Tesla’s CEO announced that he would address the corporate’s problems related to child labor in the provision chain. But his high-tech solution shouldn’t be enough.
From Alan OhnsmanForbes Employee
MLast 12 months, shortly after Tesla’s board and investors rejected a proposal to rent an outdoor auditor to be certain that the electrical vehicle maker’s cobalt suppliers didn’t use child or forced labor in mines within the Democratic Republic of Congo, Elon Musk promised to do exactly that – and more.
“I heard a question was raised about cobalt mining, and you know what? We’re going to do a third-party audit,” the world’s richest person told a raucous, enthusiastic crowd of shareholders at Tesla’s annual meeting in May 2023. “In fact, we’re going to put a webcam in the mine. If anyone sees children, please let us know.” he said giggling.
But Forbes has learned that Musk’s promised webcam has not appeared as expected a 12 months later. Instead of a live camera feed, Kamoto Copper Co., which is Tesla’s essential source of cobalt, is as an alternative publishing a Single photo of the extensive mine In southern Congo, images taken every month by an Airbus satellite orbiting high above the Earth don’t show any children, but that’s since the resolution is nowhere near sufficient to make out anything smaller than processing plants and the scarred landscape of a highly industrialized open-pit mine.
Tesla also claims that working conditions at Kamoto, owned by global mining giant Glencore, have been audited by third parties on multiple occasions, based on the most recent Environmental Impact Report“Our direct suppliers are third-party audited to ensure that there is no child labor in these mines and no material from unauthorized sources enters our supply chain,” the corporate said. “Four audits were conducted in 2023 and no cases of child labor were found among our direct suppliers.”
But neither the monthly satellite imagery nor third-party research addresses ongoing problems with cobalt and copper mining, said Courtney Wicks, executive director of Investor Advocates for Social Justice, who last 12 months represented the group of Tesla shareholders who tried to get the corporate to adopt stricter cobalt sourcing policies in 2023.
“Taking one photo a month is not a really comprehensive plan,” Wicks said. ForbesThe steps Tesla has taken are “not even worth mentioning. The effectiveness is simply not sufficient at this point.”
“Taking one photo a month is not a truly comprehensive plan.”
The problem shouldn’t be primarily what is going on within the Kamoto mining complex, but within the neighboring, unregulated mines, says Michael Posner, professor at New York University’s Stern School of Business and director of NYU’s Center for Business and Human Rights.
Artisanal miners carry sacks of ore in an artisanal mine near Kolwezi within the Democratic Republic of Congo in 2022.
JUNIOR KANNAH/AFP/GETTY IMAGES
A recent study He worked with the Geneva Center for Business and Human Rights and estimates that around 40,000 people under the age of 18 work or are involved in small-scale mining in Congo. Children are sometimes there “because their families do not have access to childcare. Older children also work in small-scale mining because their families need additional income,” the study says.
“Monitoring what goes on in a mechanized mining operation ignores the central problem, which is that a significant portion of cobalt comes from artisanal mining,” Posner said. Cobalt from these smaller mines is sold to traders and mixed with metal from industrial mines like Kamoto. But Tesla doesn’t monitor them in any respect, “and that’s the problem,” he said.
Another complicating factor: Cobalt from the Congo is shipped to China for refining, making it even harder to make sure it didn’t come from a small mine. “By the time it gets put into a battery in the U.S. or Europe, it’s been mixed up somewhere in China,” Posner said.
Neither Musk nor Tesla responded to requests for comment on the matter.
Glencore’s “customers are increasingly seeking assurance that their own supply chains have no link to human rights abuses,” said Charles Watenphul, a spokesman for the mining company. “Our copper and cobalt operations in the Democratic Republic of Congo participate annually in third-party responsible sourcing audits under the Responsible Minerals Assurance Procedure.”
Both Kamoto and Mutanda Mining within the Democratic Republic of Congo, which can also be owned by Glencore, have committed to participating within the Copper Mark, an initiative to advertise responsible mining practices within the copper industry, Watenphul said.
“Monitoring what happens in a mechanized mining operation ignores the central problem, which is that a significant proportion of cobalt comes from artisanal mining.”
The discrepancy between Musk’s promised actions on cobalt and the fact of what the corporate is doing shouldn’t be unusual for a billionaire with a history of constructing daring guarantees that he has didn’t keep (every part from the security of Tesla’s plants and Automated driving functions on plans to create a “ecological paradise“ at the corporate’s plant in Austin.)
Cobalt is a very important component of the batteries that Tesla builds for its electric cars. In combination with copper, the fabric acts as a stabilizing component within the cathodes of lithium-ion batteries and improves energy density. The Congo is home to about 70% of the world’s cobalt. Cobalt currently costs about $28,000 per tonne – lower than half the worth it was two years ago – but mining it remains to be lucrative. Batteries containing cobalt are utilized in every part from iPhones to laptops to electric cars. Although Musk’s company shouldn’t be the biggest consumer of cobalt, its leadership in electric vehicles has brought it into the highlight of kid labour and human rights activists.
Even third-party audits conducted by Tesla on the Kamoto mining complex don’t allay concerns in regards to the use of kid and compelled labor, Wicks said. That’s because such inspections are scheduled, not surprises, and don’t happen at night when problems usually tend to be discovered.
“The lack of standards and the lack of transparency regarding their implementation were our main concerns,” she said. “It sounds good in a sustainability report, but for investors who look at this issue and see it as a significant risk, the question is how effective these checks are.”
Trucks load bags of cobalt at an industrial mine within the Democratic Republic of Congo.
ARLETTE BASHIZI/THE WASHINGTON POST/GETTY IMAGES
Reducing cobalt consumption
Tesla claims it’s working to cut back the quantity of cobalt it uses by switching to recent battery chemistry over time. It can also be recovering more of the metal and recycling it to be used in recent battery packs. In 2023, the corporate said it is going to have recycled 117 tons of cobalt. Musk said cobalt only makes 3% of a Tesla battery by weight and that his goal is to eventually stop using it. The lithium iron phosphate chemistry Tesla uses in its batteries doesn’t contain cobalt.
Tesla has not provided any updated figures on how much cobalt it uses annually, but Benchmark Mineral Intelligence, which tracks demand for the metal for battery production, believes the three percent figure stays broadly accurate, largely since the raw material price has fallen by greater than half previously two years.
“Although cobalt consumption per unit is slowly declining, total consumption is increasing due to increasing vehicle sales”
“Reducing cobalt in cells has generally become a less-than-priority for many cell and automakers due to the low pricing environment resulting from the current oversupply of the cobalt market,” said Caspar Rawles, Benchmark’s chief data officer. “Although cobalt consumption per unit is slowly declining, overall consumption is increasing due to increasing vehicle sales, which far outweighs any reduction at the cell level.”
In a study on cobalt mining co-authored with the Geneva Center for Business and Human Rights, Posner and his co-authors argue that the perfect option to curb labour problems in small-scale mines is to officially recognise the role of those operations in the provision chain and work to enhance their conditions.
“Instead of ignoring it and pretending it’s not their problem, they need to say that this is part of our supply chain too and that we will do what we need to do to make sure there is a process to formalize these sites so that there are no children there and people are working in safe conditions,” Posner said.
For its part, Glencore says it recognizes that artisanal mining is a “source of jobs and income in many countries” and supports legitimization in order that such mining will be conducted as responsibly as possible, Watenphul said.
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