‘Blood Batteries’ Drive America’s Frantic EV Ambitions


In its rush to secure and build America’s electric car and battery supply chains, the U.S. government is reaching far and wide, splashing out billions in commitments. But desperation leads it astray.

Last week, the State Department quietly released a memorandum of understanding it signed in December to support a commitment between the Democratic Republic of Congo, or DRC, and Zambia to build a “productive supply chain, from mine to assembly line.” In theory, the agreement is intended to drive investment and ensure that the private sector has a “level playing field” in projects.

It turns to Africa for obvious reasons: an abundance of raw materials. Almost 70% of the world’s cobalt – a key ingredient in certain types of batteries – is mined in the DRC, where almost half of the world’s reserves are located. Zambia is one of the largest producers of copper, which is 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 revealed in the State Department’s country report. The press release announcing the memorandum of understanding left it as “corruption,” noting that it “committed to respecting international standards to prevent, detect and take legal action to fight corruption throughout this process.”

The move is hypocritical. Now that the US needs cobalt and copper as part of its supply chain push, it is willing to step in and encourage private investors to work in the DRC, overlooking one of the main problems there.

Worse, it comes after strong criticism surrounding China’s alleged violations. The US Department of Labor put solar polysilicon from Xinjiang province on a 2022 list(1) of goods produced by child 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 persistent” and said “the goods produced under these conditions have no place in the American economy.”

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The US then proceeded to ban goods from the western Chinese province and was willing to take strong measures – all because it saw the country as a strategic threat. In 2021, a proposed amendment to the US Innovation and Competition Act (titled “Securing America’s Strategic Metals and Minerals Supply Chains”) expressed concern about Chinese control.

That does not seem to apply to the DRC – an unstable country in a volatile region. A rebellion in the eastern part has displaced over 450,000 people. That makes cobalt the blood diamond equivalent of batteries.

The United States has for several years committed foreign aid to the DRC for economic support and health programs of about $250 million to as much as about $300 million annually. It renewed its development cooperation agreement, securing $1.6 billion over the next five years. All noble, but by no means a sound way to secure cobalt and copper resources and boost industrialization there. Setting terms and conditions for the support would be one place to start.

The abuses associated with cobalt are not peripheral problems. Mercedes-Benz AG, for example, goes to great lengths to disclose its use to ensure transparency. The automaker assesses and audits its battery cell suppliers to prevent child and forced labor. Agreements to purchase these parts require disclosure from the entire cobalt supply chain. Even Tesla Inc. CEO Elon Musk, who a few years ago came under heavy criticism for the use of the battery material in his company’s vehicles, has completely moved away from the decisive element.

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Trying to secure cobalt supplies and increase its importance, along with encouraging private investment to enter the DRC, is misguided.

The approach highlights the deeper flaws in America’s botched attempt at industrial policy. It has largely been focused on its foreign affairs, not on what is actually possible or useful domestically. If it wants to register for the goods it now needs, then it should decide who it wants to trade with and on what terms.

What’s more, cobalt’s days may be numbered. With all the complex supply issues surrounding it, companies are increasingly moving away from the element and the types of batteries it goes into. The use of lithium iron phosphate has continued to rise sharply as manufacturers scale up the safer chemistry, which is cleaner to produce, with almost 30% lower emissions. This is part of the reason why demand for cobalt in power packs is expected to decline sharply over the next 10 years. Therefore, it is difficult to imagine that companies will have to double.

The State Department’s MoU states that the commitment benefits climate change and will move toward limiting temperature increases to 1.5 degrees Celsius, which “helps the international community reduce emissions.” Laudable motives, however, no one has begun to question what the multi-billion dollar factory building boom in the US to produce batteries will mean for greenhouse gases. (I’ll get to that in a future column). Research has shown that cobalt-containing cathodes are the major contributors. It may be worthwhile for the United States to invest in improving viable, cleaner technologies.

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It’s easy to lash out and take the higher moral ground with China or Elon Musk and his big, private sector buddies. Harder to be introspective, isn’t it?

More from Bloomberg Opinion:

• The Gaps in America’s China-Style Electric Car Policy: Anjani Trivedi

• Climate struggle emerges as a geopolitical power game: Liam Denning

• Glencore’s big play avoids US sanctions: Chris Bryant

(1) The Bureau of International Labor Affairs, or ILAB, maintains a list of goods and their source countries that it has reason to believe were produced by child labor or forced labor in violation of international standards, as required under the Reauthorization for the Protection of human trafficking. Act (TVPRA) of 2005 and subsequent re-authorisations. ILAB maintains the list primarily to raise public awareness of forced and child labor around the world and to promote efforts to combat it; it is not intended to be punitive, but rather to serve as a catalyst for more strategic and focused coordination and cooperation among those working to address these issues.

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

Anjani Trivedi is a Bloomberg Opinion columnist. She covers industries including policies and companies in the machinery, automotive, electric vehicle and battery sectors in the Asia Pacific region. Previously, she was a columnist for the Wall Street Journal’s Heard on the Street and a finance and markets reporter for the paper. Before that, she was an investment banker in New York and London

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


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