Cobalt industry expands sustainability focus: CI

The responsible sourcing of raw materials including cobalt has evolved beyond anti-corruption initiatives to encompass three key areas of supply chain sustainability, delegates at the Cobalt Institute conference in Hong Kong heard.

The three main sustainability themes encompass policies on security of supply and the handling of chemicals; developing a circular economy to address decarbonisation and recycling; and lifecycle management to reduce the industry's environmental footprint and resource depletion.

The Cobalt Institute launched its cobalt industry responsible assessment framework in January in line with those themes, the institute's sustainability manager Carol-Lynne Pettit said.

Emphasis on due diligence

Increasing requirements from civil society and regulators for downstream consumers to demonstrate ethical sourcing of cobalt are moving up the supply chain.

Cobalt was not listed in the US government's Dodd-Frank Act as a conflict mineral along with tin, tantalum, tungsten and gold, but many companies expected it to be included. And "with emphasis on price and demand, attention has always come back to issues in the Democratic Republic of Congo, where more than 60pc of the world's cobalt is mined," data management firm Assent Compliance's senior subject matter expert Jared Connors said.

The OECD has proposed a list of 30 minerals requiring responsible sourcing, which includes cobalt.

Metals consumers are required to identify their suppliers and demonstrate due diligence for product compliance with government regulations restricting the use of certain substances.

"As companies further broaden their sourcing networks they are impacted by risk issues they don't necessarily have visibility into," Connors said. "There are three areas of risk that downstream companies have to address," — chain of custody in providing transparency on upstream sources of metal, data transfer to correctly identify smelters, and inconsistency in key performance indicator reporting.

Moving to a circular economy

"We need to move away from the current linear model — to take, make and dispose — to a circular economy," economic affairs officer at the division on international trade and commodities at UN development agency UNCTAD, Claudine Sigam, said. "It's not an option, it's an imperative."

"A circular economy for batteries requires standards, business model innovation and policies to lower costs for reuse, accelerate recycling and lower the carbon footprint along the supply chain," trading firm Trafigura's head of corporate responsibility James Nicholson said.

"It is economically viable to recover cobalt materials at high recycling rates," Belgian Umicore's senior vice president Guy Ethier said. The rates vary by sector, with cobalt used across batteries, electronics, alloys, magnets, catalysts, biotechnology and medicine.

Lifecycle management

"The industry must consider the carbon footprint of the whole supply chain for electric vehicles compared with fossil fuel vehicles," producer Nornickel's principal nickel and cobalt analyst Alex Khodov said.

"Environmental commitment and a sustainable supply chain is not a nice thing for electric vehicle manufacturers to have but a question of credibility and brand reputation," Khodov said.

The electrification of the transport sector is necessary because around 80pc of CO2 emissions are attributable to road vehicles, the UNCTAD's Sigam said.

But the adoption of electric vehicles and renewable electricity equipment including wind turbines and solar panels uses minor metals and rare earths that are highly energy intensive.

"Nornickel is focused on ensuring that power supply of plants and mines is as carbon neutral as possible using de-carbonising power supply," Khodov said.

The potential environmental impact of proposed cobalt extraction alternatives including deep-sea mining presents a challenge that must be addressed, said Tom Albanese, an advisor at mining exploration consortium CIC. "And we need to ensure continued availability of resources for host nations so it is not boom and bust where we extract for 30 years and then nothing is left."