As the transition to a net-zero economy gathers pace, attention is being brought to bear on how the world is going to source the vital materials that will enable decarbonisation at scale.
We know that electrifying the economy and switching to renewable power are central to the task of reducing greenhouse gas emissions, and that achieving these aims will require a massive increase in the supply of metals such as copper and cobalt. But how do we ensure that we don’t simply replace environmental risks with another set associated with the production and supply of those metals, where the most vulnerable communities pay the price?
The question is all the more important as the world looks to resource-rich countries like the Democratic Republic of the Congo (DRC) to boost supplies of copper and cobalt. At Trafigura we’ve set ourselves the task of answering that question with a series of initiatives aimed at improving working conditions, promoting transparency and fostering constructive community relations. One of the elements that makes our programme of work different (and all the more impactful) is our approach to developing partnerships across stakeholder groups.
The issue of avoiding social risk whilst enabling decarbonisation is significant and complex, but we strongly believe that it is possible to put in place responsible sourcing arrangements in which buyers of metal and end-users of metal products can have confidence. Doing so requires the recognition and management of certain realities, including the important role played by artisanal small-scale mining (ASM).
Two thirds of global cobalt production comes from the DRC. ASM accounts for a significant proportion of that figure. Uncontrolled ASM is a tough and often dangerous occupation, but it is a livelihood on which an estimated 200,000 people and their families depend. The proper response to ASM is not to hide from it or seek to exclude its products, but to engage, openly and responsibly, to improve standards.
This is what Trafigura is doing in the DRC with the NGO Pact and in co-operation with Entreprise Générale du Cobalt (EGC), a state owned enterprise established in 2019 to purchase, process and sell ASM cobalt.
Trafigura has been working with Pact for a number of years. One of the many strengths of Pact, borne out of decades of experience in formalising ASM, is its ability to align the interests of commercial counterparties with that of local impacted communities. While Trafigura prides itself on a solid understanding of local dynamics, we have benefitted hugely from Pact’s on-the-ground presence and community network in the DRC and elsewhere.
In October 2020, Trafigura entered into a marketing agreement with EGC. A key component of the contract involves support from Trafigura and Pact to develop a system of controls and traceability from mine-to-market under the ‘EGC Responsible Sourcing Standard’. The Standard was developed following extensive collaboration with Trafigura and Pact, and is aligned with OECD Guidance and DRC law and mining regulations. It outlines ‘what good looks like’ when it comes to formalising and controlling ASM – not only from the perspective of individuals engaged in ASM, but also through the lens of the State, civil society, and commercial entities. The Standard was launched at the end of March 2021, but already its uptake has been positive and there is a healthy appetite amongst project participants to develop additional guidance as the standard is put to use.
Trafigura and Pact already have experience in working together in this field, having piloted an ASM management system with DRC mining entity ‘Chemaf’ at the Mutoshi concession in Kolwezi. Some 5,000 ASM workers organised themselves into a co-operative. Only authorised personnel aged 18 or over with ID cards and protective equipment were allowed access to the site. ASM cobalt was kept segregated from conventional mined production throughout the extraction, transportation, refining and sale process. That way, buyers, and financial institutions supporting the trade, could be sure of what was being bought and how it was produced. That collaborative cross-sector approach gave the DRC authorities confidence to authorise the roll-out of similar controls on a much larger scale, through Trafigura’s agreement with EGC.
The scale of the operational challenge and the intricacies of building and maintaining trust in this context are profound. ASM is a complex issue, but it is one that governments, civil society, communities and companies can and must address, working together. Only then will we have the best possible chance of ensuring that vulnerable communities do not get left behind.
Shorter version first published in Jeune Afrique, July 2021 print edition in French.