Several major cobalt producers have launched the Fair Cobalt Alliance (FCA), an initiative aimed at improving conditions for artisanal — or small-scale — miners in the Democratic Republic of the Congo (DRC).
Fairphone, Signify, Huayou Cobalt, The Impact Facility, Glencore, the Responsible Cobalt Initiative (RCI), Sono Motors and Lifesaver have all committed to the alliance, which pledges to increase household incomes by investing in broader off-site community programmes, and to implement safer practices at artisanal mining operations.
The cobalt market is widely forecast to face a supply deficit in the next five years, possibly even the next two, according to some estimates. This means the incentive to boost artisanal production will only increase, amplifying scrutiny of this highly controversial corner of the market.
In 2019, an estimated 11pc of cobalt exported from the DRC was from artisanal and small-scale mining (ASM), although it accounted for as much as 20pc when cobalt prices peaked in 2018.
The formation of the FCA is an attempt to bring some of that material into regulated supply chains. "Responsible industrial and artisanal mining both play a critical role in the DRC's economy, as well as providing consumers with the battery minerals needed to power a greener economy," said David Brocas, head of cobalt trading at Glencore and chairman of the executive committee of the Cobalt Institute (CI), which promotes responsible production. "FCA's work on the ground complements the efforts of the cobalt industry in implementing the CIRAF programme [Cobalt Industry Risk Assessment Framework] developed by the Cobalt Institute, and the Responsible Minerals Initiative's Cobalt Refiner Supply Chain Due Diligence Standard."
The scale of the investments to be made have not yet been disclosed, but the alliance notably includes the RCI — an initiative set up by the Chinese Chamber of Commerce for Metals, Minerals & Chemicals Importers and Exporters in 2016, and whose members include technology giants such as Apple, Sony, Huawei and Samsung.
ASM employs around 100,000 people in the DRC, depending on cobalt prices. Covid-19 is expected to have exacerbated the regulatory problems surrounding artisanal mining, which is why some cobalt producers are attempting to regulate rather than exclude the artisinal market.
Aside from an economic need to increase cobalt production, DRC mining companies have been directly impacted by the problems with artisanal mining and recognise the need for change. Last year, 41 people died in accident at Kamoto Copper, in which Glencore subsidiary Katanga Mining owns a 75pc share. The incident was caused when artisanal miners illegally trespassed on the site.
"Artisanal mining is not going to go away as it provides a livelihood to many people who have almost nothing. Therefore, industry and civil society needs to embrace the issue and not ignore or seek to prevent it," outgoing CI president David Weight said in a recent interview with Argus.
