The EU executive will table a proposal to include "mandatory country-by country disclosure" of money flows between mining companies and governments, a senior Commission official told the Financial Times.
The EU law will use the so-called 'Dodd-Frank' bill in the US as a minimum standard, said Klaus Rudischhauser.
The EU proposal is expected to be agreed eighteen months after the Dodd-Frank Act, a bill on so-called "conflict minerals", was adopted in the US (July 2010).
The US law requires oil, gas and mining companies listed on Wall Street to publicly disclose their income and tax payments. It also requires companies to certify whether their products contain minerals from rebel-controlled mines in Congo and other countries with oil and mining activities.
Minerals such as cobalt from the Democratic Republic of Congo (DRC) attracted international attention after being labelled 'conflict' or 'blood minerals' as the mining of these resources is reported to finance armed groups, which are waging bloody wars and committing atrocities to intimidate local populations in order to secure control of mines.
EU's 'Dodd-Frank Plus'
Rudischhauser told the FT that the EU executive is currently mulling whether to "include other companies not in the extractive industries, such as forestry or consumer goods," in the EU bill and whether there should be "disclosure of profits in addition to disclosure of taxes".
With plans for fuller disclosure, the initiative is already being dubbed 'Dodd-Frank Plus'.
The issue of transparency in the extractive industries is being addressed within a wider context of reforming EU financial markets. Late last year, a public consultation was organised to gather European stakeholders' views on financial reporting by multinational companies.
Rudischhauser's comments came on the fringes of the Extractive Industries Transparency Initiative (EITI) global conference, which gathered leaders from governments, companies and civil society organisations in Paris this week.
The EITI aims to strengthen governance by improving transparency and accountability in the extractive sector and supports improved governance in resource-rich countries through the verification and full publication of company payments and government revenues from oil, gas and mining.
The EU already supports the initiative and the Commission's February communication on raw materials suggests further enhancing European financial and political support for the EITI, and helping developing countries to implement it.
An EU 'Dodd-Frank' bill would be more binding than the EITI.