Exploring the Ethical Dimensions of Cobalt Mining: A Compelling Teaching Case

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Why the Cobalt Supply Chain Demands Attention

The demand for electric vehicles is skyrocketing due to growing concerns about climate change. However, the production of battery-powered cars and trucks heavily relies on cobalt, a mineral mostly found in the Democratic Republic of Congo (DRC). Unfortunately, the DRC is plagued with issues such as child labor and unsafe mining conditions. As an example, an electric vehicle battery contains about 8kg of cobalt, and global demand is set to triple by 2035.

Around 70% of cobalt originates from the DRC, with a significant portion being produced through informal or artisanal small-scale mining (ASM). These ASM miners, operating around large industrial mining sites, use makeshift methods to extract cobalt ore and employ approximately 25,000 child workers. The close proximity between informal and formal operations, along with a lack of effective regulation, makes artisanal operations an integral part of the overall cobalt supply chain.

The Challenge of Accountability in Mining

Most car manufacturers and electronics companies aim to exclude ASM cobalt from their supply chains due to reputational risks, which are reinforced by investor concerns. Major mining companies like Glencore, based in Switzerland, claim that their cobalt output solely comes from large industrial mines. However, the situation is far more complex.

Every day, tens of thousands of people in the DRC engage in small-scale mining on the outskirts of large-scale operations. They sell the cobalt to local traders, mostly of Chinese origin, who then send it to refineries in the DRC and China for processing. The interconnections during extraction and refinement make it nearly impossible to separate ASM cobalt from industrially mined material.

To improve working conditions in ASM operations, companies must establish and enforce human rights standards at artisanal mine sites. This includes controlling access, implementing strict safety protocols, and requiring the use of personal protective equipment. The formalization of these operations would also empower women workers, overcoming superstitions and increasing household income.

Slow Progress due to Politics and Bureaucracy

Progress has been hindered by the weak government in the DRC. In 2021, the government launched Responsible Sourcing Standards for artisanal cobalt production and established the Entreprise Générale du Cobalt (EGC), a state entity dedicated to regulating the buying and selling of artisanal cobalt. However, these standards only exist on paper, as the EGC has yet to begin operating due to political and bureaucratic challenges.

Furthermore, due to a temporary oversupply of cobalt, artisanal miners have begun digging for copper on the same sites. Responsible sourcing standards should be expanded to include both cobalt and copper.

Addressing Human Rights Risks and EU Regulation

Businesses in the cobalt supply chain, including automakers and electronics companies, should take responsibility for addressing the human rights risks in artisanal cobalt mining in the DRC, regardless of whether they directly procure material from the country. They should develop strategies to comply with EU regulations on global labor supply chains.

Collaboration among companies is essential to develop mine safety and child labor standards at artisanal mining sites. Chinese-owned companies should also be involved to a significant extent due to their presence in the supply chain.

The DRC government needs to strengthen its regulatory framework for ASM cobalt by operationalizing the Responsible Sourcing Standards and enabling the EGC to carry out its mandate. Western governments can support and expedite these efforts through various means.

About the Authors

Michael Posner is the Director of the New York University Stern Center for Business and Human Rights, while Dorothée Baumann-Pauly is the Head of the University of Geneva Center for Business and Human Rights.


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