Insight 07: Building a Responsible Cobalt Supply Chain
Summary
A rapidly growing market for batteries across the globe has intensified pressures on suppliers of cobalt to meet surges in demand. Such pressures have impacted the livelihoods of miners – in particular, those working in the Democratic Republic of Congo’s artisanal and small-scale mines – in both beneficial and potentially deleterious ways. International efforts by businesses, governments, and NGOs to secure a responsible supply chain for cobalt have the potential to protect lives and livelihoods while ensuring corrupt practices are held in check.
Focus of the Insight
Global production of cobalt has experienced a growth spurt over the past few years, rising from an average global production of 38,000 tonnes per annum over the 1970-2010 period to around 140,000 tonnes per annum over the recent 2010-2021 period. The growth is largely driven by the market for batteries, which accounted for 57% of total cobalt consumption in 2021.
The Democratic Republic of the Congo (DRC) is by far the largest producer of cobalt, accounting for 62% of global production since 2010 and 70% in 2021. Other large producers of cobalt include Russia, Australia, Philippines and Cuba. Going forward to 2030, cobalt production is expected to grow to 14% of global demand in Australia and to 15% in Europe through additional mining activities and recycling.
Despite innovations in alternative battery chemistries, the demand for cobalt is still set to increase as EV sales escalate globally. Such an increase in demand leaves the cobalt supply chain very vulnerable to supply shortfalls. It is regarded as one of the most vulnerable raw material supply chains. Due to these factors, it is necessary to secure the supply chain and tackle the issues around cobalt’s sourcing regardless of technological developments.
Conclusion
To ensure the growing demand for cobalt does not exacerbate conditions for workers collective action will be required throughout the supply chain. Efforts to bring to light the perspectives and challenges of ASM workers – such as Pact’s Mines to Markets programme – are necessary to ensure that international pressure to act does not inadvertently do harm to those whose livelihoods are already challenged. Transparency, traceability and accountability are needed throughout the supply chain and can be accomplished through building trust at all levels and between all stakeholders.