The London Metal Exchange (LME) is expected to introduce auditing requirements for listed producers sourcing cobalt from the Democratic Republic of Congo (DRC).
From January, firms that source at least 25% of their cobalt from small or artisanal mines in the DRC will be required to conduct professional audits or face being delisted by LME, the Financial Times reported.
The move is a reaction to concerns over forced and child labour in cobalt supply chains.
Demand for cobalt has soared because of its importance in the batteries that power electric cars, and both technology companies and electric car producers including Tesla have been criticised for not doing enough to ensure their cobalt supply chains are free from labour abuse.
More than half of the world’s cobalt is sourced from the DRC, and Amnesty International estimates 20% of that comes from small or artisanal mines. Artisanal mines carry a particularly high risk of labour abuses, including child labour, because they are usually run by communities or individuals with little oversight or mechanical assistance.
LME is the world’s largest metal trading market and facilitated the trade of 3.5bn tonnes of non-ferrous metals in 2017, worth $12.7tn.
LME told SM it is planning to issue a white paper on the topic in coming weeks.
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