Increase transparency in the cobalt supply chain and improve supply chain governance.
Cobalt Due Diligence
What is Cobalt?
Cobalt was first used for heat-resistant paints and pigments, e.g. for painting porcelain and ceramics. Today, cobalt is used as an alloying component to increase the high-temperature strength of alloyed and high-alloy steels, as a binder phase in hard metals and diamond tools.
Cobalt steels are used, for example, for highly stressed components that have to withstand high temperatures, such as valve seat inserts in internal combustion engines. Cobalt-based superalloys have historically consumed most of the cobalt produced. The temperature stability of these alloys makes them suitable for gas turbine blades and aircraft engines.
Furthermore, cobalt is used in lithium-ion batteries, which are an essential component of electric cars, among other things. It can therefore be assumed that demand for cobalt will increase significantly in the coming years.
Central problem of cobalt production?
As with many other ores, mining is partly carried out under precarious conditions. Several reports have raised concerns about the social and environmental impacts of cobalt mining, including child labor, modern slavery unsafe working conditions.
It is estimated that in Congo, where a good half of the world's cobalt is mined, around 20% of the cobalt is mined by hand.
Background Information on Cobalt Due Diligence
Legislative regulations - Relevance for Companies - The RMI Reporting Framework
Cobalt reporting is currently not required by any international legislation or regulation. According to the definition provided in the SEC Final Ruling (US Securities and Exchange Commission, 2012), as it relates to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (US Congress, 2010), Cobalt is NOT a conflict mineral.
Companies need to keep pace with the market expectations of customers, investors and non-governmental organizations. Furthermore, companies can thus highlight their corporate responsibility.
For cobalt reporting, you can use the Cobalt Reporting Template (CRT) by the Responsible Minerals Initiative (RMI). The CRT helps you collecting information about the country of origin and the smelters and refiners used.
For your cobalt reporting, you need to examine the supply chain in terms of smelter and refiner usage. To do this, you will need to communicate your company's requirements to your suppliers and collect data using the CRT. Once the data is collected, you need to analyze it to determine the risk level of the smelters and refiners used in your supply chain.
Our software iPoint Conflict Minerals helps you manage these individual steps in a central application along with your Conflict Minerals reporting.