EX-1.01
Published on May 22, 2025
Exhibit 1.01
AXALTA COATING SYSTEMS LTD.
CONFLICT MINERALS REPORT
REPORTING PERIOD ENDED DECEMBER 31, 2024
Introduction
This Conflict Minerals Report (this “Report”) for Axalta Coating Systems Ltd. is filed as an exhibit to Form SD pursuant to Rule 13p-1 (the “Rule”) under the Securities Exchange Act of 1934, as amended, for the reporting period from January 1 through December 31, 2024 (the “Reporting Period”). In this Report, unless the context otherwise indicates, “Axalta,” “we,” “us,” the “Company” and “our” mean Axalta Coating Systems Ltd.
The Rule was adopted by the Securities and Exchange Commission (the “SEC”) to implement certain reporting and disclosure requirements for SEC registrants that manufacture or contract to manufacture products containing conflict minerals that are necessary to the functionality or production of their products. Form SD defines “conflict minerals” as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are currently limited to tin, tantalum, and tungsten (collectively, the “Conflict Minerals”).
Axalta is a leading global manufacturer, marketer, and distributor of high-performance coating systems. We are required to make filings pursuant to the Rule because we determined that the Conflict Mineral tin and associated compounds were necessary to the functionality or production of certain products that we manufactured or contracted to manufacture during the Reporting Period.
Reasonable Country of Origin Inquiry and Determination
As noted above, we determined that the Conflict Mineral tin and associated compounds were necessary to the functionality or production of certain products that we manufactured or contracted to manufacture during the Reporting Period. Thus, for the Reporting Period, we conducted a reasonable country of origin inquiry (“RCOI”) that we believe is reasonably designed to determine whether any of these Conflict Minerals contained in our products originated or may have originated in the Democratic Republic of the Congo or an adjoining country (the “Covered Countries”) or are from recycled or scrap sources.
Axalta manufactures coatings for performance and mobility end markets. Our products are highly complex, typically containing hundreds of substances from many suppliers throughout the world. We may purchase the same materials from multiple suppliers and distributors. These suppliers and distributors often obtain their materials from lower tier suppliers. Accordingly, our supply chain is complex and identifying the ultimate source of materials supplied to us is difficult.
Axalta has a comprehensive process for tracking raw materials contained in our products. The process is designed to account for each substance contained in our raw materials and allows Axalta to trace the source of the substance. This process also helps to ensure that Axalta becomes aware of potential Conflict Minerals in our products as they are integrated into our supply chain, including new or changed raw materials. We generally purchase raw materials as needed to meet our customers’ needs.
Typically, tantalum and gold are not used in Axalta’s products, although their possible purchase and use is reviewed regularly. We do not believe that tantalum or gold were used in any Axalta products in the Reporting Period. Tungsten has historically sometimes been used in Axalta products although we do not believe that tungsten was used in the Reporting Period. Axalta’s supply chain does include tin or tin compounds typically found in catalysts and pigments. All such products that contain tin or tin compounds are purchased from major chemical or pigment manufacturers; no tin or tin compounds are purchased directly from any smelter.
Axalta requires sourcing from conflict-free sources but imposes no restrictions regarding country of origin. Axalta believes that requiring sourcing from outside the Covered Countries may negatively affect the economies of the Covered Countries. Based on the survey results described in “Results of Due Diligence,” the Company determined that the tin and tin compounds contained in our products may have originated from one or more of the Covered Countries. As a result, the Company conducted due diligence on the source and chain of custody of the necessary Conflict Minerals described below.
Due Diligence
Design of Due Diligence
We have designed our due diligence procedures to conform, in all material respects, with the due diligence framework presented by the Organisation for Economic Co-operation and Development (“OECD”) in the publication OECD (2016) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Third Edition, OECD Publishing and the related Supplements for gold and for tin, tantalum and tungsten (collectively, the “OECD Guidelines”). Selected due diligence measures in place during the Reporting Period are discussed below under the heading “Due Diligence Performed.” Sub-headings in that section conform to the headings used in the OECD Guidelines.
Due Diligence Performed
Establish strong company management systems
Responsible Minerals Policy
We established a Responsible Minerals Policy related to our sourcing of Conflict Minerals as described above and posted this policy on our website at: https://www.axalta.com/corporate/en_US/sustainability/human-rights.html.
The information on our website is not, and should not be deemed to be, a part of this Report, or incorporated into any other filings we make with the SEC.
Internal team
Axalta utilizes a cross-functional team to implement the Responsible Minerals Policy. This team is charged with establishing the process for complying with the policy. This includes implementation, review, and communication to senior management. Members of this team include professionals from operations, sourcing, legal, regulatory and product stewardship.
We have also utilized other management systems that include the use of a third-party vendor for managing relevant suppliers and the information we receive from them. Through our vendor’s tool, we can collect and store supplier data, administer supplier surveys using a Conflict Minerals Reporting Template (“CMRT”), communicate with suppliers and monitor risks in our supply chain. The use of these tools has allowed us to assist our suppliers in understanding our expectations and requirements and increase the rate of responses we have received from our suppliers to our survey requests.
Control systems
Axalta has a commitment to ethical and responsible business practices as demonstrated by the Axalta Code of Business Conduct and Ethics. Axalta has the same expectations of its suppliers. Axalta communicates these expectations through the Axalta Supplier Code of Conduct, which is available at: http://www.axaltacs.com/corporate/en_US/sustainability/human-rights.html.
The information on our website is not, and should not be deemed to be, a part of this Report, or incorporated into any other filings we make with the SEC.
Axalta’s model terms and conditions and raw material supply agreements contain, among other things, representations and warranties from suppliers concerning Conflict Minerals and an agreement by the supplier to abide by the terms of Axalta’s Responsible Minerals Policy.
Grievance Mechanism
Employees, suppliers, and customers can use Axalta’s Ethics Helpline to report any violations of Axalta’s Code of Business Conduct and Ethics or compliance policies, including Axalta’s Responsible Minerals Policy and Supplier Code of Conduct.
Maintain records
We maintain company-wide document retention policies. These policies extend to the documentation accumulated in performing our Conflict Minerals due diligence procedures and require that such documentation will be retained for a period of five (5) years.
Supplier engagement
We have also communicated with suppliers potentially affected by our Responsible Minerals Policy and compliance efforts, as identified through our RCOI, our expectation that they assist us in complying with our efforts related to our Conflict Minerals program. We have provided suppliers access to our Responsible Minerals Policy through the website above or upon request. Axalta continued its supplier sustainability risk management program during the Reporting Period, one element of which is a sustainability screen. Key supplier locations are requested to complete a questionnaire on topics related to the expectations in Axalta’s Supplier Code of Conduct, one element of which is Conflict Minerals.
Identify and assess risks in the supply chain
Due to the complexity of our products and the depth, breadth, and constant changes to our supply chain, it is difficult to independently identify sub-tier suppliers from our direct suppliers. We have relied on supplier responses to provide us with the information about the sources of Conflict Minerals contained in raw materials they supply to us.
Similarly, our direct suppliers also rely on information provided by their suppliers. Most of our suppliers provide sourcing data at the supplier company level or a division/segment level relative to the supplier, rather than at a level directly relating to a product that the supplier supplies to us or are otherwise unable to specify the smelters or refiners used for raw materials supplied to us. This chain of information creates a level of uncertainty and risk related to the accuracy of the information. We will continue to monitor, adapt, and modify our due diligence practices to conform to the recognized industry best practices. Axalta is a member of the Responsible Minerals Initiative (“RMI”), via which we track industry developments on responsible sourcing of minerals, including Conflict Minerals.
In accordance with the OECD Guidelines, it is important to understand risk levels associated with Conflict Minerals in the supply chain. The basis of this understanding stems from smelter or refiner information. Each facility that meets the RMI definition of a smelter or refiner of a Conflict Mineral is assessed according to red flag indicators defined in the OECD Guidelines. Axalta, via our third-party vendor, uses numerous factors to determine the level of risk that each smelter poses to the supply chain by identifying red flags. These factors include:
1. |
Geographic proximity to the Democratic Republic of the Congo and other Covered Countries; |
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2. |
Known mineral source country of origin; |
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3. |
Responsible Minerals Assurance Process (“RMAP”) audit status; |
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4. |
Credible evidence of unethical or conflict sourcing; and |
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5. |
Peer assessments conducted by credible third-party sources. |
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We believe that the inquiries and investigations described above represent a reasonable effort to determine the mines or locations of origin of Conflict Minerals in our products, including (1) seeking information about smelters and refiners in our supply chain through requesting that our suppliers complete the CMRT, (2) verifying those smelters and refiners with the expanding RMAP lists, (3) conducting the due diligence review, and (4) obtaining additional documentation and verification, as applicable and available.
Design and implement a strategy to respond to identified risks
As per the OECD Guidelines, risk mitigation will depend on the supplier’s specific context. Suppliers are given clear performance objectives within reasonable time frames with the goal of progressive elimination of these risks from the supply chain. Furthermore, suppliers will now be guided to our third-party vendor’s learning management system to engage in educational materials on mitigating the risk of smelters or refiners in the supply chain.
Carry out independent third-party audit of supply chain due diligence at identified points in the supply chain
We do not typically have a direct relationship with smelters and refiners and therefore do not perform or direct audits of these entities. However, we will rely on publicly available third-party assurances and certifications, for example, through the RMAP’s Conflict-Free Smelter Program and through our membership in the RMI.
Results of Due Diligence
Survey results
As described above, Axalta surveys our supply chain annually for use of Conflict Minerals and reviews the responses against criteria developed to determine whether further engagement is required. These criteria include untimely responses, incomplete responses and inconsistencies within the data reported in the CMRT.
As of November 5th, 2024, we received responses from 100% of our forty surveyed suppliers for the Reporting Period.
Efforts to determine mine or location of origin
Given that we do not have established relationships with the ultimate smelters and refiners from which the Conflict Minerals in our products are sourced, we have determined that requesting our suppliers to complete the CMRT represents our good faith effort to determine the mines or locations of origin of Conflict Minerals in our supply chain.
Based on information from RMAP, smelter or refiners, or suppliers, Axalta has reason to believe that the tin or tin compounds used in Axalta’s products, where known, may originate from the following countries (country of origin):
| Country of Origin | |||||
| Argentina | Morocco | ||||
| Australia | Myanmar | ||||
| Austria | Netherlands | ||||
| Belgium | Niger | ||||
| Bolivia (Plurinational State of) | Nigeria | ||||
| Brazil | Peru | ||||
| Burundi | Philippines | ||||
| Canada | Poland | ||||
| Chile | Portugal | ||||
| China | Republic of Korea | ||||
| Democratic Republic of the Congo | Russian Federation | ||||
| Estonia | Rwanda | ||||
| France | Singapore | ||||
| Germany | Slovakia | ||||
| Hong Kong | South Africa | ||||
| Hungary | Spain | ||||
| India | Sweden | ||||
| Indonesia | Switzerland | ||||
| Ireland | Taiwan | ||||
| Israel | Tanzania | ||||
| Japan | Thailand | ||||
| Korea | Uganda | ||||
| Luxembourg | United Kingdom | ||||
| Malaysia | United States | ||||
| Mexico | Vietnam | ||||
| Mongolia | Zambia | ||||
| *Axalta does not purchase from smelters or refiners from the Russian Federation. | |||||
Smelters and refiners
Of the suppliers surveyed, many completed the CMRT at the company, business unit or entity level, which means that we cannot confirm which specific processing facilities supply the tin or tin compounds that are included in the raw materials that they supplied to us. For all responses that indicated a smelter, Axalta compared the facilities named to the list of smelters maintained by the RMI. As of April 28, 2025, we have identified all the smelters or refiners that were reported by our suppliers via the CMRT. Appendix A lists the smelters and refiners that the suppliers we surveyed reported as being in their supply chains.
Based on the smelter list provided by the forty suppliers surveyed via the CMRT and publicly available information, we believe that 53 of 54 smelters reported in Axalta’s supply chain are certified Conflict-Free through the RMI’s RMAP. The RMAP is an initiative in which an independent third-party audits smelter and refiner activities and determines if the smelter or refiner demonstrated that all the minerals they processed originated from conflict‐free sources. We have assessed these facilities through the CMRT and publicly available information and determined that they are low risk or medium risk. Two smelters, as are identified on Appendix A, are no longer conformant to the RMAP as of
January 2025 and April 2025, respectively. We have communicated to our suppliers who cited these smelters that we will not accept raw materials containing tin or tin compounds from smelters that are not in conformance with RMI Audit standards. The raw materials purchased which contain tin or tin compounds from this smelter were purchased when the smelters were conformant to the RMAP throughout the Reporting Period.
Steps to be Taken
We are committed to complying with the provisions of the Rule and Regulation SD and expect to continue our efforts to further enhance our Conflict Minerals program and related due diligence. Our next steps may include, but are not limited to the following:
•Continue to engage with suppliers and direct them to training resources, including increasing the number of suppliers who utilize our third-party vendor’s learning management system and improve the content of responses to assist in our RCOI and our efforts to determine the processing facilities for and country of origin of any Conflict Mineral with the greatest specificity possible;
•Continue to encourage suppliers to provide responses at the product level;
•Implement a strategy to respond to identified risks, including but not limited to, potential action to be taken against suppliers that do not respond to our requests or do not provide reasonable information to support our due diligence activities;
•Engage any of our suppliers found to be supplying us with any Conflict Mineral from sources that support conflict in the Covered Countries to establish an alternative source that does not support such conflict; and
•Encourage our suppliers to work within their supply chain to maintain RMAP audit status.
Forward looking statements
Statements we make in this Report, which express a belief, expectation, or intention, as well as those that are not historical fact, are forward-looking statements, including statements relating to our compliance and due diligence efforts and expected actions identified under the “Steps to be Taken” section of this Report. These forward-looking statements are subject to various risks, uncertainties, and assumptions, including, among other things, our ability to implement improvements in our Conflict Minerals program and identify and mitigate related risks in our supply chain. If one or more of these or other risks materialize, actual results may vary materially from those expressed. For a more complete discussion of these and other risk factors, see our other filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2024. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report, and we undertake no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.
Appendix A
Smelters or Refiners and RMI Audit Status as of April 28, 2025
| Smelter | RMI Smelter Id | Metal | Country | RMI Audit Status | ||||||||||
| Malaysia Smelting Corporation Berhad (Port Klang) | CID004434 | Tin | Malaysia | Conformant | ||||||||||
| Alpha | CID000292 | Tin | United States of America | Conformant | ||||||||||
| Tin Technology & Refining | CID003325 | Tin | United States of America | Conformant | ||||||||||
| Metallic Resources, Inc. | CID001142 | Tin | United States of America | Conformant | ||||||||||
| Thaisarco | CID001898 | Tin | Thailand | Conformant | ||||||||||
| Rui Da Hung | CID001539 | Tin | Taiwan | Conformant | ||||||||||
| Aurubis Berango | CID002774 | Tin | Spain | Conformant | ||||||||||
| Luna Smelter, Ltd. | CID003387 | Tin | Rwanda | Conformant | ||||||||||
| Fenix Metals | CID000468 | Tin | Poland | Conformant | ||||||||||
| Minsur | CID001182 | Tin | Peru | Conformant | ||||||||||
| Malaysia Smelting Corporation (MSC) | CID001105 | Tin | Malaysia | Conformant | ||||||||||
| Dowa | CID000402 | Tin | Japan | Conformant | ||||||||||
| Mitsubishi Materials Corporation | CID001191 | Tin | Japan | Conformant | ||||||||||
| PT Babel Inti Perkasa | CID001402 | Tin | Indonesia | Conformant | ||||||||||
| PT Timah Tbk Kundur | CID001477 | Tin | Indonesia | Conformant | ||||||||||
| Smelter | RMI Smelter Id | Metal | Country | RMI Audit Status | ||||||||||
| PT Timah Tbk Mentok | CID001482 | Tin | Indonesia | Conformant | ||||||||||
| PT Refined Bangka Tin | CID001460 | Tin | Indonesia | Conformant | ||||||||||
| PT Stanindo Inti Perkasa | CID001468 | Tin | Indonesia | Nonconformant - Removed April 2025 | ||||||||||
| PT Artha Cipta Langgeng | CID001399 | Tin | Indonesia | Conformant | ||||||||||
| PT Sukses Inti Makmur | CID002816 | Tin | Indonesia | Conformant | ||||||||||
| PT Bangka Prima Tin | CID002776 | Tin | Indonesia | Conformant | ||||||||||
| PT Bangka Serumpun | CID003205 | Tin | Indonesia | Conformant | ||||||||||
| PT Menara Cipta Mulia | CID002835 | Tin | Indonesia | Conformant | ||||||||||
| PT Tinindo Inter Nusa | CID001490 | Tin | Indonesia | Conformant | ||||||||||
| PT Aries Kencana Sejahtera | CID000309 | Tin | Indonesia | Conformant | ||||||||||
| CV Ayi Jaya | CID002570 | Tin | Indonesia | Conformant | ||||||||||
| PT Mitra Stania Prima | CID001453 | Tin | Indonesia | Conformant | ||||||||||
| PT ATD Makmur Mandiri Jaya | CID002503 | Tin | Indonesia | Conformant | ||||||||||
| PT Cipta Persada Mulia | CID002696 | Tin | Indonesia | Conformant | ||||||||||
| CV Venus Inti Perkasa | CID002455 | Tin | Indonesia | Conformant | ||||||||||
| PT Bukit Timah | CID001428 | Tin | Indonesia | Conformant | ||||||||||
| PT Rajawali Rimba Perkasa | CID003381 | Tin | Indonesia | Conformant | ||||||||||
| PT Prima Timah Utama | CID001458 | Tin | Indonesia | Conformant | ||||||||||
| PT Sariwiguna Binasentosa | CID001463 | Tin | Indonesia | Conformant | ||||||||||
| PT Babel Surya Alam Lestari | CID001406 | Tin | Indonesia | Conformant | ||||||||||
| China Tin Group Co., Ltd. | CID001070 | Tin | China | Conformant | ||||||||||
| Gejiu Non-Ferrous Metal Processing Co., Ltd. | CID000538 | Tin | China | Conformant | ||||||||||
| Chenzhou Yunxiang Mining and Metallurgy Co., Ltd. | CID000228 | Tin | China | Conformant | ||||||||||
| Yunnan Chengfeng Non-ferrous Metals Co., Ltd. | CID002158 | Tin | China | Conformant | ||||||||||
| Tin Smelting Branch of Yunnan Tin Co., Ltd. | CID002180 | Tin | China | Conformant | ||||||||||
| Guangdong Hanhe Non-Ferrous Metal Co., Ltd. | CID003116 | Tin | China | Conformant | ||||||||||
| Jiangxi New Nanshan Technology Ltd. | CID001231 | Tin | China | Conformant | ||||||||||
| Chifeng Dajingzi Tin Industry Co., Ltd. | CID003190 | Tin | China | Conformant | ||||||||||
| White Solder Metalurgia e Mineracao Ltda. | CID002036 | Tin | Brazil | Conformant | ||||||||||
| Mineracao Taboca S.A. | CID001173 | Tin | Brazil | Conformant | ||||||||||
| Operaciones Metalurgicas S.A. | CID001337 | Tin | Bolivia (Plurinational State Of) | Conformant | ||||||||||
| Magnu's Minerais Metais e Ligas Ltda. | CID002468 | Tin | Brazil | Conformant | ||||||||||
| EM Vinto | CID000438 | Tin | Bolivia (Plurinational State Of) | Conformant | ||||||||||
| Aurubis Beerse | CID002773 | Tin | Belgium | Conformant | ||||||||||
| Fabrica Auricchio Industria e Comercio Ltda. | CID003582 | Tin | Brazil | Nonconformant - Removed Jan 2025 | ||||||||||
| PT Mitra Sukses Globalindo | CID003449 | Tin | Indonesia | Conformant | ||||||||||
| CRM Synergies | CID003524 | Tin | Spain | Conformant | ||||||||||
| Mining Minerals Resources SARL | CID004065 | Tin | Congo, Democratic Republic of the | Conformant | ||||||||||
| PT Putera Sarana Shakti (PT PSS) | CID003868 | Tin | Indonesia | Conformant | ||||||||||