The Democratic Republic of Congo (DRC) is the world’s largest producer of cobalt and holds more than 50 percent of the global cobalt reserves. Cobalt is used in lithium-ion batteries that form an integral part of electric automobiles, mobile phones and laptop computers. Demand for cobalt is expected to rise significantly over the coming years. Cobalt is extracted in mechanized and artisanal mining operations. Recent reports have highlighted concerns over unsafe working conditions and child labor in artisanal cobalt mining.
In early 2017, Responsible Minerals (RMI) Initiative members established a workgroup focused on the responsible sourcing of cobalt and in particular risks related to instances of child labor in cobalt mining in the DRC. Through the workgroup, member companies are working to identify methods to increase transparency in cobalt supply chains and promote the responsible sourcing of this mineral. A Cobalt Reporting Template (CRT) has been drafted to collect data associated with the cobalt supply chain to facilitate due diligence efforts.
Why Is Cobalt so Important?
Cobalt is an essential raw material for superalloy, cemented carbide, diamond tool, batteries, anticorrosive and magnetic materials. It is widely applied in fields including aerospace, electronic appliances, machinery manufacturing, automobiles, chemical industry, agriculture, ceramics, etc. An important fact to note is that lithium-ion batteries for electric vehicles are estimated to experience the largest increase in consumption of battery-used cobalt. Global production volume of electric vehicles grew exponentially in recent years, with a growth rate far higher than that of traditional automobiles. The production volume in China reached 710,000 units in 2017, up by 30% over the previous year. As the major raw material for electric vehicles, cobalt is expected to boast rapid growth. Moreover, power batteries account for the largest proportion in the downstream application of cobalt.
Industry practitioners should begin assessing their company’s risk associated with the sourcing of Cobalt. While a specific regulation has yet to be promulgated, many experts have hinted that given the reputational, financial and legal risk associated with current controversial sourcing practices, it’s only a matter of time before Cobalt becomes “the next conflict mineral”.
Though cobalt is often bucketed into the general conflict minerals conversation, cobalt carries characteristics that make it unique to the rest of the 3TG minerals. Request a demo with one of our experts to see how we can help your ethical cobalt sourcing efforts!
