Conflict Implications of Rising Cobalt Demand and the Effects of Classifying Cobalt as a Conflict Mineral on the DRC
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As the world pushes towards renewable energy, the demand for critical minerals is predicted to see unprecedent levels of growth. One of these minerals is cobalt, a mineral needed for electric vehicles and battery storage. The largest cobalt reserves in the world are in the Democratic Republic of Congo where cobalt mining is closely related with human rights abuses and atrocities. In the wake of the energy transition, NGO’s and other corporations are pushing for cobalt to be considered a conflict mineral. The literature on this topic, however, suggests that the mechanisms by which natural resources interact with a state are more complex than being given credit. Although armed conflict and human rights violations are related, they should not and cannot be effectively addressed with the same policies. The labeling of cobalt as a conflict mineral suggests that it is directly used by armed groups to fund violence, and this legal definition would mean inclusion under supply chain transparency programs like Dodd-Frank. Furthermore, calling cobalt a conflict mineral leads many companies to treat it as such, despite the legal classification. Current data shows, however, that there is little evidence of armed groups vying for control of cobalt mines, utilizing the existing labor force in these mines, or selling cobalt for profit like is evident in Eastern Congo with other conflict minerals. The Congolese government is also seeking to monopolize the cobalt industry and push out artisanal miners, contributing to calls to classify cobalt as a conflict mineral. As seen in a comparison to Chile’s copper mining industry, however, quality institutions play a key role in reducing rent seeking and promoting a healthy mining sector, particularly the healthy relationship between state owned mining companies and private/foreign investors. Any external supply chain due-diligence efforts will face difficulty without also focusing on the underlying internal issues present in the DRC’s national treatment of this resource. The inclusion of cobalt under conflict minerals legislation also does not address the fundamental issues driving the human rights abuses in cobalt mining, which is the primary reason for the labeling in the first place.