Tesla’s CEO said he would address the company’s challenges with child labor in its supply chain. But his high-tech solution doesn’t satisfy the concerns of labor activists.
from Alan OhnsmanForbes Staff
Llast year, just after Tesla’s board and investors voted against a proposal to hire an outside monitor to ensure the electric vehicle maker’s cobalt suppliers weren’t using child or forced labor in mines in the Democratic Republic of Congo, Elon Musk vowed to do just that. – and more.
“I heard a question raised about cobalt mining and you know what? We’re going to do a third-party audit,” the world’s richest man told a wild, adoring crowd of shareholders at Tesla’s annual meeting in May 2023. “In fact, we’re going to put up a webcam in the mine. If anyone sees any children, please let us know,” he said with a laugh.
But Forbes has learned that a year later, Musk’s promised webcam has not materialized as expected. Instead of a live camera feed, Kamoto Copper Co. which is Tesla’s main source of cobalt, instead posts a single photo each month of the sprawling mining complex in southern Congo, taken by an Airbus satellite orbiting high above Earth. There are no children to be seen, but that’s because the resolution isn’t nearly enough to reveal anything smaller than the processing facilities and the stark landscape of a highly industrialized open pit mine.
Tesla also claims it has had multiple third-party reviews of working conditions at Kamoto, which is owned by global mining giant Glencore, according to its latest environmental impact report. “Our direct suppliers undergo third-party audits to ensure that child labor does not occur in these mines and no material from unauthorized sources enters our supply chain,” the company said. “Four audits were conducted in 2023 and found no cases of child labor in the countries of our direct suppliers.”
But neither the monthly satellite image nor the third-party reviews address ongoing problems with cobalt and copper mining, according to Courtney Wicks, executive director of Investor Advocates for Social Justice. She represented a group of Tesla shareholders last year who tried to force the company to adopt stricter cobalt sourcing guidelines by 2023.
“Taking one picture a month — it’s not really a comprehensive plan,” Wicks said Forbes. The steps taken by Tesla “are not even worth mentioning. Effectiveness is simply not enough at this stage.”
“Taking one picture a month – it’s not really a comprehensive plan.”
That’s because the issue isn’t primarily what’s happening at the Kamoto mine complex, but at neighboring unregulated mines, said Michael Posner, a professor at New York University’s Stern School of Business and director of NYU’s Center for Business and Human rights.
Artisanal miners carry bags of ore at an artisanal mine near Kolwezi in the Democratic Republic of Congo in 2022.
JUNIOR KANNAH/AFP/GETTY IMAGES
A new study he worked on with the Geneva Center for Business and Human Rights estimates that some 40,000 people under the age of 18 work or are present in artisanal small-scale mining (ASM) operations in the Congo. Children are often there “because their families don’t have access to childcare. Older children also work in ASM because families need additional income,” according to the study.
“Monitoring what happens on a mechanized mine site ignores the central problem, which is that a significant percentage of cobalt comes from artisanal mining,” Posner said. Cobalt from these smaller-scale mines is sold to traders and mixed with metal that comes from industrial mines like Kamoto. But Tesla doesn’t monitor them at all “and that’s the problem,” he said.
Another complicating factor: cobalt from the Congo is shipped to China for refining, making it even more difficult to ensure it is not taken from an artisanal mine. “By the time it’s put into a battery in the United States or Europe, it’s all mixed up somewhere in China,” Posner said.
Neither Musk nor Tesla responded to requests for comment on the matter. Glencore declined to comment.
“Monitoring what happens in a mechanized mine site ignores the central problem, which is that a significant percentage of cobalt comes from artisanal mining.”
The discrepancy between Musk’s promised action on cobalt and the reality of what the company is doing is not unusual for a billionaire entrepreneur with a history of making bold promises that he has failed to deliver (everything from the safety of Tesla’s plants and the functions of automated steering wheel plans to create an “ecological paradise” at the company’s Austin plant.)
Cobalt is an essential component of the batteries Tesla builds for its electric vehicles. Found in combination with copper, the material acts as a stabilizing component in the cathode of lithium-ion batteries that improves energy density. Congo is the main source, with about 70% of the world’s cobalt. While cobalt currently costs around $28,000 per metric ton – less than half the price it was two years ago – it’s still profitable to mine. Batteries that use it go into everything from iPhones to laptops to electric cars. While Musk’s company isn’t the single largest consumer of cobalt, its leadership position in the EV space has made it a focus of work by children and human rights activists.
Third-party audits Tesla said it is conducting at the Kamoto mine complex also do not address concerns about child use and forced labor, Wicks said. This is because such inspections appear to be planned, not unexpected events and do not occur at night when problems are most likely to be found.
“The lack of standards and the lack of transparency about how they are executed, that was our main concern,” she said. “It sounds good in a sustainability report, but for investors who care about this issue and see this as a significant risk, what is the effectiveness of these audits?”
Trucks load sacks of cobalt at an industrial mine in the Democratic Republic of Congo.
ARLETTE BASHIZI/THE WASHINGTON POST/GETTY IMAGES
Cutting cobalt use
Tesla claims it is working to reduce the amount of cobalt it uses by switching to new battery chemistries over time. It is also recovering and recycling more metal for use in new battery packs. In 2023, the company said it recycled 117 metric tons of cobalt. Musk has said that cobalt represented only 3% of the weight of a Tesla battery and that his goal was to eventually stop using it. The lithium iron phosphate chemistry Tesla has started using in its batteries does not contain cobalt.
Tesla has not released recent details on how much cobalt it uses each year. But Benchmark Mineral Intelligence, which tracks demand for metals used to make batteries, thinks the 3% figure remains broadly accurate, largely because the material’s commodity price has more than halved in two years. last.
“Although cobalt consumption is trending slowly on a per unit basis, overall consumption is increasing due to increased vehicle sales”
“The move to reduce cobalt in cells has largely become less of a priority for many cell and car manufacturers due to the lower price environment associated with the current oversupply period the cobalt market is experiencing,” said Caspar Rawles, chief of data in Benchmark. “Although cobalt consumption is trending slowly on a per-unit basis, overall consumption is rising due to increased vehicle sales, which far outweighs any reductions at the cell level.”
In a study on cobalt mining, co-authored with the Geneva Center for Business and Human Rights, Posner and his co-authors argue that the best way to curb labor problems in artisanal mining is to formally acknowledge the role those operations play. in the supply chain and at work. to improve their conditions.
“Instead of ignoring it and pretending it’s not their problem, they should say this is also part of our supply chain and we’re going to do what we have to do to make sure there’s a process of formalizing these sites so that kids aren’t on it and people are working in safe conditions,” Posner said.
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