Each chapter of our text ends with an Ethical Dilemma, asking students to consider a difficult management decision. Such is the role of OM executives. And we see the issue arise again in the Congo. The Wall Street Journal (Aug. 25, 2023) writes: “The U.S. is turning to a much-criticized source as it races to secure supplies of battery metals to meet the growing demand for electric vehicles. “
To do so, it is homing in on cobalt from the Democratic Republic of Congo’s informal mining sector (called “artisanal mines”), where miners, including children, often work with no safety equipment in dangerous, hand-dug mines. Congo supplies around 70% of the world’s cobalt, a key metal in the lithium-ion batteries used in EVs, with 1/3 of that coming from these mines.
The focus on artisanal mines, long shunned by the West, comes as governments and companies increase efforts to secure greater supplies of battery metals—an area China dominates. China just set export restrictions on two minerals the U.S. says are critical to the production of semiconductors, highlighting the risk of relying on Chinese supplies. Chinese companies have a tight grip on Congo’s cobalt mining industry, refining 3/4 of the world’s cobalt supply and producing about 70% of the world’s lithium-ion batteries.
Unlike metals from major mines, cobalt from artisanal mines isn’t contracted to any particular company. Instead, miners sell their ore to local traders who in turn sell it on to exporting companies and refineries in the global supply chain. As a result, Western companies have faced criticism from consumers disturbed by the link to workers toiling in dangerous conditions in one of the planet’s most impoverished countries.
Hundreds of thousands of people work in Congo’s artisanal-mining sector, far outnumbering jobs at established mines, where the use of heavy machinery means fewer workers are needed. Artisanal cobalt is an “inconvenient truth,” says a Swiss human rights director, since it is nearly impossible to separate artisanally mined cobalt from the larger supply of industrially mined cobalt.
Classroom discussion questions:
- State the “ethical dilemma” and propose a solution.
- What is the status of mining in the U.S. and other nations for cobalt and other “rare earths” and minerals needed for electric vehicles?