How electric cars and green energy depend on artisanal cobalt mines in the Congo

By ITC.UA 

ITC.UA

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The Economist decided to remind the modern world, which dreams of a transition to green energy, of how much this transition depends on artisanal mines for the extraction of cobalt and other minerals. We provide an adapted translationof this material.

The dust-covered men carrying sacks of stones into a commercial warehouse near Kolwezi in the south-east of the Democratic Republic of Congo (DRC) at first glance bear little resemblance to the housewives in rich countries who throw parties to sell Avon cream. However, in both cases, the more you sell, the better the bonuses. In a warehouse under a dilapidated roof, prices for minerals in ore are written on handwritten posters. Hardworking miners who meet production targets receive great bonuses: a bag of cornmeal, a smartphone or a TV.

The main prize that can be extracted from the stone is cobalt. It hasn't been much appreciated for decades, but it's now the backbone of green energy. It is used as a component in batteries for phones, laptops and electric vehicles, which are in high demand today. The authors of an IMF report last year predicted that cobalt consumption could rise sixfold by 2050 as the world tries to curb global warming. However, they also note that cobalt supply may be a bottleneck in the transition to cleaner energy.

To understand why, consider the Congo Copper Belt, where 60-70% of the world's cobalt is mined (see map). Most of Congo's cobalt is a by-product of large copper mines that have been unable to ramp up production quickly and are reluctant to do so until copper prices rise. Another significant source in the Congo is so-called “artisanal” mining. Small-scale miners produce about 15% of Congo's cobalt. This is more than the entire production of Russia, the world's second largest producer (see chart).

Artisanal miners are critical to global supply chains. They manually extract ore of a higher grade than that obtained from large mechanized mines. They can also choose whether to mine cobalt or copper, depending on prices. But these people face enormous barriers to their ability to work and benefit from the world's clean energy transition.

The main problem is the danger and pollution of small mines. International non-governmental organizations report horrific cases of miners dying in tunnel collapses or underground fires. Even worse, they discovered that even children as young as seven were being recruited to work in the mines. Following a 2016 Amnesty International report into artisanal mining practices, some mobile phone and car manufacturers pledged to avoid using artisanal cobalt in batteries and to improve safety in small mines. But in 6 years the situation has not improved.

One of the reasons why the situation for small-scale miners has not improved is that they are being pushed to the margins of the industry. In Congo, artisanal mining is limited to specific areas. In practice, this also happens in the huge industrial mines in Kolwezi. Although some areas have been mined for decades, miners are not protected. In 2019, the army evicted 5,000-8,000 miners from China Molybdenum's Tenke Fungurume mine. However, people returned to the mine, which is about 100 km from Kolwezi, even despite the risk of violence.

“The guards chase us, beat us, break our bowls,” says Generosa Yandaya, who washes stones to supply her orphaned grandchildren. “I want them to go to school. The problem is that there is no money and this job is the only job.”

An estimated 140,000 – 200,000 people work as artisanal miners in the Copper Belt. According to the German Federal Institute of Geosciences and Natural Resources (BGR), the majority earn less than $10 a day. But nationwide, 73% earn less than $1.90 a day. Children work in approximately 25-30% of mines, according to recent BGR and OECD reports. Kitenge Mame, a teenager from Fungurume, says she is going to the quarry “because I don’t want to be a beggar”. Mining supports the economy: motorcycle taxi drivers transport three miners with sacks at a time, women in dirt markets sell "I heart DRC" bags to collect stones; traders offer football boots instead of safety shoes. One study suggests that 60% of households in the region depend on artisanal mining.

This is a risky job. There is a law limiting the depth of the pit to 30 meters, but it is often not followed. Deadly collapses are common. “There are no statistics, but many, many are dying,” says Donat Kambola Lenge, a human rights lawyer in Kolweze. Pastor George Ngome says he presides over many funerals of miners who were found without identification documents.

“These are the ones who come from other parts of the country, and their families will never know what happened to the person.”

Some miners work in special groups, but by law they must belong to cooperatives. These may be truly joint ventures; they are often little more than labor gangs controlled by businessmen. The OECP report notes that the government's register of co-op leaders includes politicians, their families and regulatory officials. Earlier this year, the provincial government appointed the head of one of its largest cooperatives as the new minister of mining.

By law, trading warehouses that buy ore must be owned by Congolese. But they are usually financed by foreigners, primarily the Chinese. These warehouses are informally called La Maison Chinoise. One day, the politician's aides confused the correspondent's journalistic interest with a commercial one and asked whether The Economist wanted to participate in this business, remarking: “You too can exploit our ore.”

However, it is mainly miners who are exploited. Some claim that commercial scales and spectrometers (used to measure cobalt concentrations) show incorrect values. They complain about the lack of market power and the dominance of Chinese buyers. They complain about a series of unofficial "taxes" imposed by government agencies, bosses, police and security guards who can earn $250 in bribes a night. In 90 of the 116 warehouses that BGR examined, the security service receives its “tribute.”

“We have laws, but there is no respect for them,” says Mr. Lenge. “The government is simply corrupt.”

Artisanal cobalt is trucked from commercial warehouses to factories, where it can be mixed with ore from large mines.

“Despite the efforts of some companies to portray industrial (large-scale) mining and artisanal mining as completely different,” says the Natural Resource Management Institute, a New York-based NGO, “the line between the two is blurred.”

International companies involved in the trading, refining and use of cobalt are responding to the challenges of artisanal mining in three ways. First, they are trying to understand what is happening in their supply chains. Apple, for example, keeps strict records of all its cobalt processing facilities. Many processing firms consult with RCS Global, which has staff constantly working at ten artisanal mines in the Copper Belt, to check what is happening there. Tesla and Volvo are deploying blockchain-based systems to trace the origin of the cobalt they use.

Second, companies are trying to use less cobalt from Congo, especially artisanal cobalt. BMW says it buys raw materials exclusively from Australia and Morocco. Elon Musk's company also produces batteries that require much less cobalt (or no cobalt at all). Huayou Cobalt, one of the largest refineries in the industry, said in 2020 that it would stop purchasing artisanal cobalt, although it is unclear whether that statement is still in effect (its representatives did not respond to requests for comment).

Third, firms sponsor initiatives aimed at improving the lives of miners. The Fair Cobalt Alliance, whose members include Glencore, Tesla and Google, is helping to improve conditions in artisanal mines. He is renovating schools so that children have a place to study. The Responsible Cobalt Initiative, an association of German automakers and industrial giants, offers safety training.

This was not the case a few years ago. But critics say these actions are not enough.

“The current situation is very bad,” says Benjamin Katz of the OECD. “There is artisanal cobalt in supply chains, even if it is not officially recognized. And very little is being done to improve conditions.” A consultant to major firms adds: "There are a group of recycling companies that undergo annual audits, pretend to be virtuous and go back to selling phones and cars."

In 2019, the Congolese government proposed its own solution. Gécamines, the state-owned miner, said its subsidiary Entreprise Générale du Cobalt (EGC) would have a monopoly on the purchase of artisanal cobalt.

“We are going to eliminate child labor,” said Albert Huma, then head of Gécamines. “Maybe not today, but tomorrow Congo will be the equivalent of OPEC [for cobalt].”

The plan is for the ore purchased by EGC to be exported to the global market through commodity trader Trafigura. It will pay for measures that will help make mines safer and more productive. The scheme is based on a pilot project that ran from 2018 to 2020 and which Trafigura and PACT, the US NGO, say improved both conditions and productivity. But critics question whether the model can be scaled up.

There are many moral reasons to reform artisanal mines, but market incentives are not enough.

“There is a double standard,” says Michael Dodin of PACT. "The approach is: 'We'll help you, but we don't want to buy from you.'

The companies, for their part, argue that Congo needs to clarify the legal status of artisanal mines and that rich country governments need to understand the situation regarding responsible cobalt mining. Without this, Congo may again miss the chance to use its natural resources to improve the lot of its people.

Source: The Economist

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