Tesla’s New Glencore Deal Raises Concerns for Africa’s Cobalt Supply
- Electric vehicle giant Tesla has signed a huge cobalt contract with the mining company, Glencore, even though it says it’s in the process of cutting-off its use of the divisive mineral.
- The mineral is to be sourced from the Democratic Republic of Congo, which is the source of two-thirds of world’s cobalt.
- It’s likely that Glencore and Tesla’s latest cobalt deal could slow down the future stability of Africa’s sustainable cobalt supply.
Electric vehicle giant Tesla has signed a new cobalt contract with Glencore, a British multinational commodity trading and mining company, even though it is presumably in the midst of wiping out its use of the divisive mineral.
In order to make lithium-ion batteries at the Gigafactories in Berlin and Shanghai, Tesla wants the mineral sourced from the Democratic Republic of Congo, which boasts two-thirds of world’s cobalt supply and houses Glencore’s largest mine for the mineral. It’s likely that Glencore and Tesla’s latest turbocharged battery deal could slow down the future stability of Africa’s sustainable cobalt supply.
Tesla’s CEO Elon Musk said in a Tweet in 2018, “We ‘re using less than 3% cobalt in our batteries and we’re going to use none in next generation.” This assertion now seems to be very deceptive due to the amount of cobalt required in Tesla battery cells along with their huge build.
READ ALSO: Toyota Invests $400m in Flying Car Company, Joby Aviation
The United States Geological Survey reveals that the Democratic Republic of Congo accounted for around 64 per cent of the world’s mined cobalt production last year.
Tesla is projected to still need large volumes of the DRC’s mineral in the future and the new Glencore deal will help them achieve this, as it will ensure the delivery of up to 6,000 tons of cobalt a year under the partnership which is expected to last for a long time.
Cobalt has a variety of industrial uses such as alloy, glass, lithium-ion batteries and a lot more. The strengthened relations between Musk’s electric car manufacturer and Glencore will help the mining company get up to speed, as cobalt which was expected to be part of its competitive edge as the world transitions to electric cars, has become more of a liability.
Cobalt rates have fallen to around $25,000 in 2019 from over $60,000 per ton in late 2018. However, Darton Commodities forecasts cobalt use in batteries is going to rise from 50,000 tons in 2016 to more than 320,000 tons by the year 2030.
Tesla is ensuring that cobalt doesn’t become the major for its Asia expansion plans, because it already uses cobalt from Glencore in its Shanghai Gigafactory.
The Congolese government, however, has increased its tax on exports of Cobalt by 50 per cent and is considering labelling the metal as a strategic resource. This will raise Cobalt’s royalty from 2% to 10%, making it more costly to use in its products for companies like Tesla. A Morgan Stanley study estimated that there will be as many as 1 billion electric vehicles on the road worldwide by 2050.
Several tech and automobile companies that use cobalt have put measures in place to avoid sourcing from cobalt mines that rely on child labour, but it is hard to track because the mineral changes hands many times before reaching a battery cell at the end of the supply chain.
Tesla tried to justify how the company sources for cobalt on its blog. Nevertheless, it did not address questions about political uncertainty and the ethical sourcing challenges in Africa. t to mention that the electric vehicle manufacturer, along with Google, Apple and others, has been sued in December by a human rights group regarding the DRC’s crude mining.
WhatsApp’s Latest Feature Allows Accounts Send One-Way Updates to Followers via Channels
Mark Zuckerberg, the CEO of Meta, says WhatsApp has recently introduced a new feature call…