Tesla is reportedly in talks with mining giant Glencore to secure a supply of cobalt, a controversial mineral used to produce lithium-ion batteries that are used in most electric vehicles today.
Cobalt is a controversial mineral because it comes mainly from mining operations in the Congo, a place that has historically been affected by conflict and corruption, which has resulted in child labor in some mining operations.
Most of the technology and automotive companies that use cobalt have taken steps to prevent the supply of these operations, but it is somewhat difficult to track since it changes hands several times before reaching a battery cell.
Now, Tesla is looking to get his cobalt from Glencore, according to Bloomberg:
“Glencore Plc is negotiating a long-term contract to send cobalt to the new Tesla Inc. electric vehicle factory in Shanghai, according to people familiar with the matter.”
Glencore, the world’s largest cobalt supplier, has been securing long-term contracts with several automakers seeking to expand the production of electric vehicles, such as VW and BMW.
The company obtains its cobalt through its subsidiary Katanga Mining, a company based in Canada that operates a copper and cobalt mine in the province of Katanga in the Congo.
A year ago, Canadian authorities fined Glencore’s Katanga company with more than $ 20 million and banned some of its executives, including billionaire Aristotelis Mistakidis, from serving as director in Canada for cheating investors regarding their relationship with Congolese authorities.
There are several other mining operations that seek to produce more cobalt outside the Republic of the Congo, including in Canada, the United States and Australia.
Some car manufacturers seek to produce their own battery cells and secure minerals directly, while others are involved through the supply chain, but battery cells are being produced by other manufacturers, such as LG Chem and Panasonic.
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As I have often said in the past, ensuring battery supply is a priority to scale the production of electric vehicles and that begins with securing raw materials.
Last year, Tesla warned of the next shortage of battery minerals, such as nickel, copper and lithium that could cause problems for the rapid acceleration of electric vehicle production.
But it is still definitely not a reason to contribute to corruption and potentially even child labor.
Tesla is taking steps to ensure that its suppliers do not participate in these things and publishes an annual “Conflict Minerals Report” to track the effort.
In addition, the company is also looking to reduce the amount of cobalt needed in its battery cells.
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