German Carmaker Daimler Joins Responsible Cobalt Initiative

German carmaker Daimler (FWB:DAI) has joined China’s Responsible Cobalt Initiative (RCI) to ensure its cobalt supply chain is free from social and environmental risks, the company announced on Wednesday (April 25).

More than 50 percent of cobalt is mined in the Democratic Republic of Congo (DRC), with almost 20 percent coming from artisanal miners, which carry a higher risk of using child labor.

Cobalt is a key element in the lithium-ion batteries used to power electric vehicles (EVs). Daimler, which intends to reach 100,000 annual EV sales by 2020, joined the group at the start of April, RCI Chairman Sun Lihui told Reuters.

“With the Responsible Cobalt Initiative … Mercedes-Benz Cars is taking steps to combat the social and environmental risks in the cobalt value chain,” a Daimler spokesperson said.

“Transparency and governance will be improved and the risks of child labor diminished.”

Last year, Amnesty International released a report warning that industry giants, including Daimler and Renault (EPA:RNO), were still failing to tackle child labor in their cobalt supply chains and pointed to a lack of transparency in their assessments.

Sun said the RCI plans to set standards for a clean supply chain for cobalt, adding that firms in the industry should be given time to resolve problems associated with artisanal mining.

“Our red line of artisanal mining standards is zero child labor,” Sun said. “The improvement of the supply chain cannot be done by one or two companies. It requires the whole supply chain and consumers’ joint effort.”

The RCI was established under the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters (CCCMC) in 2016. Other members include Apple (NASDAQ:APPL), Sony (TSE:6758) and Volvo (STO:VOLV).

The RCI is currently chaired by the CCCMC, with China’s Zhejiang Huayou Cobalt (SHA:603799) and Germany’s BMW (ETR:BMW) as vice chairs.

Last week, the group presented its draft audit standards for cobalt refiners at a meeting in Paris attended by producers, consumers, non-governmental organizations and representatives of the DRC. The draft is open for public consultation until May 9.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.