Professor Dorothée Baumann-Pauly is director of the Geneva Center for Business and Human Rights at Geneva University's School for Economics and Management and research director at the NYU Stern Center for Business and Human Rights.
Cobalt is an essential mineral used for batteries in electric cars, computers, and cell phones. Demand for cobalt is increasing as more electric cars are sold, particularly in Europe, where governments are encouraging the sales with generous environmental bonuses. According to recent projections by the World Economic Forum's Global Battery Alliance, the demand for cobalt for use in batteries will grow fourfold in 2030 as a result of this electric vehicle boom.
More than 70 percent of the world's cobalt is produced in the Democratic Republic of the Congo (DRC), and 15 to 30 percent of the Congolese cobalt is produced by artisanal and small-scale mining (ASM). For years, human rights groups have documented severe human rights issues in mining operations. These human rights risks are particularly high in artisanal mines in the DRC, a country weakened by violent ethnic conflict, Ebola, and high levels of corruption. Child labor, fatal accidents, and violent clashes between artisanal miners and security personnel of large mining firms are recurrent.
ASM cannot simply be shut down, however. It is a lifeline for millions of Congolese who live in extreme poverty. Cutting ASM out of the cobalt supply chain is neither feasible, due to the interwoven nature of the cobalt supply chain, nor desirable from a development perspective. Instead, companies committed to setting up responsible cobalt sourcing practices need to take responsibility for addressing the human rights violations that taint the DRC's ASM sector.
Some companies have started experimenting with so-called ASM formalization projects, which regulate mining methods and working conditions. During a research trip to Kolwezi in the DRC in September 2019, I visited the two largest active cobalt ASM formalization projects, one led by the Swiss-based commodity trading firm Trafigura, and the other by the biggest Chinese cobalt processing firm, Huayou Cobalt. Several other formalization projects are currently in the planning phase. Lessons from these projects and recommendations for companies were recently published in a World Economic Forum White Paper.
Most importantly, companies need to work with key stakeholders to establish a common ASM standard for mine safety and child labor and ensure ASM cobalt is sourced responsibly. "ASM formalization" can mean very different things to different companies, and no common standard or uniformity in its implementation exists. This lack of a common understanding of what constitutes "responsible ASM" hampers the acceptance of ASM cobalt in the market. Many large companies are currently not sourcing from the DRC because of human rights concerns. Many other companies that produce electronics or electric vehicles are, at least officially, not using cobalt from ASM sites, although they are well aware of the practical difficulties of separating out ASM cobalt from industrial production by tracking it at these mining sites.
To improve consumer confidence that cobalt from the DRC is not mined by children or in unsafe conditions, the mining industry needs to formalize its approach to these ASM sites. This requires a recognition that ASM will continue, that industry human rights standards will need to be put in place, and that those on the ground will need to have the capacity to monitor compliance with those standards. The DRC government has adopted a Mining Code and has already begun to assign pieces of land specifically for ASM. But full implementation of ASM formalization at scale will also require the support of private companies. These are enormously complex undertakings, but we can learn from several existing ASM formalization pilot projects and build these models to scale while also beginning to address the root causes for systemic human rights challenges in the DRC, such as child labor.
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Several leading companies are beginning to support common standards for ASM formalization. Working in a multi-stakeholder setting with key actors along the supply chain, globally and in the DRC, including the government, cooperatives and concession holders, civil society organizations, workers, and manufacturing and end-user companies will be key to developing systems that promote responsible cobalt production and trade practices.
The increasing world demand for battery minerals presents a unique opportunity to develop a model for responsible ASM cobalt. The benefits from the cobalt model could apply to the estimated 40 million artisanal miners around the world that work on extracting different minerals for a living. Solutions need to be put in place before the electric vehicle boom really takes off. The time for action is now.
Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.
