Global demand for cobalt, a key component of lithium-ion batteries used in consumer electronics and electric vehicles, is expected to grow fourfold by 2030.
More than 70% of the global production of cobalt takes place in the Democratic Republic of the Congo (DRC), of which 15–30% comes from so-called artisanal and small-scale mines where independent miners use their own resources to extract the mineral.
Sourcing cobalt from the DRC is linked to major human rights risks, which have been widely documented. The prevalence of artisanal and small-scale mining (ASM) in the cobalt supply chain creates challenges for establishing responsible sourcing practices.
The world economic forum recently released a white paper titled making mining safe and fair that assesses recent company approaches to formalizing ASM. Formalization of an informal industry is generally defined as the development of standards in line with basic human rights principles and environmental standards. In the case of ASM, these standards include basic infrastructure, health and safety measures, and monitoring to assess compliance with these standards.
The insights from three ASM formalization projects stem from field research conducted in Kolwezi, DRC, in September 2019, with insights largely drawn from the Mutoshi site because it is the only running ASM cobalt formalization project. The main objective of analysing these formalization projects is not to assess the current effectiveness of the pilots but to inform the factors that would need to be put in place to make ASM formalization projects scalable and replicable, based on the limited sample of existing formalization projects.
The field research shows that the formalization of ASM is necessary. Fully examining lessons and best practices to inform a comprehensive assessment of formalization of ASM will require consultation with all stakeholders, particularly those working in the DRC’s mining communities. However, the research does not show that the model of ASM on a large-scale industrial mining (LSM) concession is the best or only model for formalization. If it is implemented well, formalization can address key human rights concerns relating to cobalt mining, including child labour and health and safety issues. Yet today there are no common standards to formalize ASM, which hampers the establishment of responsible ASM in the cobalt market and the likelihood of ASM cobalt from responsible sources entering the formal supply chain.
ASM production constitutes 15–30% of total cobalt production in the DRC. Human rights risks, including child labour, are greatly elevated in ASM operations. Yet ASM is often the sole form of livelihood for those in destitute local communities. Any efforts to develop responsible sourcing practices need to focus primarily on ASM operations, both on ASM sites and ASM activities that take place within large-scale industrial mining (LSM) concessions. Companies sourcing cobalt from the DRC must implement sustainable sourcing strategies that include the establishment of clear labour standards in line with the DRC’s mining code and a system to implement those standards. This formalization of ASM sites on LSM concessions will require a range of actions including: 1) fencing off mining sites with access controls; 2) introducing safety measures, as well as the mechanical preparation of open pits that do not require deep pits or tunnel constructions; and 3) involving one or multiple independent cooperatives of artisanal miners to oversee the implementation of safety standards and negotiations with the mining company.
Social economic benefits
The formalization 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 formalized ASM sites can also help reduce extreme poverty, which is a root cause of child labour. The formalization of ASM will produce a number of social and economic benefits for local communities. These may include: 1) creating stable employment for adults, which will reduce the need for extra income from child labour and provide funds for school fees 2) ensuring safer working conditions and reducing the number of accidents through capacity- and skills-building training for miners; 3) achieving higher productivity levels and generating higher income for miners as a result of better organized operations; 4) promoting female employment and respect for women across a range of mining tasks, including the best remunerated ones; 5) improving the health of miners and community members; 6) creating new business opportunities in response to higher output levels and higher demand for goods and services; 7) ensuring effective and transparent representation of miners’ labour rights through the formation of cooperatives that are empowered to negotiate prices.
Monitoring and evaluation
Formalization 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 recognized the validity of the ASM sector as an important revenue generator for impoverished communities. Also, the DRC government has developed a range of legal instruments, regulations and guidance on ASM formalization. A common standard developed through a multistakeholder process needs to reflect and reinforce DRC law and help to build capacity for its enforcement.
Addressing root causes
In addition to the formalization of ASM sites, it is important to understand the multidimensional root causes of persistent human rights issues in the DRC’s mining context. Addressing underlying socioeconomic causes related to extreme poverty, food insecurity, lack of social protection systems and an underinvestment in affordable education and health services requires specific attention. In addition to building basic infrastructure (schools and day-care facilities), social development programmes must build capacity in the community by including programmes that enhance and diversify the miners’ economic opportunities such as apprenticeships, financial literacy courses and microloan programmes. Comprehensive remediation strategies need to be developed in collaboration with the DRC government and with supplemental funding from the international community.
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More about this white paper on www.weforum.org