Will formalizing artisanal mining ensure sustainable cobalt supply from the Democratic Republic of Congo?

DRC minister, Julien Paluku Kahongya, says regulation of artisanal mining is the way forward to ensure sustainable and ethical cobalt production for the battery raw materials market

Formalizing artisanal mining is the way forward to ensure sustainable and ethical cobalt production across the value chain, Julien Paluku Kahongya, minister of industry for the Democratic Republic of Congo (DRC) said on Tuesday May 17 at the Cobalt Institute conference in Zurich, Switzerland.

“The government in the DRC is aware it needs to regulate the artisanal mining sector,” Paluku said, to ensure the safety of workers, eliminate child labor, and facilitate the activity as a source of income for the local population.

Global demand for cobalt is rising. With consumption increasing from the battery and electric vehicle (EV) industries, international automakers see achieving sustainable supply as a crucial part of their long-term sourcing strategies.

This involves tackling the issue of informal, unregulated mining activities in the DRC – the world’s largest cobalt origin. Entire families, including children, work in unsafe conditions, often down precariously dug tunnels, to extract cobalt ore that they then sell to local traders.

Although large, industrialized miners do not handle informally mined cobalt, the material still finds its way to refineries in China, creating a traceability problem and environment, social and governance (ESG) concerns for consumers.

Interested in reading more about the the risks and ESG concerns currently facing the battery raw materials market? Access the recent Fastmarkets BRM risk matrix to find out more.

Making practice “safe and sustainable”

There is a need for local authorities to make the practice “safe and sustainable,” David Brocas, head cobalt trader at miner-trader Glencore, said. But, he added, “banning artisanal mining would take two million Congolese away from their only source of income.”

“Formalizing artisanal mining [is a way] to bring an end to child labor,” Brocas said.

Cobalt demand grew by 22% in 2021 and is expected to continue growing at around 30% per year in the next few years, driven by the fast-expanding EV sector, Brocas said in his opening remarks at the CI event.

With the DRC accounting for 74% of total mine supply, over 10% of that output has been estimated to originate from artisanal operations. Historically, artisanal sources have accounted for 10-20% of total output.

Artisanal mining is set to account for an even higher share of total cobalt supply coming out of the DRC, due to growth in demand seen across the sector.

“Partnerships need to be built in the cobalt supply chain, to ensure sustainable production,” Paluku, said. This involves putting artisanal mining in the DRC “on a legitimate footing,” he said, to “foster safety, entrepreneurship and the local economy.”

Conference attendees in conversation with Fastmarkets said simply banning the practice would be ineffective and would not result in tackling the key issues of artisanal operations – child labor and safety concerns – because implementation and policing would be hard to achieve.

“There is nothing wrong with a guy and a shovel, as long as he’s got helmet and boots, he’s safe, and the tunnel won’t collapse on him when he sneezes,” one delegate at the event said.

Register now for Lithium Supply and Battery Raw Materials 2022

Our upcoming Lithium Supply and Battery Raw Materials 2022 conference will also be covering key industry themes including managing ESG risks in the EV battery supply chain and building and tracking an environmentally responsible supply chain. Join us in Phoenix, on June 27-29, to find out more.

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