The Economist decided to remind the modern world, which dreams of a transition to green energy, how much this transition depends on artisanal mines for the extraction of cobalt and other minerals. We provide an adapted translation of this material .
Dust-covered men carrying sacks of stones to a warehouse near Kolwezi in the southeast of the Democratic Republic of the Congo (DRC) at first glance have little in common with housewives in wealthy countries who throw parties to sell Avon cream. However, in both cases, the more you sell, the better the bonuses. In a warehouse under a dilapidated roof, handwritten posters list prices for minerals in ore. Hard-working miners who complete the production plan receive great bonuses: a bag of cornmeal, a smartphone or a TV.
The main prize that can be extracted from the stone is cobalt. It was not particularly appreciated for decades, but now it is the basis of green energy. It is used as a battery component for phones, laptops, and electric vehicles, which are now in high demand. The authors of last year’s IMF report predicted that cobalt consumption could increase sixfold by 2050 as the world tries to curb global warming. However, they also note that the supply of cobalt could be a bottleneck in the transition to cleaner energy.
To understand why, consider the Congo Copper Belt, where 60-70% of the world’s cobalt is mined (see map). Much of the cobalt in the Congo is a by-product of large copper mines that cannot and will not rapidly ramp up production until copper prices rise. Another significant source in the Congo is the so-called “artisanal” mining. Small miners produce about 15% of the cobalt in the Congo. This is more than the entire production of Russia, the second largest producer in the world (see graph).
Artisanal miners are critical to global supply chains. They manually extract ore of a higher grade than that obtained in large mechanized mines. They can also choose what to mine – cobalt or copper, depending on the prices. But these people face formidable obstacles preventing them from working and getting the possible benefits from the world’s transition to clean energy sources.
The main problem is the danger and pollution of small mines. International non-governmental organizations report horrific deaths of miners during tunnel collapses or during underground fires. Worse yet, they found that even seven-year-olds were recruited to work in the mines. Following Amnesty International’s 2016 report on how the artisanal mines operate, some mobile phone and car manufacturers have pledged not to use artisanal cobalt for batteries and to improve safety in small mines. But for 6 years the situation has not improved.
One of the reasons why the situation of small-scale miners has not improved is that they are being pushed to the margins of the industry. In the Congo, artisanal mining is limited to special places. In practice, this also happens in the huge industrial mines in Kolwezi. Although some sites have been developed for decades, the miners are not protected in any way. In 2019, the army evicted 5,000-8,000 miners from China Molybdenum’s Tenke Fungurume mine. However, people have returned to the mine, which is about 100 km from Kolwezi, despite the risk of violence.
“The guards are chasing us, beating us, breaking our bowls,” says Generosa Yandaya, who washes rocks to supply orphaned grandchildren. “I want them to go to school. The problem is that there is no money and this job is the only job.”
Approximately 140,000 – 200,000 people work as artisanal miners in the Copper Belt. Most earn less than $10 a day, according to the German Federal Institute for Geosciences and Natural Resources (BGR). But nationwide, 73% earn less than $1.90 a day. Children work in about 25-30% of mines, according to the latest BGR and OECD reports. Kitenge Mame, a teenager from Fungurume, says she goes into the quarry “because I don’t want to be a beggar.” Mining keeps the economy going: motorcycle taxi drivers transport three miners with sacks at once, women in muddy markets sell “I heart DRC” sacks to collect stones; merchants offer football boots instead of safety shoes. One study suggests that 60% of households in the region depend on artisanal mining.
This is risky work. There is a law limiting the depth of the pit to 30 meters, but it is often not enforced. Deadly collapses are common. “There are no statistics, but many, many are dying ,” says Donat Kambola Lenghe, a human rights lawyer in Kolwez. Pastor George Ngome says he presides over many funerals for miners who were found to be missing identification papers.
“These are those who come from other regions of the country, and their families will never know what happened to the person.”
Some miners work in special groups, but by law they must belong to cooperatives. These may indeed be joint ventures; often they are little more than labor gangs controlled by businessmen. The OECP report notes that the state register of cooperative leaders includes politicians, their families and officials in regulatory bodies. Earlier this year, the provincial government appointed the head of one of the largest cooperatives as the new minister of mining.
By law, warehouses that buy ore must be owned by the Congolese. But they are usually financed by foreigners, primarily the Chinese. These warehouses are informally called La Maison Chinoise. Once, the politician’s aides confused the correspondent’s journalistic interest with a commercial one and asked if The Economist wanted to participate in this business, noting: “You can also exploit our ore.”
However, they exploit mainly miners. Some argue that trade scales and spectrometers (used to measure cobalt concentrations) show incorrect values. They complain about the lack of bargaining power and the dominance of Chinese buyers. They complain about a number of unofficial “taxes” imposed by government agencies, bosses, police and security guards who can earn $250 in bribes a night. In 90 of the 116 warehouses that were considered in BGR, the security service receives its “tribute”.
“We have laws, but there is no respect for them,” Mr. Lenge says. “The government is simply corrupt.”
Artisanal cobalt is transported by truck from trading warehouses to factories, where it can be mixed with ore from large mines.
“Despite the efforts of some companies to portray industrial (large-scale) mining and artisanal mining as completely different,” argues the Natural Resources Management Institute, a non-governmental organization in New York, “the line between them is blurred.”
International companies involved in the trading, refining and use of cobalt are responding to the challenges of artisanal mining in three ways. First, they are trying to understand what is going on in their supply chains. Apple, for example, maintains strict records of all its cobalt processing facilities. Many processing firms are consulting with RCS Global, whose staff is constantly working at ten artisanal mines in the Copper Belt, to check what is happening there. Tesla and Volvo are deploying blockchain-based systems to trace the origin of the cobalt they use.
Secondly, companies are trying to use less cobalt from the Congo, especially artisanal. BMW says it buys raw materials exclusively from Australia and Morocco. Elon Musk’s firm also makes batteries that require far less cobalt (or none at all). Huayou Cobalt, one of the largest plants in the industry, said in 2020 that it would stop buying artisanal cobalt, although it is not clear if this statement is still valid (its representatives did not respond to a request for comment).
Third, firms sponsor initiatives to improve the lives of miners. The Fair Cobalt Alliance, whose members include Glencore, Tesla and Google, is helping to improve conditions at artisanal mines. He renovates schools so that children have a place to study. The Responsible Cobalt Initiative, an association of German automotive firms and industrial giants, offers safety training.
A few years ago this was not the case. But critics say these actions are not enough.
“The current situation is very bad,” says Benjamin Katz of the OECD. “There is artisanal cobalt in the supply chains, even if it is not officially recognized. And very little is being done to improve conditions.” The big-firms consultant adds: “There is a group of recycling companies that pass their annual audit, pretend to be virtuous, and go back to selling phones and cars.”
In 2019, the government of the Congo came up with its own solution. Gécamines, the state-owned mining company, said its subsidiary Entreprise Générale du Cobalt (EGC) will have a monopoly on the purchase of artisanal cobalt.
“We are going to eliminate child labor,” said Albert Huma, then head of Gécamines. “Maybe not today, but tomorrow Congo will be the OPEC equivalent [for cobalt].”
It is planned that the ore purchased by EGC will be exported to the world market with the participation of Trafigura, a commodity trader. He will pay for measures that will help make the mines safer and more productive. The scheme is based on a pilot project that ran from 2018 to 2020 and the American NGO improved both conditions and performance, according to Trafigura and PACT. But critics question whether the model can be scaled.
There are many moral reasons to reform artisanal mines, but market incentives are not enough.
“There is a double standard,” says PACT’s Michael Dodin. “The approach is, ‘We’ll help you, but we don’t want to buy from you.’
The companies, for their part, are arguing that Congo needs to clarify the legal status of artisanal mines and that wealthy governments need to understand the situation of responsible cobalt mining. Without this, the Congo may once again miss the chance to use its natural resources to improve the lot of its people.
Source: The Economist
