Pressures on already strained battery material supply chains are mounting, and not just due to geopolitical tensions and rising demand in the context of the green energy transition.
The U.S. Department of Labor has included lithium-ion batteries into its “List of Goods Produced by Child Labor or Forced Labor” – a list of 158 goods from 77 countries assumed to be produced in violation of internationals standards regarding child or forced labor.
As Mining.com reports, “[t]the addition of Li-ion batteries to the list is not due to direct evidence of labor abuses in the final production of this good, but because of the evidence of human exploitation in the mining of cobalt, a key input in the production of the technology.”
The Democratic Republic of Congo supplies more than 70% of the world’s cobalt, and labor practices in the country have long been scrutinized by the global community, including the United States.
The Department of Labor first placed cobalt, specifically referred to as “cobalt ore” on its List of Goods Produced by Child Labor or Forced Labor, and a year later, Congress included language in the Dodd-Frank financial law targeting the sale of conflict minerals from the DRC to address profits from commodities mined in Congo, but they stopped short of including cobalt, and only focused on gold, tin, tantalum and tungsten.
In 2016, Amnesty International released a report on child labor at the DRC’s so-called “artisanal” informal mine sites, increasing international scrutiny, but fast forward to 2022, and child labor persists in the DRC. Today, according to the Department of Labor report, “it is increasingly linked to the global supply chain of products made with cobalt, including lithium-ion batteries that power our smartphones, laptops, and electric cars,” leading the agency to dedicate a separate writeup to outlining “How Batteries Are Powered by Child Labor.”
Writes Valentina Ruiz Leotard for Mining.com:
“One of the main conclusions in the report is that as the world is shifting toward generating clean and renewable energy, it is important for companies to track the cobalt supply chain by acquiring knowledge of trade data, supplier information, transport routes, and processing steps.
Demanding such information and conducting their own research, will give companies ‘fewer excuses—such as the distance between raw materials and the finished product or supply chain complexity—to point to their lack of accountability in determining if a supply chain is tainted with child labor or forced labor,’ the reports states.”
The added scrutiny of labor practices for cobalt also adds increased urgency for U.S. policy and other stakeholders to build out a North American supply chain for the “battery criticals” lithium, cobalt, graphite, nickel and manganese — which already has received fresh impetus with the passage of the sourcing requirements contained in the statutory language on EV credits in the recently-passed Inflation Reduction Act.
Efforts are underway. To stick with cobalt — in Idaho, America’s first and only cobalt mine in decades opened earlier this month, and while it “will be a while before we can actually say that this is going to be a growth industry,” as Brad Martin, director of the RAND National Security Supply Chain Institute says, it is a “geopolitically significant” development for the United States and a small first step away from relying on materials sourced from a country using child labor practices.
However, in light of the multifaceted challenges relating to building out domestic mining and processing capacity, ranging from permitting issues to to politically-motivated NIMBYism, we still have a long way to go until the Department of Labor will be able to drop lithium-ion batteries from its watch list, and we have a fully built-out North American supply chain for the battery criticals.