LME launches probe on cobalt suppliers over fears of child exploitation
The London Metal Exchange (LME), the world’s biggest market for industrial metals, has launched a probe into whether cobalt mined by child labour is trading on the exchange, following several reports indicating that minors are being exploited to extract the coveted mineral.
Members of the century-old trading platform first raised concerns about questionable cobalt this summer, Financial Times reports, as they feared some of it could have come from mines in the world's leading producer — the Democratic Republic of Congo, largely accused of child exploitation.
Worries mostly centre on a Chinese company named Yantai Cash Industrial, which first appeared on the LME in the third quarter of the year. Citing unnamed traders, FT says it was “widely speculated that Yantai Cash sources some of its unrefined cobalt from artisanal DRC mines that carry a higher risk of using child labour.”
The LME has sent a directive to all suppliers asking them to detail how they guarantee “responsible sourcing” of the commodities they trade in the exchange.
Early this month, the LME sent a directive to all suppliers asking them to detail how they guarantee “responsible sourcing” of commodities traded in London, the article says.
According to Amnesty International, children as young as seven have been found scavenging for rocks containing cobalt in the mineral-rich but impoverished African country.
The group says it has evidence the cobalt they dig is entering the supply chains of some of the world's biggest brands, as stated in a report released earlier this month.
Those and other allegations have put pressure on companies such as Tesla and Apple to trace the cobalt they use, with the computer and electronics maker leading the way in terms of transparency.
The electric vehicles (EV) boom has impacted cobalt prices this year and the metal is trading at around $61,000 per tonne, the highest in more than five years. That makes of cobalt the most expensive of the minerals required for manufacturing EV batteries.
According to commodity researcher CRU Group, about 60% of the mined cobalt is used to make batteries and most of that supply (54% according to data from Bloomberg Intelligence) comes from the DRC, which also holds about 49% of the world’s known reserves.