For the many multi-national corporations that use cobalt in their products, the questions raised by investigations into the source of this vital metal presents serious questions. As CNN’s recent report revealed, producing an ethical electric car or smartphone requires significant analysis and oversight of what is often an opaque supply chain.
Cobalt is the single-most important determinate of a battery’s stability and performance, and demand driven in part by the global electric vehicle boom has resulted in the metal quadrupling in price. Other vitally important metals, such as copper, have also experienced significant growth over recent years.
As chairman of MBI Group, a privately-owned group of companies rooted in Zambia with an interest in the mining sector, the sky-rocketing demand for precious metals has had a significant impact. Zambia has some of the largest copper reserves in the world, and when extracted could have extremely positive benefits for the Zambian economy. Copper is widely regarded as a futureproof metal because of its widespread industrial use in renewable technology and electric vehicles.
Across the border in the Democratic Republic of Congo, where 59 percent of the world’s cobalt is mined, companies including Apple and BMW are pioneering an approach which cuts out suppliers. The world’s biggest brands are now dealing with small-scale mining operations directly, achieving a far greater understanding of where, and who has produced the metal they are purchasing. The hope is that this pioneering approach is replicated in the mining of copper and other materials, as multinationals turn to local businesses and knowledge to overcome supply chain difficulties.
The Better Cobalt project, which is a pilot scheme to trace “ethical cobalt” from small-scale mines in Southern Africa all the way to consumers of electric cars and iPhones, has also been launched in recent months. It is the first systematic attempt to trace the metal from source to end-user, aiming to increase transparency.
This new approach adopted by some of the world’s best known companies has been welcomed. Undoubtedly, the exercise has not only been advantageous from a business perspective, but also in terms of brand image. Any association with unethical practises and the working conditions uncovered by the considerable investigations into cobalt mining is particularly damaging. Customers may otherwise think twice about purchasing products, whether it is electric car drivers or smart-phone users if concerns over the source of cobalt are not addressed.
At the same time, this shift in strategy creates significant opportunities for African businesses and mine owners. It allows for greater autonomy and over-sight to ensure proper protections are in place, while income from the sale of the raw material is retained by African miners rather than 3rdparty distributors. Increased accountability over sourcing should therefore be welcomed by African businesses in the sector.
Integrating small-scale miners into the formal supply-chain makes both moral and economic sense, and the hope across the industry is that Africa can set the precedent. Multi-nationals should not only care about where their cobalt originates, but also copper, gold, titanium and other precious metals with similar supply chains.
Increased international pressure on global brands to source their products from ethical sources is the greatest push factor in securing increased accountability. Daimler, Apple, and BMW are among the first to look to local mining partners, however similar steps have not been taken by other businesses sourcing other minerals. This needs to change.
Many of the problems that the industry currently faces are caused by the absence of local knowledge and the failure to recognise the importance of fair pay, workers rights, and environmental controls. An understanding of where a metal is sourced is far easier if the business which you are buying the material from has the existing local knowledge – African businesses are in an unrivalled position to address these ethical concerns.
We are confident at the MBI Group about the role African companies can play in the market, and the future growth of extractive industries in the region. Corporate giants such as Apple, wherever possible, should be encouraged to engage directly with African companies who can meet the extensive demand for key commodities such as copper.
Investing in African businesses, with intimate local knowledge and expertise, not only makes commercial sense but also has significant economic benefits. The global reliance on rare metals found in their greatest abundance in sub-Saharan Africa puts African countries and African businesses in a unique position. It is high-time that the promise and capabilities are optimised to the greatest extent possible.
By Zuneid Yousuf
The group chairman and a director of MBI Group.