How Polluting & Conflict-Ridden Is The Electric Vehicle Battery Supply Chain?

Last week I blogged about the potential environmental and governance harms from clean technology mineral extraction. But what about one specific technology, the lithium ion batteries powering the burgeoning electric vehicle market?

Alex Tilley and David Manley of Natural Resource Governance Institute (NRGI) discussed the potential boom in lithium mining in specific parts of the globe:

[I]dentified lithium resources are concentrated in salt flats in Argentina, Bolivia and Chile. If the world shifts to lithium-ion batteries to power vehicles and electricity consumption, South America will become a globally strategic region for energy. And if governed well, this industry could be transformative for these countries’ economies.

Fortunately many of these lithium-rich countries have decent standards and processes for mineral extraction, although we’ll need to be vigilant to monitor impacts.

The story is more concerning though for cobalt, also an important metal for EV batteries. Cobalt is a byproduct of copper and nickel mining, and a typical EV contains about 33 pounds of cobalt. Until recently, there were often surplus cobalt supplies, as it was used mostly for steel production. But its ability to conduct electricity so efficiently has made it critical for rechargeable batteries like in EVs and therefore more in demand.

The problem is the location of the supply. Thomas Wilson in Bloomberg News tackled cobalt mining in a recent piece, noting that the relatively rare metal is found mostly in the Democratic Republic of Congo, “a country in the African tropics where there has never been a peaceful transition of power and child labor is still used in parts of the mining industry”:

The country formerly known as Zaire — which hosted boxers Muhammad Ali and George Foreman for their 1974 heavyweight title bout dubbed the “Rumble in the Jungle” — supplies 63 percent of the world’s cobalt. Congo’s market share may jump to 73 percent by 2025 as producers like Glencore Plc expand mines, according to Wood Mackenzie Ltd. By 2030, global demand could be 47 times more than it was last year, Bloomberg New Energy Finance estimates.

With demand growing, mining companies including Glencore, Eurasian Natural Resources Corp. and China Molybdenum Co. are pouring more money into Congo. With cobalt prices rising, that government is looking for ways to increase its control of the supply as well as the profits. It’s also creating supply disruptions, as in a recent incident in which the government blocked copper and cobalt exports by the China-Congo joint-venture Sicomines in a dispute over local refining.

Worse, the cobalt mining may entail significant human rights violations. Amnesty International alleges that some “informal” mines may rely on child labor.

Corporations are responding to some of the public pressure around situations like in Congo to address the human rights and environmental implications of the battery supply chain. Apple and Samsung in particular were forced to more fully vet their suppliers. But these companies don’t always know where their cobalt comes from. Ultimately, more than half of the world’s supply of refined cobalt in rechargeable batteries comes from China, which in turn gets 90 percent of its cobalt from Congo.

Without more public pressure and international guidelines and cooperation, we lack guarantees that resource-rich countries will meet decent environmental and governance standards. Not only will residents of these areas be at risk, the supplies for electric vehicles may be held hostage to unstable, corrupt regimes. We’ve been down that road before with oil, and we should avoid repeating it in the coming age of electric vehicles.

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