Tesla’s CEO said he would take over the company’s demanding situations, akin to a child’s hard work, on its home chain, but his high-tech solution isn’t enough.
Last year, just after Tesla’s board of directors and investors rejected a proposal to rent an outdoor observer to make sure the electric vehicle maker’s cobalt suppliers didn’t use children’s hard labor or forced hard labor in mines in the Democratic Republic of Congo, Elon Musk pledged to do just that. . . and so on.
“I heard a question about cobalt mining and you know what?We’ll do a third-party audit,” the world’s richest user told a crowd of loud and adoring shareholders at Tesla’s annual meeting in May 2023. “We will actually install a webcam in the mine. If you see children, let us know,” he said with a laugh.
But Forbes learned that a year later, the webcam promised through Musk didn’t materialize as planned. Instead of a live camera feed, Kamoto Copper Co. , Tesla’s main source of cobalt, publishes a single photograph of the sprawling mining complex in southern Congo. taken via an Airbus satellite orbiting the Earth. There are no children, but that’s because the solution isn’t enough to reveal anything smaller than the processing facilities and stark landscape of a highly industrialized open-pit mine.
Tesla also claims to have been subject to several third-party reviews into operating situations at Kamoto, which is owned by global mining giant Glencore, according to its latest environmental impact report. “Our direct services are subject to third-party audits. “”To ensure that no child hard work occurs in those mines and that no material from unauthorized resources enters our chain of origin,” the company said. “Four audits were conducted in 2023 and did not reveal any cases of child labor at our direct supplier sites. “.
But neither the monthly satellite symbol nor third-party reviews address the current disruptions to cobalt and copper mining, according to Courtney Wicks, executive director of Investor Advocates for Social Justice. Last year, he represented Tesla’s shareholder organization that tried to get the company to adopt stricter cobalt sourcing standards in 2023.
“Taking one photo a month is not a complete plan,” Wicks told Forbes. The measures taken through Tesla “are not even worth mentioning. Effectiveness is simply not enough at this point. “
In fact, the challenge has to do mainly with what’s happening at the Kamoto mining complex, albeit in nearby unregulated mines, said Michael Posner, a professor at New York University’s Stern School of Business and director of New York University’s Center for Business and Human Rights.
Artisanal miners send sacks of ore to an artisanal mine near Kolwezi in the Democratic Republic of Congo in 2022.
A new study he conducted with the Geneva Centre for Business and Human Rights estimates that around 40,000 people under the age of 18 work or work in artisanal small-scale mining (ASM) operations in Congo. The children are there “because their families do not have access to daycare. Older young people also work in ASM because families want more income,” according to the study.
“Monitoring what happens in a mechanized mine ignores the central problem, which is that a significant percentage of cobalt comes from artisanal mines,” Posner said. Cobalt from those smaller-scale mines is sold to investors and combined with steel from commercial mines such as Kamoto. But Tesla doesn’t control them at all “and that’s the problem,” he said.
Complicating the complication: Congolese cobalt is shipped to China for refining, making it even more complicated to ensure it doesn’t come from an artisanal mine. “When it’s put in a battery in the U. S. or Europe, it’s already all combined somewhere in China,” Posner said.
Neither Musk nor Tesla responded to requests for comment on the matter. Glencore declined to comment.
The gap between the cobalt stock promised by Musk and the truth of what the company is doing is not for a billionaire entrepreneur with a track record of ambitious promises he has failed to deliver (from protecting Tesla’s factories to automated driving features to plans to create an “ecological paradise” at the company’s factory in Austin).
Cobalt is a component of the batteries that Tesla makes for its electric vehicles. It is found in a mixture with copper, and this draconsistent acts as a stabilizing element in the cathodes of lithium-ion batteries, which increases power density. Cobalt is the largest source. Although cobalt currently costs around $28,000 per metric ton (less than half the value it was two years ago), it is still lucrative to mine. Batteries that use it are used in everything from iPhones to laptops. While Musk’s company is rarely the largest customer of cobalt, its leadership position in the electric vehicle sector has made it a target for human rights activists and child labor.
The third-party audits Tesla said it is conducting at the Kamoto mining complex also address considerations about the use of child hard labor and forced hard labor, Wicks said. That’s because such inspections appear to be planned, marvel at events, and not position themselves at night, when disturbances are most likely to be detected.
“The lack of criteria and the lack of transparency about how they are executed is our main concern,” he said. “It sounds smart in a sustainability report, but for investors who care about this factor and see it as a significant risk, how effective are those audits?
Trucks load bags containing cobalt at a commercial mine in the Democratic Republic of Congo.
Tesla says it’s working to reduce the amount of cobalt it uses by switching over time to new battery chemistries over time. It’s also about recovering and recycling more steel for use in new batteries. In 2023, the company said it recycled 117 toneladas. de cobalt. Musk said that cobalt is only 3% of the weight of a Tesla battery and that his purpose is to eventually prevent it. The lithium iron phosphate chemical Tesla has begun using in its batteries does not involve cobalt.
Tesla did not provide recent details on how much cobalt it uses each year. But Benchmark Mineral Intelligence, which tracks demand for metals used in battery production, estimates that the 3% figure is still the most accurate, largely because the value of raw materials has fallen by more than one part in the past two years.
“The decision to reduce cobalt in mobile is a lower priority overall for many mobile and automotive brands due to cost reductions similar to the current constant period of oversupply that the cobalt market is constantly experiencing,” said Caspar Rawles, chief data officer at Benchmark. Despite a slow downward trend in cobalt consumption consistent with the unit, overall consumption is expanding due to higher vehicle sales, which far outweighs any relief at the mobile level. “
In a study on cobalt mining co-authored with the Geneva Centre for Business and Human Rights, Posner and his co-authors argue that the most effective way to reduce the disruptions of hard work in artisanal mines is to officially recognize the role those operations play in the supply chain and hard work conditions.
“Instead of ignoring it and pretending it’s not their problem, they want to say that this is also a component of our source chain and that we’re going to do whatever we want to make sure that there’s a procedure in place to formalize those sites. so that young people are not in them and other people run in conditions,” Posner said.