ON THE STREETS of Kolwezi, a mining city in the Democratic Republic of Congo, huge billboards advertise “executive” mobile-phone-data packages, a few gigabytes for a few dollars. They are popular not just with the suited types shown on the hoardings; they also sell to more roughly dressed men who work in crude “artisanal” mines, who use the data to check the price of cobalt. “Every day we look at the LME,” says Claude Mwansa, a miner who lives in Kapata, a neighbourhood where most people work in mining. He means the London Metal Exchange, where cobalt is traded.
That price has soared from $30,000 per tonne in January to nearly $52,000. The reason is surging optimism about electric cars. Carmakers are setting ambitious sales targets. Joe Biden, America’s president, plans to replace the government’s fleet of vehicles with electric ones. All this requires cobalt for batteries, and 75% of the metal is mined in Congo. Meeting the demand will not be easy.
By value, as much as 90% of cobalt mined in Congo comes from industrial firms such as Glencore, an Anglo-Swiss trader, and China Molybdenum, a Chinese state enterprise, which use modern methods to drill and refine the ore. The rest comes from miners like Mr Mwansa, who dig mostly by hand on land held by co-operatives, or else illegally, on land owned, say, by industrial firms. They mainly sell to Chinese middlemen who operate “depots” that line the main road out of Kolwezi, where they do basic processing and then transport the ore to South Africa or Tanzania, to be shipped to China.
Yet by employment, artisanal mining outweighs the industrial sort. Glencore’s two mines employ around 15,000 people; more than 200,000 may work on artisanal sites. “Creusers” work in hand-dug pits, using shovels and pickaxes to get the ore out. It is carried on people’s heads to rivers to be washed and transported on motorbikes. Accidents are common. Pits collapse; pumps refreshing the air fail. But the money is good, by Congolese standards. Working three or four days a week (all that most can physically manage), a miner can make 100,000 Congolese francs ($50). Most Congolese live on less than $2 a day.
Most buyers, however, want little to do with artisanal mining, because of the poor working conditions and the use of child labour. Apple and Tesla are among those being sued in America for using cobalt illegally mined on Glencore’s property by children who died (Glencore is not a defendant). The firms argue that the case should be dismissed and they should not be held responsible for the conditions of workers who mined cobalt they bought in a global supply chain, where provenance was hard to trace. Though some electronics firms have stopped using Congolese cobalt, carmakers have little choice—nowhere else generates as much. Tesla has vowed, but so far failed, to engineer cobalt out of its batteries. Last year it struck a deal with Glencore to buy “certified” cobalt.
Glencore says it does not sell artisanal cobalt but “recognises the legitimacy” of the practice. It supports the “Fair Cobalt Alliance”, which tries to improve conditions in artisanal mines. But in practice the big firms have tried to cut off the industry. Miners complain that walls have been erected and guards hired to keep them off sites they say are theirs. Some now scramble over walls to mine at night.
Congo’s government has its own solution. On March 31st Gecamines, the state mining firm, announced the start of operations of a state enterprise with a legal monopoly on all artisanal cobalt. This, it says, will help regulate conditions in the mines and also raise revenue. Trafigura, a Singapore-based commodities trader, says it will help sell the output, which will be certified by an NGO as free of child labour. Soldiers have been sealing off artisanal mines since the plan was first announced in 2019.
Miners in Kapata say all they want is a free market. “There are too many mafias here,” says Mr Mwansa. They worry that the new state firm will be an excuse for officials to extract more in bribes. “The government just wants to steal,” says Bernard Tshibangica, another miner. But buyers, desperate for cobalt not tainted by child labour, may see it otherwise. ■
This article appeared in the Finance & economics section of the print edition under the headline “From the red earth”
Source: Finance - economist.com
