Cobalt: The New Conflict Mineral?

The Washington Post’s latest story exposes the often dangerous conditions faced by African workers in cobalt mines, adding to the increasing worldwide attention paid to human rights issues in global supply chains and raw material sourcing.

Cobalt is highly valued as a key component of lithium batteries. Current estimates show that 50 percent or more of the world’s cobalt production derives from mines in the Democratic Republic of the Congo (DRC). Substandard cobalt mining conditions in the Congo have been tied to miner deaths, and the use of child labor is prevalent. A handful of human rights groups are pushing to add cobalt to the list of so-called “conflict minerals” to be regulated and monitored for ties to human rights abuses and deadly wars in central Africa. Although cobalt is not yet officially tied to government watch lists or regulations, many governments will start investigations and fine companies for using raw materials that are tied to human rights violations.

Currently, the United States regulates the use of conflict minerals and similar rules are pending in the European Union. China has also issued guidelines for the ethical sourcing of minerals. Currently regulated conflict minerals are referred to as “3TG,” which are columbite-tantalite, also known as coltan (from which tantalum is derived); cassiterite (tin); gold; wolframite (tungsten); or their derivatives; or any other mineral or its derivatives determined by the U.S. Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country. Section 1502 of the Dodd-Frank Act requires publicly traded companies in the United States to make a reasonable determination whether their products contain the 3TG minerals sourced from mines in the DRC or adjoining regions. The legislation aims to prevent or significantly reduce the sale of conflict minerals in order to stem revenues that fund an ongoing deadly war in that region.

Demand for cobalt is expected to rise due to the increase in battery production expected as the market for electric vehicles and other green-energy initiatives grows. Tesla, for example, is building one of the world’s largest battery production facilities in Nevada to accommodate its electric vehicle manufacturing. China is rapidly building electric buses, including a manufacturing plant in Lancaster, Calif.

A few groups are leading efforts to promote ethical and responsible sourcing of cobalt. Mining companies, for instance, are looking to institutionalize cobalt mines in central Africa to ensure proper mining techniques are followed and revenues do not end up in the hands of warlords. However, these efforts will take time while world attention on cobalt mining and human rights violations is only expected to increase.  In the meantime, more companies with battery products – including laptops, mobile phones and automotive vehicles – will likely face greater pressure to disclose their cobalt sources.

If you would like to support investigating your supply chain for unethically sourced cobalt, Source Intelligence can help.