We have previously blogged about the need for companies moving into clean energy to plan for carbon transition in a way that doesn’t harm marginalized communities, also called “just transition”. We discussed the concept primarily within the oil & gas and electric utility industries. Recent news highlighted some of the issues that can arise from not implementing a just transition model in cobalt mining related to the production of electric vehicle (EV) batteries. This is particularly relevant because demand for cobalt is expected to soar in coming years as electric cars take to roads in greater numbers.
The challenge is that cobalt is critical to the clean energy transition. The question is how can we minimize the social cost of mining the mineral.
Cobalt is an essential ingredient in batteries that power most EVs, and cobalt mining is big industry in the Democratic Republic of Congo (DRC). Last year, 70% of the world’s cobalt came from the DRC. The conditions faced by the cobalt mining workforce impact the local community where the workforce comes from.
The Guardian recently published an article about harsh and dangerous working conditions at one of the largest cobalt mines in the DRC and the need for companies to be more proactive in holding contractors and suppliers accountable for working conditions at mines. The article highlights mining contractors’ treatment of subcontractors. This is particularly alarming because subcontractors make up the majority of miners. Up to 70% of miners are brought in through subcontractors under the mine operator. Auto companies purchasing cobalt do not have business relationships or visibility to subcontractors, and may not even be aware subcontractors are used at mine sites.
“The use of subcontractors can leave workers in an extremely precarious position: Often hired on short-term contracts, or no contracts at all, with limited benefits, low pay and the threat of termination always hanging over them.”
Since cobalt isn’t a “conflict mineral” under US law, responsible sourcing initiatives and audits for cobalt refiners and their ore supply due diligence processes are not yet fully monitored across the industry. With many EV brands having made public commitments to responsible sourcing of minerals, we see companies increase their awareness of the social conflicts that their products and supply chains create.
The Takeaway
As we move towards a green future, impacts our efforts have on different groups of people must be considered. Companies that use cobalt should consider social impacts of mining, refining and other links in the supply chain as they work to create more environmentally preferable products. These companies must understand who is most impacted and at what point in the supply chain and product lifecycle. The goal is a green future that does not harm already marginalized communities.
