Never before in the history of the Democratic Republic of Congo (DRC) has the country’s cobalt resources been as attractive as they are right now. The metal is required to feed the electric vehicle (EV) boom, and the ‘fight’ to secure resources – transparently, sustainably and responsibly – to feed this growing demand is gaining momentum, writes LAURA CORNISH.
All eyes are on the DRC. The country already accounts for more than 63% of global cobalt production and the potential to increase this number is significant. Car manufacturers, metal traders and miners themselves all have an active interest in ensuring a long-term cobalt supply pipeline that will guarantee business sustainability and profitability.
Sustainability however is the theme that must be considered on a much larger scale. Today, mining companies across the globe are facing the reality of what building and operating sustainable operations truly means. For the DRC, and its future potential, this means dealing with the country’s biggest issues – human rights, poverty and inequality. The world simply won’t accept cobalt that compromises on any of these areas, which would be breaking the fundamental ESG (environment, social and governance) principles – principles that have quickly become part of the mining industry’s core business drivers.
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What does this mean in practice?
To a large extent, the DRC’s sustainable future depends on the use, management and formalisation of the artisanal and small-scale mining (ASM) sector – which currently accounts for about 20% of the country’s total cobalt supply, and it could account for more.
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“In light of the rising demand for cobalt, the DRC’s unparalleled cobalt resources and its reliance on the cobalt mining industry, solutions to mitigate the human rights risks in the Congolese supply chain need to be developed,” says Dorothée Baumann-Pauly, a professor at Geneva University’s School of Economics and Management and director of the Geneva Center for Business and Human Rights, the first human rights centre at a business school in Europe.
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Baumann-Pauly started to take an active interest in the DRC and its ASM cobalt sector back in 2019 and having visited the country produced a white paper in September, supported and copyrighted by the World Economic Forum, titled Making Mining Safe and Fair: Artisanal cobalt extraction in the Democratic Republic of the Congo.
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Prepared in collaboration with the Geneva Center for Business and Human Rights at Geneva University’s School of Economics and Management, and New York University’s Stern Center for Business and Human Rights, this paper is an independent expert assessment based on the author’s review of cobalt-producing mines in the DRC. The goal of the assessment was to identify actions that could eliminate violations of human rights and the use of child labour in sourcing cobalt in the DRC. These findings were intended to inform future dialogue on human rights and child labour issues associated with ASM in the DRC, including consultations being led by the Global Battery Alliance (a public-private collaboration platform of 70 organisations founded in 2017 to help establish a sustainable battery value chain).
The essence of Baumann-Pauly’s research findings pinpointed that the formalisation of ASM practices is an essential step to address the widespread human rights problems that are prevalent today at Congolese mining sites. The jobs and income created on formalised ASM sites can also help to reduce extreme poverty, which is a root cause of child labour.
Formalisation of ASMs can produce a number of social and economic benefits for local communities the author states, which may include:
- creating stable employment for adults, which will reduce the need for extra income from child labour and provide funds for school fees;
- ensuring safer working conditions and reducing the number of accidents through capacity- and skills-building training for miners;
- achieving higher productivity levels and generating higher income for miners as a result of better organised operations;
- promoting female employment and respect for women across a range of mining tasks;
- improving the health of miners and community members;
- ensuring effective and transparent representation of miners’ labour rights through the formation of cooperatives that are empowered to negotiate prices.
“Of equal importance, formalisation will also require the development of industry standards, performance metrics and an implementation system that includes routine monitoring and evaluation of mining operations to ensure compliance with these standards. The standards must respond to industry needs and address the very specific human rights and environmental impacts of each different operational site. Regulatory agencies, industry associations and multinational companies have all publicly recognised the validity of the ASM sector as an important revenue generator for impoverished communities,” Baumann-Pauly emphasises.
TWO KEY AREAS OF PROGRESS ALREADY ACHIEVED:
- Mutoshi leads the way
The Mutoshi formalisation project started in February 2018. Initiated by metals trader Trafigura. Chemaf, the mining operating company agreed to the project provided that Trafigura would support its implementation. Trafigura appointed Pact, a non-profit organisation, to help implement workplace standards and to work alongside SAEMAPE, the government’s ASM supervision body.
Pact consulted with five local mining cooperatives that the government proposed for the Mutoshi site. The local cooperatives are vital to the success of these formalisation projects. In this largely informal context, they provide a consolidated institutional contact point for the mining companies and help to support the implementation of agreed standards.
COMIAKOL, the cooperative working at Mutoshi, is registered with regional and national government agencies. Having operated in the region for more than 30 years, it has strong links to the local community and, together with Chemaf, it has developed its own management structures.
Collectively, the companies registered more than 5 000 miners on site, provided them with the necessary PPE and operating protocols and the site has since then performed exceptionally well.
Baumann-Pauly notes the existence of a second site intended to pilot test the formalisation of ASMs. “The Kasulo project started prior to Mutoshi in a concession controlled by CDM, a mining company and a subsidiary of Huayou Cobalt based in the DRC. While this site required some of the same procedures as Mutoshi, its implementation was different – for example, there is no enforced requirement for PPE and the site allows for tunnels up to 30m deep, which have much higher safety risks than open pits.”
“Mutoshi however is an excellent demonstration indicative that ASM formalisation is a realistic achievement for the greater DRC,” she continues.
- Entreprise Générale du Cobalt officially launched
On 31 March 2021, the DRC government, through its wholly owned mining company Gécamines, announced the formal launch of Entreprise Générale du Cobalt (EGC).
Established in November 2019, hopefully influenced in part by Bauman-Pauly’s report, EGC’s mandate is to support the commercialisation of responsibly sourced artisanal cobalt. Further to this, the company has also published its Responsible Sourcing Standards (https://www.egcobalt-rdc.com/app/uploads/2021/03/20210326-EGC-Responsible-Sourcing-Standards-English.pdf) to define the operational principles that EGC will require to support the establishment of safe and strictly controlled artisanal cobalt mining zones. The essence of the organisation and its standards supports Baumann-Pauly’s white paper objectives in full.
EGC will work alongside the DRC’s Agency for Regulation and Control of Strategic Mineral Substance Markets (ARECOMS) to formalise the ASM cobalt supply chain with a primary focus to preserve and protect respect for human rights, safety, and environmental standards. The EGC Standard has been developed by an EGC Technical Committee, which states that it has been built upon global best practice and is concurrent with DRC legislation.
As part of EGC’s formalisation strategy, it is responsible for purchasing all domestically produced ASM cobalt ore, prior to processing and/or transformation and marketing. “EGC’s production phase will cover the mining of cobalt ores by ASMs from artisanal mining areas, their transit to trading centres and their subsequent processing into cobalt hydroxide in local plants. This phase, which involves a large number of stakeholders, requires the execution of the contractual activities with the subcontractors in charge of operational support and the effective implementation of various activities on the sites,” outlines Jean-Dominique Takis, the MD of EGC.
For additional support for the marketing, EGC has entered into a trading agreement with Trafigura, who will support EGC and its partners for the development of controls and traceability associated with ASM cobalt production. Trafigura will further help in identifying industrial buyers for the cobalt sold by EGC. The partnership also includes financing for the creation of strictly controlled ASM mining zones, the financing of ore excavated by the artisanal miners and additional costs related to ensuring the transparent and traceable delivery of cobalt hydroxide.
Through its strong partnerships with several government institutions in more than 40 countries, PACT will also support continuous improvement against the EGC Responsible Sourcing Standard.
EGC is currently making arrangements for the development of its first site at Kasulo which Dominique-Takis notes has been compromised in terms of existing standards. “We will be investing in the site to understand its geology and implement the correct mining approach for our ASM. With this work complete, we hope to start cobalt hydroxide production in the coming months.”
The MD further notes that EGC has already identified its second site – the Tondo region – which is situated about 2 800 km north of Kinshasa.
Baumann-Pauly’s report was produced independently, and without any bias – its objective is to inform and provide guidance on how to reconcile sustainability and human rights without compromising on profits. “The journey to secure clean energy must be equally as clean as the end destination and this is my hope and ultimate objective and I hope that the EGC’s standards will fulfil this requirement without compromise.”
There are many stakeholders involved and a number of institutions and associations that were seeking clarity on this topic, including the Global Battery Alliance and its Cobalt Action Partnership, which is an initiative governed by an independent steering committee with balanced representation from private sector, civil society, and governments. “It is important to establish common responsible sourcing standards to create a level playing field for all companies that are sourcing cobalt from the DRC,” Baumann-Pauly notes. Considering the DRC ministry is a member of the partnership, it seems positive. James Nicholson, head of corporate responsibility at Trafigura notes that the EGC standards are “indeed complementary to the Global Battery Alliance.”
“EGC’s mission is to ensure that artisanal and small-scale cobalt production is undertaken in accordance with defined standards to increase the economic attractiveness of the DRC internationally, and to ensure that Congolese citizens benefit from the wealth of their environment. The goal of these standards is to ensure decent working conditions and to eliminate the major social, ethical, and environmental risks that have historically affected artisanal cobalt production in the DRC,” notes His Excellency Mr Bene M’Poko, ambassador of the DRC to South Africa.