Cobalt isn’t officially a “conflict mineral” of the kind that’s subject to strict reporting requirements under the 2010 Dodd-Frank Act, but a study published Wednesday says companies are treating the metal as if it were.
Increased pressure from non-government organizations and trade associations advocating responsible mining practices is leading many companies to adopt the same supply chain due diligence programs they use for conflict minerals—gold, tin, tungsten and tantalum.
Cobalt is the main raw material in lithium-ion batteries powering cell phones and electric vehicles, and although relatively abundant, mining of the metal is concentrated in the Democratic Republic of Congo. The conflict minerals rule was aimed specifically at depriving Congolese warlords of funds through requiring companies to scrub their supply chains, so the mining of cobalt there could raise the same concerns about proceeds of the metal fueling conflict.
“At the moment, this reclassification is industry-led…but regulatory changes to incorporate cobalt must now be a realistic possibility with the [Organization for Economic Cooperation and Development] leading on expanding supply chain transparency and due diligence to other commodities,” according to a report published on Wednesday by RCS Global, a mineral supply chain due diligence advisory and audit firm.
Cobalt demand is expected to grow in coming years, with metals and mining research firm CRU projecting a deficit in the refined form of the metal from this year, following a seven-year oversupply.
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