Ethics of cobalt mining must be taken seriously by traders

Buyers need to create common standards and metrics to govern extraction process

Posted by Professor Michael Posner , Professor Dorothée Baumann-Pauly on March 22, 2022

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President Vladimir Putin’s attempt to bludgeon Ukraine into submission is forcing western governments and businesses to renew their focus on energy independence as a strategic imperative.

Shifting transportation from fossil fuels to battery power is part of the answer, and more batteries will require more cobalt mining. The challenge is how to mine cobalt safely and without exploiting children.

An indispensable ingredient in lithium-ion batteries for electric cars and trucks, cobalt provides a natural safeguard against overheating and fires. These batteries each contain between 6-9kg of cobalt, which will mean soaring demand as electric vehicle production increases.

The Democratic Republic of Congo holds about 70 per cent of the world’s cobalt supply. Rich in natural resources, the DRC has suffered from political instability since declaring its independence in 1960. A reform-minded leader, Felix Tshisekedi, was elected president in 2018, but the country still is struggling to recover from a legacy of conflict and corruption.

In this unpredictable environment, cobalt excavation in the DRC relies on both highly mechanised operations and informal, or artisanal, mines. The artisanal miners dig for small pieces of cobalt, often assisted by their children. They carry away what they find in burlap bags and sell to small traders on the open market, accounting for 15 per cent to 30 per cent of the country’ cobalt production.

DRC’s informal cobalt mining sector, which is thought to involve as many as 200,000 people, is barely regulated. As demand for EVs grows, so will artisanal cobalt mining.

Today, the DRC’s artisanal mines are not safe — a fact that industrial miners, traders and manufacturers of batteries and electric vehicles have failed to adequately address.

Injuries and death caused by the collapse of haphazardly dug tunnels occur regularly. Child labour is widespread. The US Department of Labor estimates that more than 25,000 children work in and around the mines, most of them too poor to go to school.

A 2016 report on child labour and other issues in the DRC’s cobalt mines from Amnesty International provided a wake-up call for the industry, but the companies that need cobalt for EVs have responded far too slowly and episodically.

Some have pledged not to source from informal mining sites, doing business only with the larger industrial mines. Others insist that they are not sourcing from the DRC at all, relying instead on, for example, Australian or Moroccan cobalt producers. Still others say they are rushing to deploy new battery technologies that do not rely on cobalt.

None of these strategies make practical sense. If battery manufacturers are buying directly or indirectly from the DRC, informally mined cobalt is likely included in their supply. Artisanal miners gravitate to locations with proven cobalt resources and operate in proximity to formal mining. Moreover, cobalt ore, regardless of who mines it, typically goes to the same refineries in the DRC and in China, making it virtually impossible to identify its source.

Given the Congo’s overwhelming market share, it’s also not realistic for global companies, including those involved in battery manufacturing, car and electronics makers as well as trading companies, to avoid doing business there. And while it’s likely that new battery technologies one day will not rely on cobalt, such advances are years away.

The best strategy for improving mine safety and reducing child labour is formalisation of artisanal mining. This means creating a common set of standards and metrics to govern the mining process, consistent with international labour and human rights standards. The rules need to establish measurable benchmarks, such as tunnel depth and adequate tunnel ventilation.

This is what the DRC government-backed Entreprise Général du Cobalt has begun to do. But many companies handling or using cobalt have not joined this effort or are working with each other to develop a common standard.

This was one objective of the Global Battery Alliance, which was created several years ago and attracted more than 90 business, government, academic, international and non-governmental organisations. Although the alliance hosted some useful preliminary conversations, it is far from building common standards and enforcement mechanisms.

Commodity traders, who play a key role in the production and transportation of cobalt, need to be centrally involved in this effort.

Collective action is needed to better protect cobalt miners in the DRC by improving mine safety and addressing the problem of child labour. In so doing, companies that are sourcing cobalt from the DRC support the creation of decent jobs that can back the socio-economic development of the DRC.

Commodity traders need to make responsible cobalt mining an integral part of their sustainability agenda, recognising its importance in addressing climate change — especially the need to accelerate the shift away from the fossil fuels that Putin relies on to feed his reckless geopolitical ambitions.

This article was first published by Financial Times, on March 22, 2022