Miners in DRC keep digging amid concern over child labour

Tuesday April 24 2018

A child and a woman breaking rocks extracted

A child and a woman breaking rocks extracted from a cobalt mine at a pit in the DRC. The conditions in which cobalt is extracted have left human-rights organisations pointing an accusing finger at miners and manufacturers. AFP PHOTO | LIONEL HEALING  

JAMES ANYANZWA
By JAMES ANYANZWA
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Mining companies are increasing spending on exploration activities as interest in base metals rebounds and clean technologies boost demand for niche battery ingredients.

Miners spent $8.4 billion searching for new metal deposits last year, about 15 per cent more than in 2016, according to a recent report published by S&P Global Market Intelligence.

That exploration spending, which does not include money used searching for iron ore, could increase again by as much as 20 per cent this year, S&P said.

“Improved equity market support for explorers allowed many companies to launch or resume drill programmes,” said Mark Ferguson, associate director of research for metals and mining at S&P. “Our year-end measure of exploration-sector activity reached levels not seen since early 2013.”

Gold led the way, accounting for more than 70 per cent of the year-on-year increase in spending, followed by base metals copper, nickel and zinc, all trading at multiyear highs.

Exploration for battery ingredients lithium and cobalt surged at smaller mining companies. Spending on lithium projects across 136 junior miners doubled, while expenditure on cobalt exploration quadrupled.

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Still, the world’s biggest mining companies kept exploration spending at low levels, preferring to return cash to shareholders. Miners with revenues of more than $1 billion spent 1.8 per cent of revenue, the same as in 2016, down from 3.2 per cent in 2012.

Growing demand

But now, with the world increasingly getting powered by lithium-ion rechargeable batteries, there is growing interest in using supersized rechargeable batteries to help store electricity generated from solar and wind sources.

This increasing demand has fuelled a surge in the prices of cobalt, a key ingredient in rechargeable batteries, and sustained a market for minerals in the Democratic Republic of Congo.

The DRC has six of the top 10 cobalt mines globally. Due primarily to Chinese investment, by 2022, the Central African nation will host the nine largest cobalt producers. More than 50 per cent of the world’s cobalt originates in the DRC.

Prices have gone up more than 18 per cent over the past month, and about 90 per cent in the past 12 months. Much of it goes to technology companies that use lithium-ion batteries in laptops and smartphones.

But the rising demand in electric vehicles has sent prices soaring, with demand forecast to jump from 2017’s 9,000 tonnes to 107,000 tonnes by 2026. Prices could double or even triple from there.

The major firms in the cobalt trade are Huayou Cobalt, Apple Inc, Huawei Technologies Co, and Microsoft Corporation. Others are car manufacturers BMW Group, Daimler AG and Tesla Inc, and battery cell manufacturers such as Samsung SDI Co Ltd and LG Chem Ltd.

Mining conditions

But the conditions in which cobalt is extracted has left human-rights organisations pointing an accusing finger at miners and manufacturers.

As the 12th Organisation for Economic Cooperation and Development (OECD) Forum on Responsible Mineral Supply Chains was held in Paris on April 17, Amnesty International urged zero tolerance for miners who continue to profit from human-rights abuses in the cobalt mines.

In DRC’s southern province of Lualaba, where the richest deposits are found, digging for cobalt by hand is not a choice: It is the surest way to earn a living. Artisanal mining accounted for about 15 per cent of Congo’s cobalt output in 2017, according to Darton Commodities.

But the artisanal production puts corporate behemoths in a public relations bind. The pits can be dangerous and Amnesty International found children involved in sorting, washing, crushing and carrying cobalt.

“We are calling on states and companies alike to put human rights, not profit margins, at the heart of their discussions,” said Seema Joshi, head of business and human rights at Amnesty International.

“In particular, companies need to take concrete steps towards addressing the suffering of victims and providing effective reparations. Even if a company has stopped sourcing from high risk areas, it still has a responsibility to help people who have suffered past human rights abuses linked to its business to rebuild their lives.”

Investigations by Amnesty have revealed that all multinational corporations mining cobalt in the DRC have failed to conduct human-rights due diligence in line with international standards.

The Amnesty report, “Time to Recharge: Corporate Action and Inaction to Tackle Abuses in the Cobalt Supply Chain,” shows that that children as young as seven are scavenging for rocks containing cobalt and those involved with mining frequently suffer from chronic illnesses.

Government failure

The DRC government has also failed to adequately enforce the prohibition against child labour in artisanal mining.

According to the government’s estimates, 20 per cent of the cobalt currently exported from the country comes from miners in the southern part of the country. There are 110,000 to 150,000 miners in this region, who work alongside industrial operations.
In Kolwezi, the capital of Lualaba Province, the government is trying something new: Regulating the informal activity to show that it can be done safely.

If successful, the initiative will protect thousands of livelihoods. It could also keep more of the revenue from cobalt production — currently dominated by foreign firms who repatriate profits — inside the country.

“The problem has been the same for 20 years — accidents were very frequent because the exploitation was done in a completely anarchic, unsupervised way,” Richard Muyej, the governor of Lualaba, said in an interview. “We’re finally going to do something about it.”

— Additional reporting by Bloomberg.

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