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The True Cost Of The Electric Vehicle Revolution

Electric Vehicles

There’s a chance that the iPhone you’re about to get for Christmas contains cobalt mined by a six-year-old. There’s also a chance that that six-year-old has been killed or maimed in the processes of mining in the Democratic Republic of Congo, where the lion’s share of the world’s cobalt comes from. 

Or, maybe, for those whose Christmas lists are more upscale, you’ll be driving around in a new Tesla next week, with a battery containing cobalt from that same mine. 

Our luxuries are necessarily someone else’s sacrifice – and sometimes that sacrifice is the ultimate one. 

The EV and electronics revolutions have come at a steep human cost: a boom in child labor in the DRC as child cobalt miners offer battery makers and Big Tech cheap labor.

That’s the focus of the first-ever lawsuit targeting giant tech firms as end-users of cobalt from mines in which young children have died. 

Having failed to bring down giant miners of cobalt in DRC, such as Glencore, this time lawyers are going after the end users themselves. 

The first reports about child labor in the cobalt mines in the DRC emerged several years ago. And while no one likes to hear that their Tesla, lithium battery, smartphone, or fitness tracker has cost a child his health—or worse, his life—this is the reality of cobalt mining today.

This week, International Rights Advocates filed a lawsuit against Tesla, Apple, Dell, Microsoft, and Alphabet for knowingly benefiting financially from child labor in the DRC. 

The suit was filed on behalf of 13 families whose children died or were seriously injured while mining for cobalt. The suit also seeks damages from miners Glencore and Zhejiang Huayou Cobalt, which supply cobalt to the tech majors and to Tesla.

The DRC is home to 3.4 million tons of cobalt: a grey metal that was once used for making bright blue pigment. Now, cobalt is an essential component of lithium ion batteries. This 3.4 million tons is more than half of all the cobalt in the world. Related: Peter Thiel’s Promised Land For Intellectual Troublemakers

The second-largest cobalt reserves are found in Australia, at 1.2 million tons.

The DRC is also one of the poorest and most politically unstable countries in the world, creating the perfect environment for cheap labor—and even cheaper child labor. With many analysts pegging cobalt to soon slip into a shortage, cheap labor is a crucial advantage—an advantage that has trumped ethics, at least until the media shone a light on the human cost of the EV/Big Tech revolutions.

Carmakers were quick to react, pre-empting a more targeted attack from the media and human rights organizations. Earlier this week, before the news of the lawsuit against Tesla broke, a number of large carmakers formed what they are calling the Responsible Sourcing Blockchain Network. Members include Volkswagen, Ford, Volvo and, the most recent addition, Fiat Chrysler. Interestingly enough, Glencore, which is a defendant in the International Rights Advocates case, is also a member of the network.

"The Responsible Sourcing Blockchain Network is going to help us focus on the problems and give us enough visibility, which we could not do in the past," according to Sai Yadati from IBM, which will power the blockchain network.

Essentially, the network should enable carmakers and their cobalt suppliers to track the metal from the mine to the battery factory and ensure there was no child labor involved in mining it.

The effectiveness of the network, however, only reaches as far as its members. If a mine joins it, the network would track the cobalt produced in it. Smaller mines, however, could still remain under the ethical radar and continue exploiting children. 

In a further effort to distance themselves from the child labor stigma, some carmakers are investing in educational and farming initiatives in the DRC, to provide an alternative to working in the cobalt mines that so often results in death or serious maiming. However, what is moral is often unprofitable, which is how Big Tech and Tesla ended up in court.

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One logical question to ask in the context of cobalt mining is: why keep getting it from DRC when there are reserves elsewhere? Well, because it is cheap and abundant there. Miner wages in Australia—which has the second-largest cobalt reserves—are probably light years away from miner wages in the DRC, where one child laborer who Fortune interviewed last year said he made $9 “on good days”.

Taking care to source your cobalt ethically is certainly the right thing to do for carmakers who plan to transform into EV makers in the future. Yet it is also the more expensive thing to do. Carmakers need the cobalt for EV batteries. Batteries are already the costliest component of an EV, and everyone in the industry is working hard to bring these costs down to make the EVs more affordable and ensure higher sales. Ethical mining is unlikely to bring these costs down: health and safety standards carry their own costs. This, in turn, may compromise future profits.

Of course, there is no question that the ethical sourcing of cobalt or any other battery raw material for that matter is more important than profits. Yet this only holds true from a human, moral perspective. Businesses are not humans and they tend to be motivated by factors other than basic human morality. It will be wonderful to see a responsible car industry that foregoes much of its profits to ensure no children are laboring in the cobalt mines of the DRC. What we may actually see is a car industry scared into foregoing much of its EV profits to ensure it doesn’t end up in court on child labor aiding and abetting charges. In either case, carmakers may have to prepare for higher-for-longer prices for their batteries.

By Irina Slav for Oilprice.com

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