Pilot Project Aims to Produce “Ethical Cobalt” from DRC Artisanal Mines

A pilot scheme to ensure cobalt from artisanal mines in the Democratic Republic of Congo (DRC) is mined ethically will launch this week.

As demand for cobalt, a key element in the lithium-ion batteries used to power electric cars, continues to surge, the need to ensure cobalt supply chains are free from human right abuses and child labor is critical.

The Better Cobalt trial project will asses safety at five small-scale and artisanal mines in the DRC and, for the first time, attempt to electronically track cobalt from the sites to ensure it isn’t mixed with metal from unknown sources, said Nicholas Garrett, a director at Better Sourcing Program, which is running the pilot.

The Better Cobalt trial project is backed by some of the largest actors within the cobalt sector, including China’s Huayou Cobalt, which supplies cobalt to technology giant Apple (NASDAQ:AAPL).

More than 50 percent of the world’s cobalt supply comes from the DRC, the world’s top cobalt-producing country, with about 20 percent extracted by artisanal miners, which carry a higher risk of using child labor.

Analysts believe the DRC will continue to be a main source of cobalt in the future. That’s why carmakers and technology companies such as Apple, Microsoft (NASDAQ:MSFT) and Tesla (NASDAQ:TSLA) are looking to ensure the metal is sourced ethically.

“It is literally impossible at the moment for any company to say that their cobalt supply chain is highly ethical,” Garrett said.

In fact, Amnesty International released a report last year warning that industry giants, including Renault (EPA:RNO) and Daimler (FWB:DAI), were still failing to tackle child labour. It also pointed to a lack of transparency in their cobalt supply chain assessments.

As a result, companies have started to look for ways to clean up their supply chains, with many trying to close long-term supply deals with miners directly as a way to ensure responsible sourcing.

The Better Cobalt project brings another solution to the table, as artisanal mining is still a big portion of the cobalt mined in the DRC.

“We can make sourcing from the artisanal and small-scale sector a possibility for more companies and, in fact, something that is a good contribution to the regional economy,” Garrett added.

Additionally, the program is looking to integrate blockchain technology and expand traceability down to global brands to provide even greater trust in any claims.

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