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Cobalt supply pressures rising amid DRC conflict mineral concerns

11th May 2018

By: Anine Kilian

Contributing Editor Online

     

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JOHANNESBURG (miningweekly.com) – Technology and clean technology companies are increasingly struggling to secure adequate supplies of cobalt, while the ethical sourcing of cobalt also remains a challenge.

The Democratic Republic of the Congo (DRC) provides about two-thirds of the world’s cobalt supplies, but traceability of origin and governance in the supply chain are severely deficient, says Africapractice.

“At present, appetite for cobalt-specific legislation is weak, owing to the negative market reaction to the introduction of the Dodd-Frank Act in 2010, which affected tungsten, tantalum, tin and gold (3TG) mining in the DRC, and US President Donald Trump administration’s planned rollback of the Act.

“However, as exposed by various nongovernmental organisation and media investigations, to date, the nature of the mineral’s value chain and the fact that cobalt from artisanal mines can change hands several times before being mixed with ‘clean’ ore prior to smelting, indicates the challenge companies face in their efforts to responsibly source the mineral. In anticipation of public pressure and eventual regulations, private sector actors are already seeking work-arounds,” it notes in a new report.

The cobalt price has seen fluctuations in recent months but overall demand is unlikely to recede, even in the face of sociopolitical uncertainty and heightened international scrutiny.

“As a result, we don’t expect drastic action by major multinationals to limit exposure to the country, but rather a behind-the-scenes effort to stay ahead of international legislation and stay on top of domestic developments,” the report notes.

The report highlights that with deep local knowledge and regular monitoring the mining industry can navigate the turbulent waters ahead.

“But rigorous supply-chain due diligence is already becoming a critical requirement for miners and end-users wanting to source cobalt from a region that has long suffered from abuses centred around its thriving industry.”

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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