Tesla secures new cobalt deal as it phases out the controversial mineral

Tesla has secured a new cobalt supply deal with mining giant Glencore as it phases out the controversial battery material.

Cobalt is a controversial mineral due to most of it coming from mining operations in Congo, a place that has historically been affected by conflict and corruption, which has resulted in child labor in some mining operations.

Most tech and auto companies using cobalt have taken steps to avoid sourcing from those operations, but it’s a hard thing to track since it changes hands several times before reaching a battery cell.

Tesla is looking to reduce the amount of cobalt needed in its battery cells, but with the massive production ramp-up, it is expected to still need the large volumes of the mineral going forward.

Earlier this year, it was reported that Tesla was looking to secure cobalt from Glencore.

Now Financial Times reports that the deal has been completed and the supply will go to Tesla Gigafactory Shanghai and Berlin:

“Tesla will buy cobalt from Glencore for use in two new car plants in a deepening of ties between Elon Musk’s electric car maker and the Swiss mining group. Glencore will supply Tesla’s new Shanghai Gigafactory and its planned Berlin facility with the metal used in lithium-ion batteries, according to people familiar with the matter.”

Glencore mines most of its cobalt from the Democratic Republic of the Congo (DRC).

In its contracts, Tesla specifies that suppliers use DRC “conflict-free” minerals:

“Tesla’s suppliers are expected to use reasonable efforts to ensure that parts and products supplied to Tesla are DRC “conflict-free,” meaning that such conflict minerals do not benefit armed groups in the Democratic Republic of the Congo.”

Specifically, Tesla requires that the Responsible Mineral Initiative (or similar organizations) certifies its suppliers:

“Tesla expects its suppliers to stay up-to-date with and to use validated conflict free smelters and refiners assessed by the Responsible Mineral Initiative and similar organizations. Tesla performs ongoing due diligence and files annual reports with the U.S. Securities and Exchange Commission in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act.”

Glencore is one of only two miners in the Democratic Republic of the Congo on the list to be certified by the Responsible Mineral Initiative.

Source: electrek

Leave a Reply