Human

Li-ion batteries, cobalt and conflict

 By Andrew Burger

For more than a decade, mining and mineral resources companies, along with their biggest manufacturing and corporate customers, have sought to get a better handle on sourcing of cobalt to address revelations of widespread exploitation and hazardous, life-threatening conditions—including child labor—associated with its mining…

When it comes to cobalt, Congo, and more specifically the area surrounding the southern city of Lubumbashi, is the world’s largest supplier by far, accounting for some 60 percent of global supply. Cobalt is geologically abundant but typically widely diffused among other mineral ores with which it is discovered (typically nickel and copper). Prices and demand for cobalt has been soaring amidst fast-growing manufacturing and sales of smartphones, tablets and other mobile computing and communications devices, such as Apple iPhones and iPads. Adding to this is increasing demand for much larger Li-ion batteries used in electric vehicles (EVs), and stationary versions that are being installed in homes and businesses by government and electric utilities. Apple on March 3 announced it had stopped buying cobalt from artisanal miners in the southern African country. In a related report the company produced Apple stated: “There’s a right way to make products. It starts with the rights of the people who make them.”

Electric vehicle Li-ion battery (Tennen-Gas, Wikimedia)

Mining, and Buying, Cobalt

Apple’s ban on purchasing of cobalt mined by manual labor is a temporary one that will remain in effect until management is able to accurately and comprehensively assess the origins of cobalt it purchases from its extensive roster of supply chain partners.
In addition to its own report, Apple’s announcement came in the wake of last year’s publication of the results of a Washington Post investigation that revealed the use of child labor and hazardous working conditions under which manual laborers in the area around Lubumbashi work and live.

Last September, the Post’s Todd C. Frankel reported: “An estimated 100,000 cobalt miners in Congo use hand tools to dig hundreds of feet underground with little oversight and few safety measures, according to workers, government officials and evidence found by The Washington Post during visits to remote mines.” “Deaths and injuries are common. And the mining activity exposes local communities to levels of toxic metals that appear to be linked to ailments that include breathing problems and birth defects, health officials say.” In its investigative report, the Washington Post zeroed in on one of Apple’s supply chain partners. China’s Zhejiang Huayou Cobalt Company is the world’s single largest buyer of cobalt from the DRC. According to the report, the company buys minerals from some artisanal mining operators that employ children and all workers labor under harsh working conditions. Apple’s wholesale, supply chain-wide ban on purchasing of “conflict cobalt” mined by manual laborers is the latest in a long string of announcements related to ethical sourcing of cobalt by some of the world’s largest and highest profile corporations. Broad-based efforts to put an end to purchasing “conflict cobalt” from the DRC and worldwide initially emerged over a decade ago.

Taking Action to Ban Purchasing of “Conflict Cobalt”

With roots stretching back some 200 years and an agreement among a consortium of Western European mining and smelting companies, Brussels-based Umicore is one of if not the largest metals and minerals refining and recycling corporations in the world. It employs some 10,100 people and earns annual revenues of some 11.1 billion euros at present. Management has long recognized, and has been taking actions to address and resolve, the existence of human rights and labor abuses associated with artisanal mining of cobalt in the Congo, as well as similar operations involving other minerals in countries around the world.
More broadly, the company has been recognized internationally for its sustainability policies—the focus has been on sourcing and refining metals and minerals used to lower carbon and greenhouse gas vehicle emissions, such as platinum, which is used in automobile catalytic converters, and those used in the production of Li-ion batteries. Umicore was the first company in the world to introduce a “Sustainable Procurement Framework” for cobalt, which it did in 2004, and the first to have an “ethical approach” to cobalt procurement validated by an independent third party. As management explains, this ethical, sustainable procurement framework “aims to minimize the risk of any connection between the cobalt in its [Umicore’s] supply chain—and subsequently that of its customers–and human rights abuses or unethical business practices.” Among the associated efforts it has subsequently taken, Umicore has addressed specific risks associated with unethical mining practices, such as child labor and poor health and safety conditions, management points out.

A miner from Kamatanda, one of the mining areas in the Katanga (MONUSCO Photos, Wikimedia)

Large Obstacles

Eliminating purchasing of “conflict cobalt,” much less instituting effective enforcement and reporting, if not independent auditing, across the widely dispersed and complicated cobalt supply chain poses tremendous challenges. As with like-minded efforts to ban diamonds and other conflict minerals, corporations on both the supply and demand side of the cobalt value chain, along with governments, community groups and other stakeholders, have joined to pool their resources and hash out the details required to establish self-regulatory standards, methods, tools and reporting requirements. Third-parties that offer regulatory compliance, reporting, logistics and supply chain monitoring and management and more narrowly focused, relevant products and services to mineral resources companies have joined in efforts to eliminate the purchase of “conflict” cobalt from the global economy.

Source Intelligence sees a revolution in supply chain management taking shape, one fostered by rapid deployment of “Internet of Things” technology. Key examples of which include network-connected wireless sensors embedded in all manner of connected devices–home appliances, consumer goods, industrial machinery, vehicles and other modes of transportation—along with associated low-power wireless networks and cloud-based “Big Data” analytics application services. More to the point, Source Intelligence runs a Conflict Minerals Program. “We are looking at cobalt as an additional ‘conflict mineral’ to 3TG and finding methods to increase transparency and trace cobalt sourcing in supply chains, a company representative explained an an online chat. “The 2015 SEC [U.S. Securities and Exchange Commission] conflict minerals filings marked the third year of conflict minerals reporting,” the company highlights. Source Intelligence analyzed all the SEC report filings, which are made voluntarily, in an effort to better understand and share news of developments regarding the activities of companies listed on U.S. stock exchanges.

Conflict Minerals Reporting

Generally speaking, companies’ fiscal year 2015 SEC conflict minerals report filings revealed that more companies are disclosing greater amounts of information regarding anything to do with conflict minerals. Furthermore, supplier response rates increased and more independent audits were conducted. Disclosures on the part of smelters rose as well, and reporting companies were refining their approach and reporting mechanisms. “While companies may not be legally bound to provide full disclosure when it comes to conflict minerals, there is growing pressure from consumers, advocacy organizations, stockholders and others that are prompting businesses to be more transparent,” Source Intelligence CEO Jess Krause pointed out. Nearly half (47 percent) of the 521 companies that had filed fiscal year 2015 conflict minerals reports with the SEC were involved in manufacturing-related industries. Companies in the electronics sector made up 14 percent, apparel and retail accounted for 12 percent and business services sectors for 11 percent.

Chief Scientific Officer Jennifer Kraus urged readers and reporting companies to maintain their commitment and focus, and “not lose sight of the grander picture–responsibility and transparency.” “We commit to transparency by choosing to be a responsible member of the communities in which we work, play and live. It’s simple. Then watch, good things will happen,” she wrote in the report’s introduction.

SEE MORE: Battery against Battery by Andrew Burger

about the author
Andrew Burger
Andrew Burger has been reporting on energy, technology, political economy, climate and the environment for a variety of online media properties for over five years.