RESPONSIBLE SOURCING

BACKGROUND

As one of the world’s leading traders of metals and minerals, we recognise the potential for adverse social or environmental impacts associated with their extraction, processing and sale. In 2017, we piloted a responsible sourcing due diligence programme in partnership with our suppliers in the Democratic Republic of the Congo (DRC) and in Zambia.  We reported on this in our 2017 Responsibility Report.   

Our responsible sourcing programme embeds our ‘Corporate Responsibility Policy’ and ‘Responsible Sourcing and Supply Chain Expectations’ alongside the recommendations of the OECD’s ‘Due Diligence Guidance for Responsible Supply Chains’ (OECD Guidance).  It incorporates desk-based analysis of our counterparts’ activities and impacts and is backed-up by repeated site-based assessments by experienced Trafigura staff, as well as authoritative third-party assessors. Trafigura is committed to working with its suppliers and partners to mitigate those social and environmental risks identified.

 

CHEMAF

Chemaf is a leading mineral exploration, mining and processing company in the DRC. In July 2017, while exploring a commercial partnership with the company, Trafigura initiated a review, conducted by third-party assessor Kumi Consulting, examining Chemaf’s operations against our responsible sourcing standards. The review examined Chemaf’s operational facilities on the outskirts of Lubumbashi, and incorporated Mutoshi, a then dormant mine in Kolwezi, that Chemaf sought to develop. 

In 2018, Trafigura Group entered into a three-year marketing agreement with Chemaf and its parent company Shalina Resources Ltd for cobalt hydroxide. A component of the agreement provided for Trafigura’s ongoing support to Chemaf in building the company’s ability to manage social and environmental impacts across its operations.

 

PACT PARTNERSHIP

In light of Chemaf’s intention to develop its Mutoshi concession, initially through the appointment of an artisanal and small-scale mining (ASM) contractor, Trafigura engaged internationally respected NGO Pact in January 2018, to support Chemaf in the ongoing maintenance of a responsible mineral sourcing programme in line with Trafigura’s standards.  Trafigura standards included, for example, our:

  • Corporate Responsibility Policy
  • Health, Safety, Environment and Communities (HSEC) Business Principles;
  • Code of Business Conduct;
  • Metals and Minerals Responsible Sourcing and Supply Chain Expectations;
  • Artisanal and Small Scale Mining Expectations for Suppliers.

Pact has extensive experience in working with artisanal miners in challenging environments and is a sector leader in the practical implementation of responsible ASM sourcing. Trafigura’s growing partnership with Pact also extends to leveraging the organisation’s developmental expertise in other localities and relevant to other business relationships.

Conducted in close collaboration with Chemaf and Trafigura, Pact’s pilot intervention at the Mutoshi concession has already yielded important results, including:

  • Strong liaison with government agencies, local stakeholders and mining cooperatives through the establishment of an official ‘ASM committee’.
  • Registration of diggers under formal cooperative structures.
  • Development of a controlled site for ASM production on the Mutoshi concession under close observation by DRC state agents ‘Service for Assistance and Supervision of Artisanal and Small-Scale Mining organization’, Chemaf and two full-time Pact staff.
  • Establishment of standards of operation, health and safety and mineral processing, among others, at ASM sites to ensure security, efficiency and transparency.
  • Development of road and transportation infrastructure to facilitate access to the mine site by ASM workers and a buying station controlled by Chemaf.

 

PRODUCT STEWARDSHIP

On the commencement of the pilot project, Chemaf introduced controls to ensure that any material received from the ASM project at Mutoshi would be handled and processed entirely separately from material originating from Chemaf’s mechanised mines. Thus giving us the ability to cater for the requirements of our customers.

Controls include, for example:

  • Cobalt ore leaves Mutoshi on trucks under tarpaulin that has been secured and tied by tamper-proof metal tags. A cargo manifest is drawn-up prior to departure which is then forwarded to Chemaf’s designated processing facility for verification at point of receipt. 
  • On verification / approval, all Mutoshi material is processed through a dedicated standalone facility, Chemaf’s Usoke Plant.  By contrast, all cobalt ore recovered at Chemaf’s mechanised mines is transported to and processed at Chemaf’s Etoile processing facility.
  • On completion of processing, all cobalt hydroxide produced by Chemaf’s Usoke Plant is bagged and branded according to its processing origin (Usoke).
  • For storage, transport and onward export purposes, Usoke origin product (originally from the Mutoshi ASM project) remains segregated from any other material (e.g. of mechanised mine origin).

 

LOOKING AHEAD

Many challenges remain at the Mutoshi project, and ongoing work will be required to mitigate social and environmental risks.

Pact’s role as a ‘trusted observer’ at the Mutoshi site is crucial to the success of the project – for example by providing risk assessments, on-site technical support and stakeholder engagement, specialised training and support in incident management. 

Assessments conducted by Pact are reinforced on a quarterly basis by Trafigura’s appointment of third-party assessor Kumi Consulting whose mandate it is to scrutinise the project in depth and report back to Trafigura, Chemaf and Pact as well as selected downstream partners.

Trafigura believes that its partnership with Chemaf, Pact and Kumi Consulting provides an important case study in collaboration between the formal mechanised mining sector, subject matter experts and the often marginalised ASM mining sector. 

Trafigura will report annually on the progress of its responsible sourcing programme and, in pursuit of constant improvement, will continue to seek the counsel of authoritative stakeholders such as the OECD and also the World Economic Forum’s Global Battery Alliance, of which Trafigura and Pact are founding members.