Balance Calculation

     

    · Quantity variance is 2.06% which is acceptable.

    · The system used for the calculation by manual system.

    · Auditor has reviewed the sales records with summary, shipping records, sale contract, sale invoice etc, and all 8 batches of Shipment in May 2016 were selected. All records matched the Mass Balance. And the total weight of K2TaF7 content was 4000Kg.

    · During the walkthrough samples selected were spot checked in the recording system, which indicated that the traceability information including the materials type, weigh and status, were recorded and tracked. For example, 161001-A/B/C 18206 Kg which met the material records.

     

    D. Origin Determination 

    Raw material is purchased by procurement department, origin and transportation documentation is collected and reviewed. E.g.: purchase order, invoice, mining license, certificate of analysis, delivery record etc for ore from Level 1 countries (China), and purchase order, test records, delivery records and compliant smelter list from CFSI website etc for materials from other smelters.

     

    1. Origin Determination Level 1

     

    a. LSM Sources

    · There were total 10 level 1 purchases and auditor reviewed all 10 batches. The ore from   Level 1 country include: purchase order, invoice, mining license, certificate of analysis, delivery record etc. And all 10 batches of ores came from China.

     

    b. ASM Sources

     

    · No purchase from ASM sources in Level 1 country.

    2. Origin Determination Level 2

     

    a. LSM Sources

     

    · No such purchase from Level 2 country.

    b. ASM Sources

     

    · No such purchase from Level 2 country.

     

    3. Origin Determination Level 3

     

    · No such purchase from Level 3 country.

    4. Verification of legacy and secondary material

     

    · No legacy material purchased.

    · No secondary material purchased.

     

    5. Verification of material received from a supplying smelter

     

    · There were 38 batches of material (total 304189.04 Kg) received from a supplying smelter, and selected 5 batches of them for review. The material provided by other smelter was TANTALITECOLUMBITE and Waste K2TaF7 solution which was a semi-product in Tantalum smelting process, and relevant records include: purchase order, test records, delivery records and compliant smelter list from CFSI website etc which met the requirement of Audit Protocol, all the materials came from a compliant smelter named Zhuzhou Cemented  Carbide Tantalum niobium division which located in China.

    VII. Opening and Closing Meeting

     

    List the opening and closing meeting attendees:

     

    Auditee:

    Huang ShuigengManager 

    Yuan Xinsheng-Vice general manager

    He Jianbin-Purchase manager 

    He Zhipeng-Workshop supervisor 

    Lei Yun- Sale staff 

     

    Auditor:

    David Fang  Lead Auditor, SGS China

     

    Observer:

    Mr.  Li–section chief of Yichun Branch, AQSIQ

    Mr.  Xiao–section chief of Jiangmen Branch, AQSIQ

     

    Opening meeting –Auditors introduced audit objective, methodology and agenda. Auditee made an introduction to the company and site operation. Both parties signed NDA and Integrity agreement. 

    Closing meeting – Lead auditor reports preliminary audit result.

    VIII. Limitations and General Feedback

     

    Nil

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