MAGNA INTERNATIONAL INC.
CONFLICT MINERALS REPORT
(For the reporting period from January 1, 2017 to December 31, 2017)
SECTION 1: INTRODUCTION
(a) The Conflict Minerals Rule
This Conflict Minerals Report (the "Report") of Magna International Inc. (referred to as "Magna", "we", "us" or "our" in this Report) has been prepared in accordance with Securities and Exchange Commissions ("SEC") Rule 13p-1 (17 CFR 240.13p-1) (the "Rule") adopted under the Securities and Exchange Act of 1934.The Rule requires SEC registrant companies to disclose the use of "Conflict Minerals" in their products, where such use is "necessary to the functionality or production of a product" manufactured by that company. The Rule defines "Conflict Minerals" as cassiterite, columbite-tantalite, wolframite, gold, and their derivatives, tin, tantalum, tungsten as well as gold (collectively, "3TG minerals" or "3TG") that originated in the Democratic Republic of the Congo or an adjoining country specified in the Rule (collectively, the "Covered Countries").
As a registrant with 3TG minerals present in certain of our manufactured products, Magna is required to comply with the Rule, including performing a "reasonable country of origin inquiry" ("RCOI") into the sources of the 3TG minerals to determine whether any such minerals in our products originated in a Covered Country. The results of our RCOI are detailed in Section 2 of this Report.
(b) Forward-Looking Statements
This Report contains forward-looking statements relating to actions that we may take in the future with respect to our conflict minerals compliance program (the "Program"). Such statements are based on the current expectations of our management and are not promises or guarantees of future performance of such actions. The forward-looking statements represent managements expectations as of the date of this Report. Subsequent events and developments may cause managements views to change.
(c) Documents Incorporated by Reference
Unless expressly incorporated by reference in this Report, any documents, third-party materials or references to websites (including Magnas website) are not incorporated by reference in, or considered a part of, this Report.
B. Company Overview
(a) Our Company
We are a mobility technology company and one of the worlds largest suppliers to the automotive industry with 340 manufacturing operations and 93 product development, engineering and sales centres in 28 countries. We have more than 172,000 entrepreneurial-minded employees dedicated to delivering mobility solutions. These figures include manufacturing operations, product development, engineering and sales centres and employees in certain equity-accounted operations.
(b) Our Products
Our products are designed to meet the requirements and specifications of our automotive customers. Certain of these requirements and specifications entail the use of 3TG minerals. In addition to complete vehicle engineering and contract manufacturing expertise, our product capabilities include producing body, chassis, exterior, roof, powertrain, electronics, mirrors and lighting, mechatronics, and seating systems. A more detailed description of our products can be found on pages 20-25 of our Annual Information Form, which is available on Magnas corporate website at: http://www.magna.com/investors/financial-reports-public-filings?rpt=annualinfo
(c) Reliance on Supply Chain & Industry-Driven Initiatives
Due to the number and complexity of the products we manufacture, our supply chain consists of a substantial number of suppliers globally, the composition of which changes within each calendar year and from year to year. Moreover, we are generally many tiers removed from the smelters or refiners ("SORs") of 3TG minerals in our supply chain. We do not, to the best of our knowledge, directly purchase 3TG minerals from any of the Covered Countries. As a downstream consumer of 3TG minerals, Magna must rely on its direct suppliers to gather and report to us information about SORs in the supply chain. Our direct suppliers are similarly reliant upon information provided to them by their own suppliers.
The structure, size and breadth of our supply chain, as well as the fact that a substantial portion of the suppliers in our supply chain are not obligated to file reports with the SEC (including reports under the Rule), makes gathering of complete and accurate conflict minerals information a lengthy and challenging process. In most cases, we do not have meaningful leverage over upstream suppliers or other actors in the supply chain. As a result of these challenges, in addition to our ongoing engagement with our direct production suppliers as part of our Program, we participate in several industry-driven initiatives aimed at increasing awareness of, and participation in, conflict minerals reporting by suppliers.