Speaking at a webinar on responsible mineral supply chains hosted by the Organisation for Economic Co-operation and Development (OECD) on April 26, James Nicholson, head of corporate responsibility at commodity trading firm Trafigura,
A new mining company in the Democratic Republic of Congo, Entreprise Generale du Cobalt (EGC), will ensure that the country's artisanal and small-scale mining (ASM) sector benefits from the energy transition by establishing legal and ethical channels to receive domestically produced Cobalt.
Nicholson noted that ASM's cobalt mining in the Democratic Republic of Congo is undergoing "fundamental transformation."
EGC was established by the DRC government in November 2019 with the aim of monopolizing the purchase, processing and sale of all cobalt produced by DRC artisanal miners or companies involved in ASM.
One of the core missions of EGC is to ensure that manual and small-scale cobalt production is carried out in accordance with the responsible procurement standards introduced by EGC on March 31 of this year.
The EGC standard is designed to ensure decent working conditions and eliminate key social, ethical and environmental risks that have historically plagued handmade cobalt production.
Nicholson said that more and more ambitious emission reduction targets are being considered recently, and as the pace of the energy transition accelerates, industry stakeholders need to keep a close eye on any unintended social consequences, particularly cobalt, a commodity that has had a volatile past.
As a result, transport electrification has become a priority for governments around the world, and the implications for the copper and cobalt markets are profound.
Trafigura calculates that total cobalt demand will double from 145,000 tonnes this year to 290,000 tonnes by 2030.
Electric vehicles account for about 75 per cent of demand.
As a result, Nicholson said the importance of DRC cobalt production will only increase, with the country accounting for 70 percent of all cobalt exports by 2025.
Nicholson reiterated that if the rights of those who work with ASM are upheld, and if the DRC truly takes advantage of this "incredible opportunity," then responsible procurement standards in this situation are "even more important."
Trafigura established a partnership with EGC in 2020, an important component of which is the support of Trafigura, PACT and sustainability consulting firm KUMI for development controls and traceability measures.
Nicholson said that all partners strongly believe that supporting the DRC government in formalizing ASM cobalt is a game-changing opportunity for the country and the cobalt industry as a whole.
This standard applies to all mines in ASM, cooperatives, EGC itself and buyers such as Trafigura.
By adopting and complying with standards, EGC and PACT staff will be present daily at each production site, monitoring compliance and making recommendations for process improvement.
"All [cobalt] products will be bagged and tamper-proof sealed," Nicholson said.
Payment will be made electronically.
The data will be uploaded to the blockchain solution."
According to Nicholson, EGC Cobalt will be tracked from the mine all the way to the international market, and KUMI will conduct on-site assessments on a quarterly basis, not remotely or via blockchain, but on-site to see how the standard is being applied.
