Tesla’s reliance on cobalt for its lithium-ion batteries may be coming to an end. The company’s R&D for the Model 3 has lessened dependence on a resource that comes from a country where children work in an industry euphemistically titled “artisanal mining.”
Car and tech companies like Tesla (TSLA) have long used cobalt inside of their lithium-ion rechargeable batteries, but much of the cobalt used in these batteries comes from the Democratic Republic of Congo (DRC), where children work in mines and worker safety abuses are rampant. Tesla is changing the way it manufactures its high-density battery cells, leading the way — again — among tech companies and other battery producers globally.
How are Electric Vehicles Linked to Cobalt and Human Rights Abuses?
More than 1/2 the world’s cobalt found in EV and cell phone batteries comes from the DRC, where around 20% is extracted by hand in what is known as “artisanal mining.” Don’t you love that term? It sounds like mining is done by meticulously trained craftspeople who closely inspect and monitor cobalt for high quality, doesn’t it? It is reminiscent of craft beer makers, niche cheese producers, hand-pressed olive oil farmers, or home bread bakers — those products that are artfully and lovingly made by hand by small producers and often family-run companies.
Except “artisanal mining” is nothing like that.
According to Amnesty International, Congolese cobalt miners in these artisanal mines work in dangerous, narrow, underground tunnels handling hazardous minerals without basic safety or protective equipment. Children as young as 7 work alongside adults for up to 12 hours a day, sorting minerals and carrying heavy loads in exchange for the equivalent of $1.00–2.00. DRC governmental authorities ignore children’s and worker safety in general, and traders and companies that purchase these ores turn a proverbial blind eye to the conditions in which the cobalt has been extracted.
Rising demand has led cobalt prices to quadruple in the past two years, and that helped boost production at these “artisanal mines” in the DRC by 18% in 2017, according to Andries Gerbens at Darton Commodities. Benchmark Mineral Intelligence estimates that the use of cobalt in lithium-ion batteries will triple between now and 2026. “Whilst efforts are being made to reduce cobalt dependency, the order of magnitude of EV growth sales will far outweigh this,” Benchmark confirmed. Cobalt has been trading near decade highs above $90,000 a ton (note: the graph above that ends in 2017 doesn’t even have $90,000/ton on the chart).
Even though international standards are clear about health and safety minimum requirements for cobalt workers, cobalt “artisanal mining” is linked to the worst forms of child labor and other serious human rights abuses. And this tainted cobalt, which has been entering the global supply chains of battery manufacturers, has been linked to some of the world’s largest automotive and electronics brands, including Tesla — until now.
How Tesla is Leading the Way in Reducing Cobalt in Its Batteries
Tesla has long been a proponent of nickel-cobalt-aluminum (NCA) batteries developed by Panasonic in Japan, which goes against the propensity of a nickel-cobalt-manganese (NCM)-focused EV industry, but that still meant Tesla’s first Model S consumed on average 11 kg of cobalt per vehicle. Today, using a fixed pack size for a more accurate comparison, Tesla’s Model 3 would consume 4.5 kg per vehicle.
From the Tesla 2018 Q1 newsletter:
“Cells used in Model 3 are the highest energy density cells used in any electric vehicle. We have achieved this by significantly reducing cobalt content per battery pack while increasing nickel content and still maintaining superior thermal stability. The cobalt content of our Nickel-Cobalt-Aluminum cathode chemistry is already lower than next generation cathodes that will be made other cell producers with a Nickel-Manganese-Cobalt ratio of 8:1:1. As a result, even with its battery, the gross weight of Model 3 is on par with its gasoline-powered counterparts.”
Benchmark forecasts that NCM batteries will make up 70% of the total global lithium-ion battery market by 2026. NCA has been far less widely adopted and the main proponent remains Tesla. CleanTechnica this year wrote a couple of pieces, which included exclusive commentary from industry experts, about the shift to NMC 811 and Tesla’s low-cobalt approach.
Tesla has worked on reducing cobalt usage “for literally several years now, and this has been extremely helpful in the overall cost per kilowatt hour, especially with recent commodity price movements,” JB Straubel, Tesla’s chief technology officer (CTO), said on the call that accompanied the Q1 2018 shareholders’ letter.
Mercedes-Benz owner Daimler said on Wednesday — coinciding with the Tesla analysts’ call — it had launched a human rights audit system to make sure its cobalt is not from child labor and associated “artisanal mining” in the DRC.
What is Artisanal Mining?
“Artisanal mining” often has the following key features:
- Minimal machinery or technology used;
- Reliance on simple techniques and physical labor;
- Operates without legal mining titles such as a concession, claim, or a valid contract with the title holder;
- Low productivity due to very small or marginal plots;
- Typically limited to surface or alluvial mining;
- Uses inefficient techniques and is improved by repetitive scavenging and reprocessing;
- Lack of safety measures, health care, or environmental protections;
- May be practised seasonally to supplement other transient incomes or temporarily in response to high commodity prices; and,
- Economic insecurity.
The Congolese people who engage in this grueling and hazardous work do so because they have few other options to escape poverty. Cutting out cobalt from the DRC will not happen, as so how much of the world’s cobalt is found there. To do so would also make miners’ lives even more precarious.
What Needs to Be Done to Improve Cobalt Miners’ Work Conditions?
Because the DRC government has made only limited progress in its public commitments to tackle child labor and other abuses, others must advocate to make visible and improve the health and safety conditions of Congolese miners and ensure that international laws about mining are enforced.
Companies can verify supply chain information they receive. When abuses are uncovered, they can take adequate corrective actions to address past harms. Companies must insist on complete and verifiable supply chain information and a system of third-party verification. To date, too few brand-name manufacturers of electric vehicles or consumer electronics have looked closely enough at their suppliers. BMW, Volkswagen, and Daimler have acknowledged how difficult it is to verify the source. If this is the case, then companies can buy directly from miners, cutting out middle contacts.
BMW said it makes “every effort to ensure the highest possible standards in the labor practices of our suppliers” but admitted it could do more. Now it’s considering an option to avoid operations that exploit children. “A further step could be to purchase directly from miners, which is an option we are looking into,” BMW told CNN. Apple (AAPL), which stopped sourcing from artisanal mines last year, may also be in talks to buy cobalt directly from regulated mines in the DRC.
Suppliers, including smelters and refiners, need to disclose a complete picture of which mines, traders, and transport routes are supplying them with cobalt. They should support full disclosure legislation that requires them to do so.
Supporting agencies can advocate for miners to receive a wage commensurate with the rising price of cobalt, which has increased exponentially in the last few years. Because miners lack the leverage to demand better pay and working conditions, supporting agencies can monitor traders and processors to provide checks-and-balances. In this way, low-cost hand-dug cobalt will not be hidden within motivations to quickly boost profit margins. Supporting agencies should also petition the DRC government to take steps to address the economic, educational, psychological, and physical health needs of its children.
All constituents can push for DRC governmental reforms and regulations so that adult miners are paid fairly for their labor, work conditions in artisanal mines are made safer conditions through providing workers with all necessary safety equipment, and workers receive adequate technical support and training.
Alternative Solutions for DRC’s Employment Crisis
If the DRC were to lose a good deal of its cobalt exporting, exit options for artisanal miners must also be sought. Smallholder rural agriculture is often cited as an appropriate exit strategy, but is it actually suitable?
In an area where the impoverished have limited access to land rights, where there is little to no economic foundation for leases, where inadequate security threatens families daily, and where local people have few agricultural skills, it seems as if small farming may not be the best alternative to artisanal mining. Perhaps trade and small businesses that build on present artisanal miners’ skills, knowledge, and social networks within a broader rural development framework make more sense.
Of course, this would require advocacy from constituents toward new socio‐political rural development strategies. In the meantime, we at CleanTechnica ask you to rise up and play an important role by demanding that brands be more accountable and transparent. You can push big brands to produce ethical batteries, where they can prove how human rights have been respected.