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Companies respond to questions about their cobalt supply chains

By Todd C. Frankel

September 30, 2016 at 9:17 AM

Congo DongFang Mining/Huayou Cobalt: Huayou Cobalt, parent company of Congo DongFang Mining, admits to having “insufficient awareness of supply chain management.” It says it did not know that buying artisanal cobalt “would increase directly or indirectly child labor and human rights” risks. It has hired an outside company to conduct supply-chain due diligence, with a report on this topic expected later this year. It is also working with the Organization for Economic Cooperation and Development (OECD) and the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters to develop guidelines for responsible mineral supply chains. The company said that to just avoid artisanal cobalt “is actually an irresponsible business act, which would very possibly aggravate the local poverty in cobalt mining regions and worsen the livelihood of local legal artisanal miners.”

Apple: The company said it is committed to working with Huayou to clean up the supply chain and to addressing underlying issues such as extreme poverty. Apple plans to increase scrutiny of how its cobalt is obtained but does not want to find remedies aimed at just “making the supply chain look pretty.” Starting in 2017, Apple will internally treat cobalt as a conflict mineral, requiring all cobalt refiners to agree to outside supply-chain audits and conduct risk assessments. The company also will soon, for the first time, include cobalt in an annual update of due-diligence efforts for its conflict-minerals supply chain. This goes beyond what current OECD guidelines call for. Apple also supports adding cobalt to the U.S. conflict-minerals law, which currently requires American firms to try to verify the source of tin, tungsten, titanium and gold used in their products.

LG Chem: The battery maker said that one of its suppliers, L&F Material, stopped using Huayou’s Congo-sourced cobalt in mid-2015. The company also “has strengthened the code of conduct for LG Chem suppliers, especially for tracking down the origin of raw materials.” The company now requires certificates of origin for some cobalt shipments. Today, Huayou supplies cobalt mined in New Caledonia, instead of Congo, for cathodes used by LG Chem. In response to a question expressing analysts’ doubts that the cobalt supply in New Caledonia was sufficient to replace what had been coming from Congo, LG Chem did not answer directly, replying in part that “LG Chem has requested L&F to submit Certificate of Origin on every purchase they have supplied and we are checking the certificates on a routine basis.” Also, the company said, “based on contract terms and conditions between LG Chem and supplier, if a supplier does not show any improvements including submission of certificate etc., LG Chem will plan to cut off transactions with that supplier.”

LG: Company said LG Chem, its main battery supplier, “has responded to your questions directly.”

Ford: Its battery supplier, LG Chem, “has indicated that the batteries they supply Ford do not have a history of cobalt from the Democratic Republic of Congo.”

General Motors: Its battery supplier, LG Chem, “has instituted a process with its tiered cobalt supplier to prevent the use of cobalt from the Democratic Republic of Congo in GM’s battery production.” The GM battery plant in Holland, Mich., is owned by LG Chem, and LG Chem has told GM that the plant does not use products with Congo-sourced cobalt. “We require our suppliers to comply with local and regional environmental laws and regulations and to be fair, humane and lawful employers, and to enforce similar requirements from their sub-suppliers.”

Samsung SDI: “Our ongoing investigation has not shown any presence of ‘questionable cobalt’ in our suppliers’ supply chain.” The company said it does use Congo-sourced cobalt and is “aware of DRC sourcing risks, given the political instability and the poverty of DRC. Our investigation is also showing the incapacity of the government and of upstream players to keep an effective chain of custody on cobalt. . . . Samsung SDI does not tolerate any form of child labour or health and safety issues into its supply chain.”

Samsung: The company did not address specific questions, instead issuing a statement that noted, in part, “Samsung strives to improve human rights and avoid environmental degradation by establishing responsible and ethical supply chain management and encouraging its suppliers to participate.”

BMW: “It is correct that the BMW Group purchases battery cells from its supplier Samsung SDI. . . . Only some of the cobalt for BMW Group battery cells originates from the Democratic Republic of Congo. . . . We have established a process with these companies to ensure that all cobalt supplied by them is free from human rights abuses.”

Amazon.com: The company did not respond to specific questions. It issued a statement noting, in part: “We are committed to ensuring the highest standards in all areas of production and manufacturing. We work closely with our suppliers to ensure they meet our standards, and conduct a number of audits every year to ensure our manufacturing partners are in compliance with our policies. “

Pulead: “We have asked our suppliers to adhere to their commitments and certify to us that they will not use child labor in their supply chain and no product that they sell to us is linked to illegal labor practices.” Pulead called this “a very complex issue” that cannot be solved by a simple embargo against artisanal cobalt, as it would hurt Congolese miners. The company supports increased awareness, “as everyone is monitoring everyone else along the supply chain.”

Amperex Technology Ltd. (ATL): In response to a request for information about the company’s role in the battery supply chain, a spokesperson for a subsidiary of TDK, the company that also owns ATL, wrote that “TDK and ATL have replied that they would not take this interview as some information may not be disclosed to the publics.”

L&F Material: Did not respond to repeated requests for comment.

Hunan Shanshan: Did not respond to repeated requests for comment.

Related: Read story: Tracing the path from deadly hand-dug mines in Congo to consumers’ phones and laptops


Todd C. Frankel is a reporter covering people and policy.

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