Switching from fossil fuels to electrified transportation is a core strategy in the global effort to combat climate change. The resulting demand surge for cobalt is piling pressure on a vulnerable supply chain. Two thirds of global production is in the DRC, where 20 to 40 percent of cobalt output is produced in the Artisanal and Small-Scale Mining (ASM) sector. Well over 200,000 miners, working in tough, often dangerous conditions, rely on the sector for their livelihoods.
Rather than isolating ASM workers, we want to apply our position as an international trading and logistics company to increase transparency and transform their working conditions. Our pilot project at Mutoshi demonstrates what can be achieved.
In 2018, Trafigura signed a three-year cobalt hydroxide marketing agreement with mining company, Chemaf. As part of this, we undertook to bolster Chemaf’s ability to manage social and environmental impacts in line with international standards.
Chemaf has been developing Mutoshi, a major copper-cobalt mining concession, in the DRC. There are multiple communities on and around the concession that have, for years, been engaging in unofficial, unregulated ASM activity. Rather than attempting to evict these workers, Chemaf has set up a pilot project that supports enhancements to ASM activity so that it can become formalised and ultimately semi-mechanised.
It has appointed Comiakol, a cooperative representing approximately 5,000 workers and authorised by DRC Regulatory Authorities, to operate as a mining contractor on a designated area known as Mutoshi Cobalt. The miners there work in a regulated environment and are able to sell their product at a rate consistently priced off the international market price.
To support this initiative, Trafigura has established a strategic relationship with Pact, an internationally respected NGO and a sector leader in the practical implementation of responsible ASM and semi-mechanised mining (SMM).
Day-to-day, workers are monitored by Chemaf and Comiakol’s Health, Safety and Environment (HSE) team, two full-time Pact representatives as well as representatives of the DRC’s State Regulator for ASM, SAEMAPE (Service for Assistance and Supervision of Artisanal and Small-Scale Mining).
We have commissioned sustainability specialist Kumi Consulting to provide quarterly project reviews that assess performance against our responsibility policies and expectations.
Pact’s involvement, expertise and local presence are crucial. It provides risk assessments, on-site technical support and stakeholder engagement, and specialised training and support in incident management. Trafigura’s interaction with Pact is now extending to other localities and relationships.
The Mutoshi pilot project has yielded important results that are applicable across other business relationships. We are sharing what we have learnt with other stakeholders focused on the complexities of formalising and legitimising partnerships with the ASM sector.