Skip To The Main Content

Cobalt at a Cost

APICS CEO

Friday August 31, 2018


The high-tech comforts many of us enjoy today are made possible by cobalt, a metal commonly used in smartphones, computers, laptops, tablets and electric vehicles. The popularity of these technologies has caused the cobalt market to surge by 400 percent from $10 a pound in 2016 to $44 a pound in April 2018, Fortune reports. As communities switch to renewable energy and electric cars, cobalt demand will continue to soar. Experts estimate that cobalt demand could reach 357,000 tons a year by 2030. But these comforts come at a price. The artisanal miners who extract and prepare the cobalt — many of whom are children — are among the poorest workers in the world. This presents an ethical challenge for the supply chains that need to acquire cobalt for their production.

Fortune’s Vivienne Walt and Sebastian Mayer traveled to the Democratic Republic of Congo (DRC) to learn more about the country’s artisanal cobalt mines. Although the country itself is rich in metals, including tin, gold, nickel, copper and cobalt, it is one of the poorest countries in the world, ranking 176th out of 188 countries on the United Nations’ 2015 “Human Development Index.” The country also is rife with political corruption and conflict, which has not helped the inhabitants of the country, most of whom live without electricity or running water.

Because of the extreme poverty, many families push their children into mining, which makes up 80 percent of the country’s earnings.  Children such as 15-year-old Lukasa rise at 5 a.m. to begin a 12-hour workday in the cobalt mines, which can include two-hour walks to and from the mines and one-hour walks to meet with Chinese traders. The workers use primitive tools to dig for cobalt by hand. On a good day, Lukasa makes about $9. Many child workers only earn about $2 a day.

Monitoring programs set up by the Congolese government to stop child labor estimate that about 10,000 of the country’s 100,000 artisanal miners are children. Although this percentage is small, these workers have a large impact on the market because cobalt mining currently is concentrated in one small area of the world. Two-thirds of the world’s cobalt comes from the DRC. According to Walt and Mayer, “It is virtually impossible to assure consumers of iPads, smartphones or electric vehicles that no children have dug, crushed, washed or transported the cobalt inside their devices.”

Corporate and consumer concern about this issue has been escalating since 2016, when Amnesty International highlighted the child labor epidemic in the cobalt industry and chastised more than two dozen tech and automotive companies for failing to investigate their supply chains and avoid using child labor. Some companies have responded by looking for other cobalt sources outside of the DRC and looking into building their own mines in Australia, Papua New Guinea, Canada, Montana and Idaho. Others, like Tesla, are researching ways to lessen their dependence on cobalt.

However, such moves will be damaging to the DRC economy. In an effort to provide more ethical materials and maintain business, the Congolese government has been reforming mines by fencing them off and placing security guards at restricted entrances to keep out children and pregnant women. Other international groups are working to address the human rights issues at the mines and helping to implement safety standards to protect the workers. 

But what about the child workers, whose families rely on their additional income? Tech giant Apple, in coordination with nonprofit international development organization Pact, is offering paid training programs for young adults to teach them job skills that could boost their socioeconomic statures. Today, the program teaches approximately 100 teenagers sewing, cell phone repair, hair dressing, carpentry, automotive repair, catering and other skills. Although these teens are earning much less than they could earn in the mines, the program organizers stress that these individuals will earn higher wages in the future thanks to their new skills. With any luck, these and other reforms will help break the cycle of poverty in the DRC.

Spotlighting ethics

With supply chains extending around the globe, companies must practice responsible procurement, which the APICS Dictionary defines as, “Assuring the use of ethical sources of goods and services where a firm does business to bring about a positive impact and minimize the negative impact on societies and environments …  Includes processes for identifying, assessing, and managing the environmental, social, and ethical risk in the supply chain.”

The APICS 2018 World Café will offer a special spotlight on this issue. Participants in the “Ethical and Sustainable Supply Chain” discussion will consider the crucial questions all companies face as they develop their ethical and sustainable supply chain management strategies.  To learn more about APICS 2018 or to register, visit apics.org/annual-conference.

In addition, APICS is conducting a joint research study with Supply Chain Management Review to understand the current state and future of ethical supply chains. Share how your company is adopting strategies related to ethical supply chain practices by participating in this brief questionnaire.