EX-1.01 2 franklin_ex0101.htm CONFLICT MINERALS REPORT

Exhibit 1.01

 

Franklin Wireless Corp.

 

Conflict Minerals Report

 

For The Year Ended December 31, 2016

 

This Conflict Minerals Report of Franklin Wireless Corp. (the "Company") has been prepared for the year ended December 31, 2016 in accordance with Rule 13p-1 under the Securities Exchange Act of 1934 (the “Rule”). The Rule was adopted by the Securities and Exchange Commission (SEC) to implement reporting and disclosure requirements related to Conflict Minerals as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The Rule imposes certain reporting obligations on SEC registrants who manufacture or contract to manufacture products containing Conflict Minerals which are necessary to the functionality or production of their products. Conflict Minerals are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum, tungsten, and gold (3TG) for the purposes of this assessment. These requirements apply to registrants whatever the geographic origin of the Conflict Minerals and whether or not they fund armed conflict. Please refer to Rule 13p-1, Form SD and the 1934 Act Release No. 34-67716 for definitions to the terms used in this Report, unless otherwise defined herein.

 

If a registrant can establish that the Conflict Minerals originated from sources other than the Democratic Republic of the Congo (“DRC”) or certain adjoining countries (the “Covered Countries”) or from recycled or scrap sources, it must submit a Form SD which describes the reasonable country of origin inquiry completed by the registrant.

 

If a registrant has reason to believe that any of the Conflict Minerals in its supply chain may have originated in any of the Covered Countries, or if it is unable to determine the country of origin of those Conflict Minerals, then the registrant must exercise due diligence on the Conflict Minerals’ source and chain of custody and submit a Conflict Minerals Report to the SEC that includes a description of those due diligence measures.

 

In accordance with the rules, the Company exercised due diligence to determine the Conflict Minerals status of Conflict Minerals necessary to the functionality or production of the wireless data communication products we sell.

 

The Company has determined in good faith that for calendar year 2017, its Conflict Minerals status resulting from its due diligence efforts shows a portion to be “DRC conflict undeterminable” and the remainder to be “DRC conflict free” (terms as defined in the Rule).

 

Company Overview

 

Franklin Wireless Corp. is a provider of intelligent wireless solutions including mobile hotspots, routers and modems as well as innovative hardware and software products that support machine-to-machine (M2M) applications and the Internet of Things (IoT). Our M2M and IoT solutions include embedded modules, modems and gateways built to deliver reliable always-on connectivity supporting a broad spectrum of applications. These products are designed to solve wireless connectivity challenges in a variety of vertical markets including video surveillance, digital signage, home security, oil and gas exploration, kiosks, fleet management, smart grid, vehicle diagnostics, telematics and many more.

 

 

 

 

 

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Product Overview

 

The Company focuses primarily on wireless modems and routers, which provide a flexible way for consumers to connect to wireless broadband networks from laptop or desktop computers.

 

Reasonable Country of Origin Inquiry (RCOI) and RCOI Conclusion

 

In order to manage the scope of this task, the Company relied upon its manufacturers and suppliers to provide information on the origin of the necessary Conflict Minerals that are used for functionality and production of the Company's wireless data communication products. The Company’s reasonable country of origin inquiry (RCOI) employed a combination of measures used to determine whether the necessary Conflict Minerals in the Company's products originated from the Democratic Republic of the Congo or an adjoining country.

 

Conflict Minerals Policy

 

Franklin Wireless has adopted the following Conflict Minerals policy:

 

Conflict Minerals refers to minerals (tin, tantalum, tungsten and gold) mined in the eastern provinces of the Democratic Republic of the Congo and in the adjoining countries where revenues may be directly or indirectly financing armed groups engaged in civil war resulting in serious social and environmental abuses.

 

While we do not source these minerals directly, they may exist in the components of the products we sell.  We are therefore committed to working with our suppliers to ensure that they responsibly source the materials and components used in manufacturing of these products.  We expect suppliers to establish their own due diligence program to achieve conflict-free supply chains. Franklin Wireless is committed to ethical practices and compliance with all applicable laws and regulations.

 

The policy is posted on our website at www.franklinwireless.com located in “Investor Relations” and “Social Responsibility.”

 

Due Diligence Process

 

The Company's due diligence measures were based on the Electronic Industry Citizenship Coalition and Global e-Sustainability (“EICC-GeSI”) initiative, known as the Conflict-Free Sourcing Initiative (CFSI), with the smelters and refiners of Conflict Minerals who provide those Conflict Minerals to our suppliers. We conducted a survey using a template developed jointly by EICC-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. Written instructions for the use of the Template is available on CFSI’s website located at www.conflictfreesourcing.org. The Template is being widely adopted by many companies in their due diligence processes related to Conflict Minerals.

 

 

 

 

 

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Franklin Wireless Corp.’s due diligence measures included:\

 

  - Conducting a supply-chain survey with the manufacturers regarding the suppliers of materials containing Conflict Minerals using the EICC-GeSI Conflict Minerals Reporting Template to identify smelters and refiners.
  - Taking the smelters and refiners identified in the supply-chain survey and comparing them against the list of smelter facilities which have been identified as “conflict free” by programs such as the EICC/GeSI Conflict Free Smelter (CFS) program for tantalum, tin, tungsten and gold.

 

As a company operating in the wireless communications business, the Company is several layers removed from the actual mining of 3TG. The Company does not make any direct purchases of raw ore or unrefined Conflict Minerals and makes no purchases in the Covered Countries.

 

Despite having conducted a good faith reasonable country of origin inquiry, the Company has concluded that its supply chain remains “DRC conflict undeterminable.” Franklin Wireless Corp. makes this determination due to the complexity of the Company's supply chain, and it will take some time for the suppliers of the manufacturers to conclude whether the necessary Conflict Minerals originated from the Covered Countries, and if so, whether the necessary Conflict Minerals were from recycle or scrap sources, were DRC conflict free or have not been found to be DRC conflict free.

 

In the next compliance period, the Company intends to implement steps to improve the information gathered from its due diligence to further mitigate the risk that its necessary Conflict Minerals do not benefit armed groups. These efforts include:

 

  - Improving communication with manufacturers and suppliers to improve due diligence efforts and increase data accuracy and completion.
  - Reviewing our Conflict Minerals policy when engaging with new contracted manufacturers and suppliers.

 

Smelters or Refiners Identified

 

The Company adopted the CFSI’s industry approach and traced back the origin of 3TG by identifying smelters, refineries or recyclers and scrap supplier sources. The Company leveraged CFSI and its CFS program to trace the mine of origin of the 3TG to its ore level. The CFS program audits smelters and refineries to ensure that all certified smelters and refineries only use the ores that are conflict free from the DRC and covered countries.

 

All suppliers and manufacturers of materials containing Conflict Minerals were contacted and more than 75% responded to the survey. As a result of the due diligence survey, the Company has gathered 248 smelters and refineries names from its supply chain. All of these smelters and refineries are identified as CFSI’s known smelters and refineries. Among these 248 smelters and refineries, 237 are on the list of CFSI's certified Conflict Free Smelters (CFS) list and considered to be conflict free, and with respect to the other 11, the CFSI has not provided an opinion as whether or not the minerals procured from these smelters and refineries originate from the DRC or surrounding countries.

 

 

 

 

 

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Set forth below is the list of identified smelters and refineries identified by CFSI identified by our supply chain and their country of origin:

 

Metal Smelter Name Smelter Country
Gold Advanced Chemical Company UNITED STATES
Gold Aida Chemical Industries Co., Ltd. JAPAN
Gold Allgemeine Gold-und Silberscheideanstalt A.G. GERMANY
Gold Almalyk Mining and Metallurgical Complex (AMMC) UZBEKISTAN
Gold AngloGold Ashanti Corrego do Sitio Mineracao BRAZIL
Gold Argor-Heraeus S.A. SWITZERLAND
Gold Asahi Pretec Corp. JAPAN
Gold Asahi Refining Canada Ltd. CANADA
Gold Asahi Refining USA Inc. UNITED STATES
Gold Asaka Riken Co., Ltd. JAPAN
Gold Aurubis AG GERMANY
Gold Bangko Sentral ng Pilipinas (Central Bank of the Philippines) PHILIPPINES
Gold Boliden AB SWEDEN
Gold C. Hafner GmbH + Co. KG GERMANY
Gold CCR Refinery - Glencore Canada Corporation CANADA
Gold Chimet S.p.A. ITALY
Gold Daejin Indus Co., Ltd. KOREA, REPUBLIC OF
Gold Daye Non-Ferrous Metals Mining Ltd. CHINA
Gold DODUCO GmbH GERMANY
Gold Dowa JAPAN
Gold DSC (Do Sung Corporation) KOREA, REPUBLIC OF
Gold Eco-System Recycling Co., Ltd. JAPAN
Gold Elemetal Refining, LLC UNITED STATES
Gold Emirates Gold DMCC UNITED ARAB EMIRATES
Gold Fanling, Hong Kong CHINA
Gold Geib Refining Corporation UNITED STATES
Gold Great Wall Precious Metals Co., Ltd. of CBPM CHINA
Gold Heimerle + Meule GmbH GERMANY
Gold Heraeus Ltd. Hong Kong CHINA
Gold Heraeus Precious Metals GmbH & Co. KG GERMANY
Gold Inner Mongolia Qiankun Gold and Silver Refinery Share Co., Ltd. CHINA
Gold Ishifuku Metal Industry Co., Ltd. JAPAN
Gold Istanbul Gold Refinery TURKEY
Gold Japan Mint JAPAN
Gold Jiangxi Copper Co., Ltd. CHINA
Gold Johnson Matthey Inc. UNITED STATES
Gold Johnson Matthey Ltd CANADA
Gold JSC Ekaterinburg Non-Ferrous Metal Processing Plant RUSSIAN FEDERATION
Gold JSC Uralelectromed RUSSIAN FEDERATION

 

 

 

 

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Gold JX Nippon Mining & Metals Co., Ltd. JAPAN
Gold Kazzinc KAZAKHSTAN
Gold Kennecott Utah Copper LLC UNITED STATES
Gold Kojima Chemicals Co., Ltd JAPAN
Gold Kwai Chung, Hong Kong CHINA
Gold Kyrgyzaltyn JSC KYRGYZSTAN
Gold LS-NIKKO Copper Inc. KOREA, REPUBLIC OF
Gold Materion UNITED STATES
Gold Matsuda Sangyo Co., Ltd. JAPAN
Gold Metalor Technologies (Hong Kong) Ltd. CHINA
Gold Metalor Technologies (Singapore) Pte., Ltd. SINGAPORE
Gold Metalor Technologies (Suzhou) Ltd. CHINA
Gold Metalor Technologies S.A. SWITZERLAND
Gold Metalor USA Refining Corporation UNITED STATES
Gold Metalurgica Met-Mex Penoles S.A. De C.V. MEXICO
Gold Mitsubishi Materials Corporation JAPAN
Gold Mitsui Mining and Smelting Co., Ltd. JAPAN
Gold MMTC-PAMP India Pvt., Ltd. INDIA
Gold Moscow Special Alloys Processing Plant RUSSIAN FEDERATION
Gold Nadir Metal Rafineri San. Ve Tic. A.S. TURKEY
Gold Navoi Mining and Metallurgical Combinat UZBEKISTAN
Gold Nihon Material Co., Ltd. JAPAN
Gold Ögussa Österreichische Gold- und Silber-Scheideanstalt GmbH AUSTRIA
Gold Ohura Precious Metal Industry Co., Ltd JAPAN
Gold OJSC "The Gulidov Krasnoyarsk Non-Ferrous Metals Plant" (OJSC Krastsvetmet) RUSSIAN FEDERATION
Gold OJSC Novosibirsk Refinery RUSSIAN FEDERATION
Gold PAMP S.A. SWITZERLAND
Gold Prioksky Plant of Non-Ferrous Metals RUSSIAN FEDERATION
Gold PT Aneka Tambang (Persero) Tbk INDONESIA
Gold PX Precinox S.A. SWITZERLAND
Gold Rand Refinery (Pty) Ltd. SOUTH AFRICA
Gold Republic Metals Corporation UNITED STATES
Gold Royal Canadian Mint CANADA
Gold Samduck Precious Metals KOREA, REPUBLIC OF
Gold SAXONIA Edelmetalle GmbH GERMANY
Gold Schone Edelmetaal B.V. NETHERLANDS
Gold SEMPSA Joyeria Plateria S.A. SPAIN
Gold Shandong Zhaojin Gold & Silver Refinery Co., Ltd. CHINA
Gold Sichuan Tianze Precious Metals Co., Ltd. CHINA
Gold Singway Technology Co., Ltd. TAIWAN
Gold SOE Shyolkovsky Factory of Secondary Precious Metals RUSSIAN FEDERATION
Gold Solar Applied Materials Technology Corp. TAIWAN
Gold Sumitomo Metal Mining Co., Ltd. JAPAN

 

 

 

 

 

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Gold T.C.A S.p.A ITALY
Gold Tanaka Kikinzoku Kogyo K.K. JAPAN
Gold The Great Wall Gold and Silver Refinery of China CHINA
Gold The Refinery of Shandong Gold Mining Co., Ltd. CHINA
Gold Tokuriki Honten Co., Ltd. JAPAN
Gold Torecom KOREA, REPUBLIC OF
Gold Umicore Brasil Ltda. BRAZIL
Gold Umicore Precious Metals Thailand THAILAND
Gold Umicore S.A. Business Unit Precious Metals Refining BELGIUM
Gold United Precious Metal Refining, Inc. UNITED STATES
Gold Valcambi S.A. SWITZERLAND
Gold Western Australian Mint trading as The Perth Mint AUSTRALIA
Gold WIELAND Edelmetalle GmbH GERMANY
Gold Yamamoto Precious Metal Co., Ltd. JAPAN
Gold Yokohama Metal Co., Ltd. JAPAN
Gold Zhongyuan Gold Smelter of Zhongjin Gold Corporation CHINA
Gold Zijin Mining Group Co., Ltd. Gold Refinery CHINA
Tantalum Changsha South Tantalum Niobium Co., Ltd. CHINA
Tantalum Conghua Tantalum and Niobium Smeltry CHINA
Tantalum D Block Metals, LLC UNITED STATES
Tantalum Duoluoshan CHINA
Tantalum Exotech Inc. UNITED STATES
Tantalum F&X Electro-Materials Ltd. CHINA
Tantalum FIR Metals & Resource Ltd. CHINA
Tantalum Global Advanced Metals Aizu JAPAN
Tantalum Global Advanced Metals Boyertown UNITED STATES
Tantalum Guangdong Zhiyuan New Material Co., Ltd. CHINA
Tantalum H.C. Starck Co., Ltd. THAILAND
Tantalum H.C. Starck GmbH Goslar GERMANY
Tantalum H.C. Starck GmbH Laufenburg GERMANY
Tantalum H.C. Starck Hermsdorf GmbH GERMANY
Tantalum H.C. Starck Inc. UNITED STATES
Tantalum H.C. Starck Ltd. JAPAN
Tantalum H.C. Starck Smelting GmbH & Co. KG GERMANY
Tantalum Hengyang King Xing Lifeng New Materials Co., Ltd. CHINA
Tantalum Hi-Temp Specialty Metals, Inc. UNITED STATES
Tantalum Jiangxi Dinghai Tantalum & Niobium Co., Ltd. CHINA
Tantalum JiuJiang JinXin Nonferrous Metals Co., Ltd. CHINA
Tantalum Jiujiang Tanbre Co., Ltd. CHINA
Tantalum Jiujiang Zhongao Tantalum & Niobium Co., Ltd. CHINA
Tantalum KEMET Blue Metals MEXICO
Tantalum KEMET Blue Powder UNITED STATES
Tantalum King-Tan Tantalum Industry Ltd. CHINA

 

 

 

 

 

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Tantalum LSM Brasil S.A. BRAZIL
Tantalum Metallurgical Products India Pvt., Ltd. INDIA
Tantalum Mitsui Mining & Smelting JAPAN
Tantalum Molycorp Silmet A.S. ESTONIA
Tantalum Ningxia Orient Tantalum Industry Co., Ltd. CHINA
Tantalum Plansee SE Liezen AUSTRIA
Tantalum Plansee SE Reutte AUSTRIA
Tantalum QuantumClean UNITED STATES
Tantalum Resind Industria e Comercio Ltda. BRAZIL
Tantalum RFH Tantalum Smeltry Co., Ltd. CHINA
Tantalum Solikamsk Magnesium Works OAO RUSSIAN FEDERATION
Tantalum Taki Chemicals JAPAN
Tantalum Telex Metals UNITED STATES
Tantalum Tranzact, Inc. UNITED STATES
Tantalum Ulba Metallurgical Plant JSC KAZAKHSTAN
Tantalum XinXing HaoRong Electronic Material Co., Ltd. CHINA
Tantalum Yichun Jin Yang Rare Metal Co., Ltd. CHINA
Tantalum Zhuzhou Cemented Carbide CHINA
Tin Alpha UNITED STATES
Tin Chenzhou Yunxiang Mining and Metallurgy Co., Ltd. CHINA
Tin China Rare Metal Materials Company CHINA
Tin China Tin Group Co., Ltd. CHINA
Tin Cooperativa Metalurgica de Rondônia Ltda. BRAZIL
Tin CV Ayi Jaya INDONESIA
Tin CV Gita Pesona INDONESIA
Tin CV Nurjanah INDONESIA
Tin CV Serumpun Sebalai INDONESIA
Tin CV United Smelting INDONESIA
Tin CV Venus Inti Perkasa INDONESIA
Tin Elmet S.L.U. SPAIN
Tin Elmet S.L.U. (Metallo Group) SPAIN
Tin EM Vinto BOLIVIA
Tin Fenix Metals POLAND
Tin Gejiu Non-Ferrous Metal Processing Co., Ltd. CHINA
Tin HuiChang Hill Tin Industry Co., Ltd. CHINA
Tin Jiangxi Ketai Advanced Material Co., Ltd. CHINA
Tin Magnu's Minerais Metais e Ligas Ltda. BRAZIL
Tin Malaysia Smelting Corporation (MSC) MALAYSIA
Tin Melt Metais e Ligas S.A. BRAZIL
Tin Metallic Resources, Inc. UNITED STATES
Tin Metallo-Chimique N.V. BELGIUM
Tin Mineracao Taboca S.A. BRAZIL
Tin Minsur PERU

 

 

 

 

 

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Tin O.M. Manufacturing (Thailand) Co., Ltd. THAILAND
Tin O.M. Manufacturing Philippines, Inc. PHILIPPINES
Tin Operaciones Metalurgical S.A BOLIVIA
Tin PT Aries Kencana Sejahtera INDONESIA
Tin PT Artha Cipta Langgeng INDONESIA
Tin PT ATD Makmur Mandiri Jaya INDONESIA
Tin PT Babel Inti Perkasa INDONESIA
Tin PT Bangka Prima Tin INDONESIA
Tin PT Bangka Tin Industry INDONESIA
Tin PT Belitung Industri Sejahtera INDONESIA
Tin PT BilliTin Makmur Lestari INDONESIA
Tin PT Bukit Timah INDONESIA
Tin PT Cipta Persada Mulia INDONESIA
Tin PT DS Jaya Abadi INDONESIA
Tin PT Eunindo Usaha Mandiri INDONESIA
Tin PT Inti Stania Prima INDONESIA
Tin PT Justindo INDONESIA
Tin PT Karimun Mining INDONESIA
Tin PT Menara Cipta Mulia INDONESIA
Tin PT Mitra Stania Prima INDONESIA
Tin PT Panca Mega Persada INDONESIA
Tin PT Prima Timah Utama INDONESIA
Tin PT Refined Bangka Tin INDONESIA
Tin PT Sariwiguna Binasentosa INDONESIA
Tin PT Stanindo Inti Perkasa INDONESIA
Tin PT Sukses Inti Makmur INDONESIA
Tin PT Sumber Jaya Indah INDONESIA
Tin PT Timah (Persero) Tbk Kundur INDONESIA
Tin PT Timah (Persero) Tbk Mentok INDONESIA
Tin PT Tinindo Inter Nusa INDONESIA
Tin PT Tommy Utama INDONESIA
Tin PT Wahana Perkit Jaya INDONESIA
Tin Resind Industria e Comercio Ltda. BRAZIL
Tin Rui Da Hung TAIWAN
Tin Soft Metais Ltda. BRAZIL
Tin Thaisarco THAILAND
Tin VQB Mineral and Trading Group JSC VIET NAM
Tin White Solder Metalurgia e Mineracao Ltda. BRAZIL
Tin Yunnan Tin Company Limited CHINA
Tin Yunnan Tin Group (Holding) Company Limited CHINA
Tungsten A.L.M.T. TUNGSTEN Corp. JAPAN
Tungsten Asia Tungsten Products Vietnam Ltd. VIET NAM
Tungsten Chenzhou Diamond Tungsten Products Co., Ltd. CHINA
Tungsten Chongyi Zhangyuan Tungsten Co., Ltd. CHINA
Tungsten Dayu Jincheng Tungsten Industry Co., Ltd. CHINA
Tungsten Dayu Weiliang Tungsten Co., Ltd. CHINA

 

 

 

 

 

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Tungsten Fujian Jinxin Tungsten Co., Ltd. CHINA
Tungsten Ganzhou Huaxing Tungsten Products Co., Ltd. CHINA
Tungsten Ganzhou Jiangwu Ferrotungsten Co., Ltd. CHINA
Tungsten Ganzhou Non-ferrous Metals Smelting Co., Ltd. CHINA
Tungsten Ganzhou Seadragon W & Mo Co., Ltd. CHINA
Tungsten Ganzhou Yatai Tungsten Co., Ltd. CHINA
Tungsten Global Tungsten & Powders Corp. UNITED STATES
Tungsten Guangdong Xianglu Tungsten Co., Ltd. CHINA
Tungsten H.C. Starck GmbH GERMANY
Tungsten H.C. Starck Smelting GmbH & Co.KG GERMANY
Tungsten Hunan Chenzhou Mining Co., Ltd. CHINA
Tungsten Hunan Chuangda Vanadium Tungsten Co., Ltd. Wuji CHINA
Tungsten Hunan Chuangda Vanadium Tungsten Co., Ltd. Yanglin CHINA
Tungsten Hunan Chunchang Nonferrous Metals Co., Ltd. CHINA
Tungsten Hydrometallurg, JSC RUSSIAN FEDERATION
Tungsten Japan New Metals Co., Ltd. JAPAN
Tungsten Jiangwu H.C. Starck Tungsten Products Co., Ltd. CHINA
Tungsten Jiangxi Gan Bei Tungsten Co., Ltd. CHINA
Tungsten Jiangxi Tonggu Non-ferrous Metallurgical & Chemical Co., Ltd. CHINA
Tungsten Jiangxi Xinsheng Tungsten Industry Co., Ltd. CHINA
Tungsten Jiangxi Xiushui Xianggan Nonferrous Metals Co., Ltd. CHINA
Tungsten Jiangxi Yaosheng Tungsten Co., Ltd. CHINA
Tungsten Kennametal Fallon UNITED STATES
Tungsten Kennametal Huntsville UNITED STATES
Tungsten Malipo Haiyu Tungsten Co., Ltd. CHINA
Tungsten Niagara Refining LLC UNITED STATES
Tungsten Nui Phao H.C. Starck Tungsten Chemicals Manufacturing LLC VIET NAM
Tungsten Pobedit, JSC RUSSIAN FEDERATION
Tungsten Tejing (Vietnam) Tungsten Co., Ltd. VIET NAM
Tungsten Vietnam Youngsun Tungsten Industry Co., Ltd. VIET NAM
Tungsten Wolfram Bergbau und Hutten AG AUSTRIA
Tungsten Xiamen Tungsten (H.C.) Co., Ltd. CHINA
Tungsten Xiamen Tungsten Co., Ltd. CHINA
Tungsten Xinhai Rendan Shaoguan Tungsten Co., Ltd. CHINA

 

 

 

 

 

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