Glencore part of giant leap to transform informal cobalt mining

By Martin Creamer, www.miningweekly.com

August 28, 2020

JOHANNESBURG – Eight concerns, including diversified mining and marketing company Glencore, have joined forces to transform the informal mining of cobalt for the better.

Full implementation would take five years and would begin in mines in Kasulu and Kamilombe in the Democratic Republic of Congo (DRC), with the ambition to scale to more mines.

More than two-thirds of global cobalt supply comes from the DRC. Although the majority originates from large scale mining operations, a significant portion is extracted by artisanal and small scale mining (ASM).

The London- and Johannesburg-listed company, headed by CEO Ivan Glasenberg, on Monday announced its founding membership of the Fair Cobalt Alliance (FCA), which is going all out to improve ASM working conditions, end child labour and build a source of responsible cobalt from the ASM sector.

FCA has been set up to work with the DRC government and civil society partners to tackle problems in the cobalt supply chain and build a source of responsible cobalt from the ASM sector.

Glencore, the Responsible Cobalt Initiative, Sono Motors and Lifesaver have joined forced with Fairphone, Signify, Huayou Cobalt and The Impact Facility, at a time when demand for cobalt is increasing as the world transitions to a greener economy.

Glencore stated in a release to Mining Weekly that FCA would drive the development of fair cobalt by supporting the professionalisation of ASM site management, ensuring an uptake of responsible mining practices and channelling financial investment into mine improvements, to make mines safer, minimise environmental impact and create decent working conditions for men and women working at the mines.

To prevent children from working inside any of the cobalt mines, the new organisation would support ASM operators to establish credible control and monitoring mechanisms to keep children out of the mines.

“But we cannot stop there. In order to tackle and prevent child labour not just inside the mines but throughout the communities, FCA is supporting the enrolment of children into school, allowing children and youth access to education and vocational training,” the release stated.

INCREASING HOUSEHOLD INCOMES

The root causes that perpetuate high risk ASM would be addressed: “Poverty constitutes one of the root causes of the ASM-related child labour and hazardous working conditions. The need to generate income drives miners to take continually greater safety risks at the mines and the temptation for children to contribute earnings to their families’ incomes from participating in the workforce. In an effort to support the ASM community transition into sustainable livelihoods, FCA will invest in programmes outside mining and into opportunities designed to create sustainable livelihoods for as many community members as possible,” the release stated.

Most of the world’s cobalt supply comes from the Congolese province of Lualaba, and a significant proportion of that from artisanal mines. For communities in the region, artisanal mining is one of very few easily accessible sources of employment.

Although providing a livelihood for thousands in a country where many people have no job at all, ASM is associated with highly hazardous working conditions, systemic child labour, and unfair trading practices exploiting local workers selling to traders on the open market.

Currently, ASM miners lack the means to better mining practices and access to capital to address structural hazards. While cobalt is heralded as a key ingredient in the global transition to a green economy, it is questionable whether the benefits it generates are being fairly distributed and reaching the communities who take the greatest risks in excavating it at its source.

FCA, the release stated, would be working to:

• drive the supply of fairer cobalt by supporting the professionalisation of ASM mining management and safer and environmentally more responsible sites;

• free Kolwezi mines of child labour by supporting ASM operators in establishing credible control and monitoring mechanisms to keep children out of the mines and support the enrolment of children into school, allowing children and youth access to education and vocational training; and

• increase household incomes by investing in community programmes, designed to create sustainable livelihoods other than mining, focused on the promotion of agriculture, entrepreneurship and financial literacy support projects.

The Dutch Ministry of Foreign Affairs and Ministry for Foreign Trade and Development Cooperation, implemented by The Netherlands Enterprise Agency, was contributing to the alliance through a multiyear grant, the release said.

FCA would strengthen cooperation with the Responsible Cobalt Initiative and the Responsible Minerals Initiative to achieve wider recognition of responsible ASM cobalt and encourage joint action of upstream and downstream players to increase the supply of responsible ASM cobalt.

Global cobalt supply was not projected to meet demand, and there was a risk that informal ASM under poor working conditions would increase to fill this gap.

Best estimates suggested that in 2019 about 11% of cobalt exported was from ASM, while at the peak of cobalt prices in 2018, ASM counted for as much as 20%. More significantly, cobalt ASM was a source of direct employment for more than 100 000 people, with the number of workers fluctuating based on market prices and especially now in light of the ongoing pandemic. Across metals and gemstones, there was a total of 1.5-million to two-million artisanal miners in the DRC.

“The security of cobalt supply chains is more important than ever as our need for this highly relevant mineral in the new digital economy becomes evident. Where we find environmental, social or labour problems in supply chains, we should not avoid them, we should not disengage, but take action and make improvements,” said The Impact Facility and FCA executive director Dr Assheton Stewart Carter.

“Fairtrade works to share the benefits of trade more equally, through standards, certification, producer support, and on-the-ground programmes. We are very excited to see the launch of the Fair Cobalt Alliance, which seeks to implement these mechanisms for the benefit of the workers and their communities within the DRC artisanal mining sector,” said The Impact Facility responsible minerals manager David Finlay.

“Millions of livelihoods in the DRC and around the world depend on ASM. The OECD encourages industry to responsibly engage with the sector through progressive improvement instead of avoiding it, which often only makes problems in ASM more hidden. We fully support the FCA’s goal of investing in better working conditions for ASM, and other similar projects, in order to bring more transparency to the sector while expanding market access for small-scale producers,” said OECD policy analyst Benjamin Katz.

Characterised by their low degree of mechanisation, artisanal mines offer a variety of work to individuals and teams collaborating hand-in-hand in a manual system to find, recover, wash, sort and transport cobalt to warehouses buying and aggregating cobalt and copper ore before selling it to crude refineries operating in the province. Every individual’s role is needed to get the ore to market and comes with its own risks and rewards. Locally, artisanal cobalt mining is considered an attractive livelihood option for many, as it requires few qualifications and generates immediate cash flow. Hazardous working conditions, however, pose a very real threat to both the physical and mental well-being of workers at poorly managed mine sites.

The Impact Facility reports that ASM sites sometimes have thousands of vertical excavations or pits that burrow tens of metres to access cobalt ore. Pits are controlled by individual pit owners either by virtue of ownership rights to the surface land areas from before the mine site opened, as is the case for many of the pits at Kasulu, or because the cooperative at the site has determined the allocation through a process that appears to be reasonably transparent and widely understood. The pit owner’s participation in the workings of the pit ranges from an arm’s length relationship extracting a fee or rent from the digging team, to being quite involved and providing working capital for a pit team to pay for food and to buy basic equipment and even managing the organisation of the operation itself.

The pit is excavated by a team of five to seven diggers (locally known as creuseurs) that either work inside the pit, carry bags of ore up the shafts to the surface, guard already produced ore, or coordinate the teamwork. These teams generally operate under a profit-sharing agreement with the pit owner. Usually diggers are provided with a small daily compensation for their time, which might be paid in cash or through the provision of food. The cooperative has the responsibility to ensure that agreements between pit owners and diggers are reasonable and fair. The frequency with which the cooperative mediates agreements is generally considered to be low, however.