Are the products we consume responsible for human and environmental degradation? To answer this question, this podcast series takes us on a journey through the supply chain of cobalt, a commodity that is critical to the global energy transition.
We start at mine site - but not any mine site. A significant proportion of cobalt is sourced from artisanal and small-scale mines in the Democratic Republic of Congo, where life is tough and often linked to child labour and environmental harm. To help us unpack the role of artisanal and small-scale mining in the cobalt supply chain we speak with Mickaël Daudin, Deputy Director at Pact.
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Highgrade Media is a not-for-profit organisation that produces interviews and documentaries that identify, capture and disseminate analysis and insights in the field of natural resources and social progress.
Our mission is to provide open and free access to specialist knowledge and to disseminate good practice and innovation in this field. See www.highgrade.media for our portfolio of published material.
With support from the German Federal Ministry for Economic Cooperation and Development, through BGR.
Are the products we consume responsible for human and environmental degradation? To answer this question, this podcast series takes us on a journey through the supply chain of cobalt, a commodity that is critical to the global energy transition.
We start at mine site - but not any mine site. A significant proportion of cobalt is sourced from artisanal and small-scale mines in the Democratic Republic of Congo, where life is tough and often linked to child labour and environmental harm. To help us unpack the role of artisanal and small-scale mining in the cobalt supply chain we speak with Mickaël Daudin, Deputy Director at Pact.
***
Highgrade Media is a not-for-profit organisation that produces interviews and documentaries that identify, capture and disseminate analysis and insights in the field of natural resources and social progress.
Our mission is to provide open and free access to specialist knowledge and to disseminate good practice and innovation in this field. See www.highgrade.media for our portfolio of published material.
With support from the German Federal Ministry for Economic Cooperation and Development, through BGR.
Åsa Borssén:
What goes into your car? As new minerals are rapidly making their way into our everyday life, we’re increasingly concerned about the footprint of the materials that underpin our modern lifestyles. The fungibility of natural resources has helped some business players hide behind the complexity of global supply chains. To shed light on one of the most obscure commodities, join me as I pull back the curtain on the supply chain of cobalt – from deep underground, all the way to your driveway. I’m your host Åsa Borssén, and this is Highgrade.
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Åsa Borssén:
Welcome to Highgrade and this podcast series on responsible sourcing. As opposed to copper or iron ore, some minerals and metals are often sourced from small- or artisanal mines, known as ASMs. Such is the case of cobalt, a critical commodity for modern batteries and the global energy transition. But work at an ASM cobalt mine is tough, often linked to child labour and environmental degradation, which has given the metal a bad reputation. My guest Mickaël Daudin, is Deputy Director at Pact, an international NGO, with extensive experience in artisanal mining in DRC, and the broader Great Lakes region.
Mickaël, thank you for joining me today.
Mickaël Daudin:
Thank you for having me.
Åsa Borssén:
You and I are going to talk extensively about artisanal- and small-scale mining today. But I think a good place to start is how does a small or artisanal mine work?
Mickaël Daudin:
There is no one ASM mine which is already the complex start because every mine is very different, especially in the ASM sector. And a mine can vary very much in terms of size and number of people involved, from just a few miners to various 1000s or dozens of 1000s of people. And there are many different tasks and roles with specific relations. So, we have diggers, crushers, washers, transporters, traders just to name a few, and they usually use rudimentary tools. So, it's a very low level of mechanisation or no mechanisation at all. I can give some statistics about ASM to also understand the importance of ASM in today's world economy. Around 70% of the world's cobalt comes from the DRC and from those 70 percent it is estimated that around 20 to 30% comes from ASM, which means that ASM in the DRC produces around 10 to 12% of the world cobalt, which is indeed significant. And ASM is fundamental for livelihoods. Only 10% of the global production comes from ASM so the other 90% coming from large scale mining. But reversely 90% of the total global mining workforce are artisanal and small-scale miners. And that's why ASM is fundamental as a development force.
Åsa Borssén:
The terminology we use, ASM, it covers both small and artisanal mining. Do you in your work differentiate between the two types?
Mickaël Daudin:
There are small differences between both. We usually group them together because they require similar interventions. In both ways, they will use rudimentary tools, it will involve high level of workforce, which work with bare hands. And there may be just some more equipment that would be used by a small-scale mine as opposed to an artisanal mine and in general, a first way to develop a mine will be to move from artisanal small-scale. So, there would be a higher level of organisation when we talk about the small-scale mining. But, in general, because they face similar challenges, similar issues, we will group them together as ASM. And we will work on those with similar type of interventions.
Åsa Borssén:
ASMs are marginal contributors to say global copper production but as we've mentioned for other commodities, they represent a significant fraction of global supply. Cobalt, for example, Do informal miners sell their products directly or consolidate volumes with others to achieve better prices?
Mickaël Daudin:
So, this question points to two fundamental challenges and issues that I would like to address first. The first being the issue of informality and second around price. Formalisation as opposed to informality is very complex process, which is necessary to achieve but it includes multiple layers, dimensions, and stakeholders. From a legal perspective, formalisation means having registered miners or registered cooperatives to have the proper mining title. From an institutional point of view, it means to recognise ASM in the first place to have the proper policies in place. This is related to governance issues. For instance, you have some countries where ASM is recognised by law, by mining code. But governments haven't created an enabling environment for miners to have the proper permits and licences. Hence, the importance to work with governments as well. There are other aspects of formalisation around the chain of custody, the transparency and the payments made; with regards to health, safety and environment, security arrangements, human rights protection, from a technical and educational point of view how ASM is properly done, from opening a mine to closing it, then also access to finance is another aspect of formalisation. And it also requires having the proper due diligence processes in place.
If we look at prices, which is somehow a component or part of it, having better prices requires better knowledge and capacities to achieve better bargaining power and hence better prices by the miners. That said, price is very complex. And this is not necessarily something that we as NGO have an influence on, because it depends on multiple factors on the quality of minerals to the grade of the minerals, on the volume of minerals traded, the remoteness of mines meaning the costs for transport, whether indeed mine is informal or formal. But we do have examples where formalisation efforts have resulted in better prices, because of the lower informal taxes that miners otherwise may have to pay along the along the route. So, all these components of formalisation need to be taken into account. And that said, we should not solely focus on the producing side. But on the buying side. So, the problem is equity around the engagement from those buying internationally, from ASM minerals, meaning the downstream sector.
Åsa Borssén:
So, you're talking about the downstream sector, but there has to be a middleman. Who specifically buys from the ASM miners?
Mickaël Daudin:
So the what we call upstream is basically from the miner, himself or herself, at the mine level up to the smelter level. So it already includes a wide range of stakeholders. The miners usually sell the minerals to a local trader, the middlemen, who himself will sell to an exporting company on the ground or refinery depending on the type of minerals we are talking about. And these companies will sell to international traders who may aggregate volume from different countries and will then in turn sell to the smelters. The smelters constitute what we call the choke point in the supply chain. Because once the minerals are smelted, then there is no way anymore to know where these minerals come from. This is why any controls will need to be made prior to that point. And that's where we differentiate between the upstream and the downstream. Downstream being end users, so companies working in telecommunication or cell phone technology and so on, who buys the metals.
Åsa Borssén:
We're going to move on now and zooming on cobalt. Cobalt is a supply chain that is surrounded by controversy, and it has been described as a blood mineral often linked to child labour and environmental degradation. But Mickaël, you have extensive experience on the ground. Tell me what is really happening.
Mickaël Daudin:
Sure. So first I would say we tend to avoid the term blood minerals or conflict minerals, which is usually what is used for tin, tantalum, tungsten, and gold, because it is stigmatising, and it may result in disengagement from the ASM sector. Of course, it doesn't mean that there are no issues with ASM. Yes, they are instances of child labour in as in mining in cobalt and other minerals, although not everywhere, not all the time. Child labour itself is a highly complex topic, and there is no one size fits all approach. It's here key to understand the root causes of child labour to develop interventions that are adapted to the local problems without disrupting local livelihoods meaning without disengaging from ASM. Apart from child labour, there are other issues, of course, security, environment, human rights, but the point remains that these issues can and should be addressed with local stakeholders in order to resolve them. So, it's not about looking away but about engaging with the local actors on the grounds to develop common solutions.
Åsa Borssén:
How do you think that us as consumers, how should we read on those headlines? Should we think that they are exaggerated or one sided?
Mickaël Daudin:
On the one hand, I think it's important to show that there are issues that consumers need to understand and to be aware of, because that can create also some level of responsibility and accountability for big companies downstream who are buying from those minerals or who depend from on those minerals. At the same time, what I think is too often counterproductive is solely to focus on the problem and to depict artisanal mining activities as only being harmful. It may only lead to further disengagement from the ASM sector. We would like much more visibility of what can be done, how can ASM also be sourced responsibly - and it can, and they are very good examples. So that's really my problem when I when I do read these headlines because it will most of the time solely focus on the negative aspect of it.
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Åsa Borssén:
Are the products we buy directly responsible for human and environmental degradation? In this podcast series on responsible sourcing, we embark on a journey through the supply chains that make up our lifestyles, from mine to final product.
Today I'm speaking with Pact’s Mickaël Daudin. We have started that source with the men and women that dig up the raw materials we use.
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Åsa Borssén:
We've touched up on it already, but in terms of traceability, can companies further up the supply chain know whether they are buying from ASM?
Mickaël Daudin:
The short answer is yes. They can know if they want to. So, it's not impossible. It can be complicated, but they are again solutions for that. So, it first requires companies to understand their own supply chain and I realised over the years that it's far from being evident. So, companies would need to start mapping their own supply chain up to the upstream levels up to the mines to understand whether they are sourcing minerals from which countries and who are the suppliers. And that may not always be an easy exercise, especially when there are multiple tiers involved equalling to very high numbers of suppliers. But that's why companies may also decide to join industry associations or industry programmes and by doing so to also support ASM overall. The key point in that answer, however, is different. Traceability - because you're asking about traceability - is only one and a small, one component of due diligence, a process of verifying who your supplies are, how minerals were mined, transported, traded in which conditions and so on. And this also includes the process of ongoing checks, assessing risks, taking actions to address and resolve those risks. So, traceability will not be able to provide answers to those points. So that's why too often, I think companies may refer to traceability as the gold solution, so to say, but it's not enough.
Åsa Borssén:
There is a risk for the downstream when it comes to engaging with ASM. It can be seen as an as an easier choice to only work with large scale miners. Can you understand that dilemma?
Mickaël Daudin:
I do understand it. But often there is as well a discrepancy between the theory, meaning sourcing or saying that a company will choose to source solely from a large-scale mining company, and there is a practice where - and I can speak for the cobalt sector in the DRC - where we know that ASM sourced minerals are ending in the supply chain of large-scale mining companies. So, that's a way for downstream companies to look away and not face the real what the real issue is. Again, it is the question of, you know, how can you verify 100% that the production you're buying solely comes from large-scale mining? And are many challenges in that regard as well.
Åsa Borssén:
And you touch upon formalisation and ongoing efforts to formalise these operations. However, wouldn't formalisation put ASM workers completely out of business?
Mickaël Daudin:
So the short answer is no, absolutely not. And in the case of cobalt, it shows that formal miners had higher benefits from participating in those programmes. If we look at the standards, right, we see that miners that participate in a formalised supply chain are less likely to have to make informal payments to rogue agents or to rouge soldiers, for instance. Because the supply chain is formalised, then there is a clear chain of custody, documentation, and clear taxes to be paid, where miners can address or report the risks that they face. And that allows us to address those risks. And that's why it is much less likely for them to exactly fall under the radar and will have the support that they need to work responsibly.
Åsa Borssén:
There are so many millions of people working in ASM. As you mentioned in the beginning, do you envision that all of these miners will in the end be formalised?
Mickaël Daudin:
Well, that's the goal. We do show that it is possible. Of course, it won't be done in a day. This is clear, it will take time. Obviously 45 million people involved in the ASM sector will present a very big challenge. Again, I think what is needed today is a stronger, much stronger, involvement from the end users; a higher awareness from the consumers themselves who can in turn put more pressure on the companies they buy the product from, to support such interventions on the ground. What's very promising is that the solutions exist, and that you can achieve a very important impact if you have the means for it.
Åsa Borssén:
There is a trend though that I see from companies, tech companies specifically, that they buy directly from large-scale mines.
Mickaël Daudin:
I do see such examples, indeed. Especially in cobalt there were some announcements in that regard. And I will say again, this is a worrying trend to me, because it is about not recognising what the problems are, what should be done about it, and trying to remove oneself from the responsibility of addressing those risks. I can mention here in terms of some solutions that are put forward by some companies to support their vision of responsible sourcing from large-scale mining companies, which includes the use of blockchain solution for instance. Such solution to me will not be the bulletproof answer by no means, because we will only know the traceability using a blockchain from the point where the information has been entered in the system online. It will never provide the information of anything that happens before that. So, there is what we can call the first mile problem, the first mile until you reach the point where the data is entered in a blockchain platform. So, the blockchain will never tell you in which conditions the minerals were mined, whether the minerals indeed come from the mine they it come from, whether you had current payments made by the miners and so on. So, again, that shows the need to have a proper monitoring on the ground, the need to look at the bigger picture, which is, again, the topic of today's discussion, formalising ASM overall. Because this is the only way you will progressively reduce the risks and improve the overall mining governance.
Åsa Borssén:
There are examples from other sectors, for example, fairtrade coffee, that penalises poor standards in the coffee industry. Would you be open to a responsible sourced cobalt certification, for example?
Mickaël Daudin:
There is one general problem I have with a certification. Because certification can be associated with a piece of paper where you have a stamp telling you these products has been sourced responsibly. And in the case of the mining sector, with the many years of experiences that we have on the ground, I will absolutely say that it is not the right solution. Because we do need much more than one-off checks on the ground. We do need ongoing monitoring someone on the ground that will continuously be present, record and report what's the different type of risks are and support companies to address those risks. This is this ongoing aspect which is key. The certification approach to some extent, maybe associated with an auditing approach, right, we have control checks, but it doesn't capture the very nature of ASM sector, which is very dynamic, where situations may change on a daily basis. Where you need therefore, to have a mechanism in place that will ongoing, continuously address those risks and make sure that the risks are mitigated. This is the proactive and continuing process that will better show the improvements that you want to achieve on the ground.
Åsa Borssén:
Mickaël, this has been a fascinating conversation. And just as a final question, we've been talking today about responsible sourcing, and this is getting a lot of attention at the moment. Why do you think that is, why now?
Mickaël Daudin:
Clearly, it should have been something that should have been raised much earlier on. Obviously, now, with the ‘Green Revolution’ and increasing use of electric vehicles it is clear that this brought much more attention to minerals such as cobalt. But your question is spot on because these issues have been ongoing for years for decades. ASM miners have been working on the ground for a much longer times than large-scale mining companies very often and they have faced such issues. So, which is why we do need today to understand and create this awareness that not because only we talk about cobalt, that there are no issues in other minerals and that we should solely focus on one aspect. So, we need to look at ASM overall and realise that ASM miners provide minerals that are essential for today's economy. And we need to industry to step up and to address all these issues of rule and not solely focus on what is currently being the focus of attention in the media.
Åsa Borssén:
Thank you so much for joining us today, Mickaël.
Mickaël Daudin:
Thanks very much for the opportunity.
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Åsa Borssén:
And thank you for listening to this Natural Resources Podcast, the first episode in our series on responsible sourcing.
The ASM sector accounts for 10% of global production of minerals and metals. But a whopping 90% of the global mining workforce, according to Pact. Working in an artisanal mine is tough to say the least. But demonising the sector is short sighted: the problem is not going to simply disappear. The way forward, argues Mickaël Daudin, is to engage with on the ground operations to support operating practices, and ultimately, the level of formalisation.
Thank you to our sponsor, the German Federal Ministry for Economic Cooperation and Development, through BGR. Until next time, so long!