Trafigura, a Swiss-based commodity trading firm, has signed a deal with the government of the Democratic Republic of Congo to improve conditions at informal mining sites in return for supplies of cobalt, a metal used in smartphones, laptops and electric car batteries.
Hand mined cobalt, DRC
The deal was signed with Entreprise Générale du Cobalt (EGC), a state-owned mining company, and the amount of money that would be invested was not disclosed.
In a press release, the Geneva-based firm said it would "fund the creation of strictly controlled artisanal mining zones, the installation of ore purchasing stations and costs related to the transparent and traceable delivery of cobalt."
These artisanal mining zones would be areas where informal miners could work with better safety conditions.
The Katanga region, in the country's south, is notorious for its "artisanal mining sites", where cobalt and rare earth minerals are dug by hand, often with no safety precautions, and sometimes by small children.
In December 2019, US-based human rights non-profit group International Rights Advocates filed a lawsuit in Washington DC against tech giants Tesla, Apple, Dell, Microsoft and Google parent Alphabet Inc., accusing them of being complicit in the death of Congolese children forced to work in cobalt mines owned by Glencore and Huayou. The case is still ongoing.
Earlier this year, Tesla joined the Fair Cobalt Alliance, an industry-backed group that is looking to improve conditions at artisanal sites like those in the DRC.
Head of corporate responsibility at Trafigura, James Nicholson, was quoted by FT
as saying that there had been a "sea-change" in the attitude of battery companies and carmakers towards the DRC - which has around 70% of the world's cobalt supply - and that many companies would be interested in buying cobalt and other metals and minerals from the country, provided labour problems could be resolved.
“For too long there has been criticism of the cobalt industry and this helps us address a fundamental weakness,” Nicholson added.
Many companies are, however, still reluctant to source their supplies of cobalt from the DRC's artisanal sector. Just last week, Volkswagen said that they would not accept cobalt from the informal mines in the country.
In February, the DRC government said that EGC would be granted the power to buy all artisanal cobalt in the country, as part of a push to formalise the sector and push up market prices of the metal for local miners.
The majority of the hand-mined cobalt is sold to Chinese traders at markets in and around the city of Kolwezi.
"For our country to benefit from the intrinsic value of cobalt, currently boosted by the development of carbon-free energies, it was essential that measures be taken to support the formalisation of this industry," said Jean-Dominique Takis Kumbo, EGC’s Managing Director.
"In fact, by cleaning-up this sector, which has been subject to recurring illegality and fraud for several years, and of which our artisanal miners are the first victims, society stands to benefit as a whole," he added.
Trafigura’s Executive Chairman and CEO, Jeremy Weir, commented: “Cobalt has a vital role to play in the world’s energy transition and electrification. Artisanal mining or ‘ASM’ provides an important livelihood in the DRC.
"Ultimately, the legitimacy of efforts to formalise and bring controls to the sector will depend on broad-based consultation and assurance that OECD standards will be upheld. We will continue to engage and collaborate with stakeholders to be part of the solution to supply cobalt responsibly.”
Trafigura opened its first controlled zone for informal mining at the Mutoshi copper mine, also in Katanga with a local mining company. $450 million was raised for the facility.
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