The Securities and Exchange Commission, by a 3-2 vote on Wednesday, approved a long-delayed rule that requires companies to make specialized disclosures about their use of so-called “conflict minerals.”

Section 1502 of the Dodd-Frank Act directed the SEC to adopt a rule requiring corporate disclosures related to the use of certain minerals that are mined in the Democratic Republic of Congo, or adjoining countries, and used to finance the militia groups responsible for ongoing, violent conflict in the region.

Originally planned to be in effect by April of last year, controversy and cost-concerns led to numerous rulemaking delays.

In a cost analysis, SEC staff estimated that the total start-up cost for companies to comply would be between $3 billion to $4 billion, with annual costs ranging between $206 million to $609 million. Some initial estimates, provided through the public comment process, pegged the initial compliance costs as high as $16 billion. The Commission's initial estimate was far lower, $71 million.

The final rule applies to a company that uses minerals including tantalum, tin, gold or tungsten if the company files reports with the SEC under the Exchange Act, or the minerals are “necessary to the functionality or production” of a product manufactured or contracted to be manufactured by the company.

A company is not considered to have influence over the manufacturing if it merely: affixes its brand, logo, or label to a generic product manufactured by a third party; it services, maintains, or repairs a product manufactured by a third party; or specifies or negotiates contractual terms with a manufacturer that do not directly relate to the manufacturing of the product.

Companies will need to disclose on a new form to be filed with the SEC (Form SD) whether they manufacture, or contract to manufacture, products that contain conflict minerals. They will be required to conduct “a reasonable inquiry” into the origins of minerals they use that may come from the war-torn region, either directly or indirectly. Required due diligence will include an audit of the conflict minerals report.

Issuers using recycled or scrap conflict minerals will also be required to conduct an inquiry but, in response to industry concerns, the final rule was changed so that they are not automatically required to conduct due diligence of their supply chain and file a conflict minerals report. If it is later determined that these minerals originated, or may have originated, in the covered countries, or are not actually recycled or scrap, the issuer will be required to conduct due diligence.

In another concession to industry concerns, issuers will have the option of reporting that their products are "conflict undeterminable" for a limited time (two years for large companies, four years for small and mid-sized operations) if they have difficulty tracking the supply chain and providing confirmation one way or the other. Although there was pressure to do so, the rule did not provide an exemption for small- and medium-sized companies.

The inaugural reports will need to compile data for calendar year 2013 and be filed by May 31, 2014.

Although the final language that will be published in the Federal Register wasn't available as this story was posted on Wednesday afternoon, highlights of the rule were posted by the SEC online.

Commissioners Troy Paredes and Daniel Gallagher voted against the rule, with both saying that the intent, while laudable, went beyond the scope of what the SEC should be tasked with.

“The situation in the Congo is repugnant on every level, it must be stopped,” Gallagher said, but it is “not an objective that fits anywhere within the SEC's statutory mission.”

“I'm not a foreign or humanitarian policy expert, but it seems to me that taking the fight directly to the warlords would be a much more efficient process than waiting or hoping for some positive trickle-down effect attributable to new SEC reporting requirements,” he said, adding, “we are not the right tool for this job.”

By a 2-1 vote (Chairman Mary Schapiro and Paredes recused themselves, and Gallagher voted against) the Commission also voted to implement a rule that requires oil, gas and mining companies to disclose any payment, or series of related payments, totaling $100,000 or more that are made during the course of a fiscal year to the U.S. or foreign governments in exchange for extracting resources. It too was required by the Dodd-Frank Act.

The initial, industry-wide cost of compliance was estimated at between $44 million and $1 billion; ongoing costs were pegged at between $200 million to $400 million a year. Although the final language of the rule had yet to be released as of Wednesday afternoon, the SEC did release a "Fact Sheet" of its major points that can be found here.