Cobalt is one of the most important ingredients in three of the five primary lithium-ion battery formulas as its unique properties allow manufacturers to safely increase the energy density of a battery from around 100-watt hours per kilogram to 250Wh/kg. Democratic Republic of Congo (DRC) is currently one of the leading suppliers of cobalt across the world. DRC is currently suffering from intense poverty due to which the poor local residents (Congolese) of DRC have moved to cobalt-rich areas to secure an income.
Recently, few undercover reporters managed to take a video footage of mining operations in DRC which uncovered many serious issues like child labour and lack of basic safety standards in mining regions. Men, Women, and Children have been seen digging these mines and due to the lack of safety regulations, there has been several casualties.Â Â [optin-monster-shortcode id="wxhmli4jjedneglg1trq"]
According to Mr. Michael Schwarz who is currently the managing director of Northern Cobalt (ASX: N27), the problem DRC is facing is very complex, as the local residents are struggling to earn money and they need that income from mining but the DRC authorities have been unsuccessful in putting proper protocols around the cobalt mining areas. The demand for the cobalt has been increasing mainly due to the increasing consumption of electric vehicles around the world. Even though, the prices of cobalt have increased exponentially over the last two years, companies like Tesla continues to buy this metal.
In order to reduce the pressure on the cobalt supplies, efforts have been made to manufacture batteries without cobalt, but it will take at least another decade for the alternative batteries to make any real impact. Although, at this stage it is not possible for the companies to eliminate the cobalt batteries, few companies like Tesla have given assurance that they are planning to reduce the use of cobalt in their lithium-ion battery formulas.
Big Cobalt consuming companies like Samsung, Panasonic, Apple are facing great pressure to prove that their products are not having any unethical metal in it. Leading cobalt producers in the DRC have given assurance that their operations comply with human rights regulations however it is possible that the unethically mined cobalt can be mixed in with ethically sourced cobalt during the refining process. Mr. Michael Schwarz also suggested that obtaining cobalt directly from regulated jurisdictions like Australia can solve part of the problem by reducing the demand from DRC. But, it will not be a great news for the local residents of DRC who are completely dependent on cobalt mining to earn their living. He also pointed out that building transparency in the supply chain is very critical. The companies using cobalt needs to be careful about the origins of the metals in order to avoid using any unethical material in their products.
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