‘Blood Batteries’ Drive America’s Frantic EV Ambitions


In the rush to secure and build America’s electric vehicle and battery supply chain, the US government is reaching far and wide, spending billions in commitments. But desperation has led astray.

Last week, the State Department quietly released a Memorandum of Understanding signed in December to support the commitment between the Democratic Republic of Congo, or DRC, and Zambia to build a “productive supply chain, from mines to assembly lines.” The agreement, in theory, is meant to encourage investment and ensure the private sector has a “level playing field” on projects.

It is heading to Africa for an obvious reason: Abundance of raw materials. Almost 70% of the world’s cobalt — a key ingredient in some types of batteries — is mined in the DRC, where nearly half of the world’s reserves are located. Zambia is one of the largest producers of copper, used for other important components. The US also imports copper from the DRC, the third largest producer of the metal.

However, the US government conveniently failed to mention that cobalt from the Congo has been at the center of child labor abuses, as the State Department’s report stated. The press release announcing the MoU was left on “corruption,” stating that it is “committed to respecting international standards to prevent, detect, and take legal action to fight corruption throughout this process.”

The steps are hypocritical. Now that the US needs cobalt and copper as part of its supply-chain push, it is willing to enter the business and urge private investors to work in the DRC, looking at one of the most important problems there.

To make matters worse, it comes after strong criticism of China’s alleged violations. The US Department of Labor placed diesel-grade polysilicon from Xinjiang province on its 2022 (1) list of goods produced by slave or forced labor – along with cobalt from the DRC. In the report, US Labor Secretary Martin Walsh called the abuses in the Chinese region “egregious, systemic and ongoing” and said that “goods produced under these conditions have no place in the US economy.”

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The US continues to ban goods from western Chinese provinces and is willing to take strong action – all because it sees the country as a strategic threat. In 2021, an amendment to the US Innovation and Competition Act (titled “Securing the Supply Chain of the United States’ Strategic Metals and Minerals”) expressed concern about Chinese control.

That doesn’t seem to apply to the DRC – an unstable country in an unstable region. The rebellion in the eastern part has killed more than 450,000 people. That makes cobalt the same as blood diamonds in batteries.

The US has for several years, given foreign aid to the DRC for economic support and health programs of about $250 million to $300 million annually. It renewed the development cooperation agreement and ensures $1.6 billion dollars in the next five years. All noble, but not the right way to secure cobalt and copper resources and boost industrialization there. Putting terms and conditions on the aid would be a place to start.

The abuses associated with cobalt are not peripheral problems. Mercedes-Benz AG, for example, is very willing to disclose its use to ensure transparency. The carmaker assesses and audits its battery cell suppliers to prevent child labor. The agreement for procuring this part requires disclosure from the entire cobalt supply chain. Even the CEO of Tesla Inc. Elon Musk, who was heavily criticized a few years ago for the use of battery materials in his company’s vehicles, has avoided a very important element.

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Attempts to secure cobalt supply and increase its importance, and to encourage private investment to enter the DRC, are misguided.

This approach highlights a deeper flaw with the US’s failed attempts at industrial policy. It is largely focused on its foreign affairs, not on what is actually possible, or helpful, domestically. If it wants to register the items it currently needs, then it must take a stand on who will do business and what the terms are.

What’s more, cobalt’s days may be numbered. With all the complex supply issues around it, companies are increasingly shifting away from the elements and types of batteries it goes to. The use of lithium iron phosphate has continued to rise sharply, because factories scale up safer chemicals that are cleaner to produce, with almost 30% lower emissions. That’s part of the reason why demand for cobalt in powerpacks is expected to drop sharply in the next 10 years. That’s why it’s hard to imagine the company doubling.

The State Department MoU said the commitment was for the greater good of climate change and would limit temperature increases to 1.5 degrees Celsius, which would “help the international community reduce emissions.” With laudable motives, however, no one has begun to question what the multi-billion dollar factory building boom in the US to produce batteries means for greenhouse gases. (I’ll get to it in the next column). Research shows that cobalt-containing cathodes are the biggest contributors. It may be worth it for the US to invest in improving viable, cleaner technology.

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It’s easy to lash out and walk the moral high ground with China, or Elon Musk and his big, private peers. It’s harder to be introspective, isn’t it?

More From Bloomberg Opinion:

• The holes in America’s China-Style EV Policy: Anjani Trivedi

• Fighting the Climate arises as a Geopolitical Power Play: Liam Denning

• Great Glencore Play Avoids US Sanctions: Chris Bryant

(1) The Bureau of International Labor Affairs, or ILAB, maintains a list of goods and their countries of origin that they have reason to believe were produced by child labor or forced labor in violation of international standards, as required by the Trafficking Victims Protection Authorization. Act (TVPRA) of 2005 and subsequent reauthorizations. ILAB maintains the List mainly to increase public awareness about forced labor and child labor around the world and to promote efforts to combat them; it is not intended to be punitive, but rather serve as a catalyst for more strategic and focused coordination and collaboration among those working to address this problem.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Anjani Trivedi is a Bloomberg Opinion columnist. He covers industries including policy and firms in the machinery, automotive, electric vehicle and battery sectors across Asia Pacific. Previously, he was a columnist for the Wall Street Journal’s Heard on the Street and a financial & markets reporter for the paper. Before that, he was an investment banker in New York and London

More stories like this are available at bloomberg.com/opinion


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