In Quest for Battery Metals, U.S. Takes On Cobalt’s ‘Inconvenient Truth’

To do so, it is homing in on cobalt from the Democratic Republic of Congo’s informal mining sector, where miners, sometimes including children, often work with no safety equipment in dangerous, hand-dug mines. Congo supplies around 70% of the world’s cobalt, a key metal in the lithium-ion batteries used in EVs, with about a third of that coming from these so-called artisanal miners.

The U.S. Agency for International Development said earlier this year that it would issue grants to companies that source critical minerals from Congo and were willing to support artisanal miners. Meanwhile, the Labor Department has been working with officials in the country to help improve working conditions and oversight.

The focus on artisanal mines, long shunned by the West, comes as governments and companies increase efforts to secure greater supplies of battery metals—an area China dominates. Beijing last month set export restrictions on two minerals the U.S. says are critical to the production of semiconductors, highlighting the risk of relying on Chinese supplies.

Chinese companies have a tight grip on Congo’s cobalt mining industry, refining three-quarters of the world’s cobalt supply and producing about 70% of the world’s lithium-ion batteries.

“We are building a pipeline of Congolese investment opportunities to attract more U.S. investment into the DRC,” said John Dunlop, mission director for Congo at the U.S. Agency for International Development, at an industry conference in June. The agency is already helping to foster supply chains for artisanally mined gold, linking cooperatives with buyers, refiners and jewelers in the U.S. and Europe, he said.

USAID has launched a $20 million program to give grants ranging from $100,000 to $4 million to U.S. companies and other mining entities interested in sourcing critical minerals from Congo if they agree to support the integration of local companies and artisanal miners into the global supply chain.

Separately, the Labor Department has pledged $3 million to implement, strengthen and support labor standards in Congo, which plans to hire 2,000 inspectors and controllers. The Labor Department also plans to provide protective equipment to miners and work to ensure they get fairly paid.

“It’s really in our interest, both our financial interest and also our interest as human beings, to make sure that the DRC is in a position where they can begin to ensure that the cobalt mining is done in a way which is consistent with international labor standards,” said Thea Lee, deputy undersecretary at the Labor Department.

Unlike metals from major mines operated by the likes of Glencore, cobalt from artisanal mines isn’t contracted to any particular company. Instead, informal miners typically sell their ore to local traders who in turn sell it on to exporting companies and refineries.

Workers wash ore in the artisanal copper-cobalt mine of Kamilombe in southeastern Democratic Republic of Congo. PHOTO: EMMET LIVINGSTONE/AGENCE FRANCE-PRESSE/GETTY IMAGES

That metal is often mixed with other supplies, meaning it makes its way into the broader global supply chain, and ultimately some of the products made by major Western companies. As a result, some Western companies have faced criticism from consumers disturbed by the link to workers toiling in dangerous conditions in one of the planet’s most impoverished countries.

Hundreds of thousands of people work in Congo’s artisanal-mining sector, far outnumbering jobs at established mines, where the use of heavy machinery means fewer workers are needed.

Earlier this year, Congo entered a nonbinding agreement with the U.S. and Zambia to develop supply chains for electric-vehicle batteries as part of a broader industrial development plan.

“The U.S. promised investors [that] they are going to bring energy expertise and knowledge,” said Antoinette N’Samba Kalambayi, Congo’s mining minister.

Commodity traders say that U.S. government intervention could have a major impact on the informal mining sector. If large companies start buying cobalt from artisanal miners that have met certain environmental and labor conditions, it could be transformative for both the U.S. supply chain and the workers hauling up the mineral by hand, they say.

Still, questions remain as to whether Western auto manufacturers and technology giants—some of cobalt’s heaviest users—will be willing.

“Certainly there hasn’t been a groundswell of American investment,” a USAID minerals adviser said, citing ongoing concerns about security and governance in the Congolese mining sector. “We want to try and connect the dots and show investors how they could manage the risks,” the adviser added.

Processing facilities at mine for copper and cobalt which is a key metal in the lithium-ion batteries used in electric vehicles. PHOTO: EMMET LIVINGSTONE/AGENCE FRANCE-PRESSE/GETTY IMAGES

Previous efforts to formalize Congo’s artisanal cobalt sector have failed to take off.

Entreprise Générale du Cobalt, or EGC, a subsidiary of Congo’s state-owned mining company, was established in 2019 with plans to purchase, process and sell cobalt produced by the country’s artisanal miners.

Swiss commodity trader Trafigura signed an agreement to purchase metal from EGC in 2020 but has yet to purchase a single pound of cobalt from the project.

Trafigura remains committed to its agreement with EGC and “the pressing need to kick-start the large-scale formalization of the [artisanal] cobalt sector,” said James Nicholson, the company’s head of social responsibility. “We encourage others to follow our approach,” he added.

EGC didn’t respond to a request for comment.

Artisanal cobalt is an “inconvenient truth,” according to Dorothée Baumann-Pauly, director of the Geneva Center for Business and Human Rights, who said she is supportive of efforts to improve the lot of informal miners.

It is nearly impossible to separate artisanally mined cobalt from the larger supply of industrially mined cobalt, she said. “Companies need to fully acknowledge that this is happening in their supply chain.”