Daimler joins China’s Responsible Cobalt initiative
Cobalt consumers are under pressure to ensure the material they use is not tainted by child labor in the Democratic Republic of Congo, the source of about 60% of the world’s cobalt.
Amnesty International says about a fifth of the country’s cobalt production is mined by hand by informal miners including children, often in dangerous conditions.
Daimler, owner of the Mercedes Brand, joined the RCI at the start of April, RCI chairperson Sun Lihui told Reuters.
“With the Responsible Cobalt Initiative (RCI), 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 labour diminished”
The RCI, which groups high-profile cobalt users such as Apple, Sony Corp and Volvo, was established under the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters in 2016.
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 labour,” 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 last week held a meeting in Paris with the Organisation for Economic Cooperation and Development, where it presented its draft audit standards for cobaltrefiners.
The draft, which is open for public consultation until May 9, includes requirements such as the avoidance by cobaltrefiners of cash transactions where practicable, and conducting a risk assessment “on all cobalt material sourced”.
Participants at the Paris meeting included producers, consumers, nongovernmental organisations and representatives of the Democratic Republic of Congo.
Cobalt is a key ingredient in rechargeable lithium-ion batteries used for electric vehicles.
It has increasingly come under the spotlight as automakers lay out plans for huge investments in electric vehicles, demand for which is accelerating as governments around the world move to cut noxious emissions from carbon fuels.
These plans have fuelled expectations of cobalt shortages and spurred a price rally to near $44/lb from below $10/lb in December 2015.
Sources say the price surge will encourage artisanal mining. “The supply chain will respond by producing more artisanal material,” one cobalt industry source said.
Ex-Microsoft manager lands Responsible Cobalt Initiative role
Christina Feng, who managed the US tech giant‘s program for the responsible sourcing of raw materials until January 2017, was appointed to the full-time RCI role earlier this month and will be based in Beijing, Feng said in an interview with Reuters late on Wednesday.
The 28-member RCI, which groups high-profile cobalt users such as Apple, Sony Corp and Volvo, was established under the Chinese Chamber of Commerce for Metals, Minerals & Chemicals Importers and Exporters (CCCMC) in 2016.
It is currently in the process of selecting a premises for its secretariat in the Chinese capital.
Cobalt, a metal used in lithium-ion batteries for mobile phones and electric vehicles (EVs), has shot to prominence in recent months and its price has skyrocketed due to expected growth in demand from the booming EV sector, especially in China.
But Amnesty International has warned of human rights abuses, including child labor, linked to cobalt mining in the Democratic Republic of Congo (DRC), which produces more than 60% of the world’s cobalt.
“I consider my role as being responsible for the operations of the secretariat, defining the strategy of the RCI and developing work plans in consultation with board members and other member companies,” Feng told Reuters.
“I think right now the priority is to really define our strategy” for at least the next three years after a long formalisation process, she added.
The RCI is currently chaired by the CCCMC, with China‘s Zhejiang Huayou Cobalt Co and Germany‘s BMW as vice chairs.
Feng said she has never been to the DRC but is planning a visit. The child labour issue is “on the top of our radar” but a “complicated issue in the DRC context,” she added.
The RCI intends to hold an open session for cobalt market participants at the Organisation for Economic Co-operation and Development, a key backer of the RCI, in Paris in mid-April, said Feng
Chinese control of cobalt supply risk for EU car industry – Glencore
“If cobalt falls in hands of the Chinese, yeah you won’t see EVs being produced in Europe. They are waking up too late… I think it’s because the car industry has never had a supply chain problem before,” Glasenberg told the FT Commodities Global Summit in Lausanne, Switzerland.
About 70% of global cobalt production comes from the Democratic Republic of Congo. Glencore, the world’s biggest producer, agreed last week to sell a third of its output to China‘s GEM.
Glasenberg said he was nevertheless prepared to sell cobalt mines in the DRC to China if it came with a very good price. He added that the company wasn’t changing production plans in the DRC and that the working group of miners were still working with the government on stability clause length and royalties.