Articles of our Experts

When good intentions meet complex realities: Traceability and due diligence of metals


We are all aware that the energy transition and green technologies require metals, such as cobalt and lithium, in batteries, display screens, and other consumer items. However, some of these metals are produced under conditions we find difficult to accept.

For instance, revenues from sales of the metals have been financing arms used in civil wars and by terrorists, the exploitation of mine workers and children who should be in school, and the degradation of the environment. As consumers, we would like to be assured that such conditions are not tolerated and that products do not contain metals produced in this way.

Promoting better practices in an intricate industry

Governments, the industry, and civil society organisations have undertaken several initiatives over the past decade to ensure the traceability of metals and to promote better practices in mining. All the initiatives have the common goal of influencing actors in the supply chain and making them comply with a set of standards. These standards may be one-dimensional: a description of the efforts employed to determine the mine or location of the origin of “conf lict minerals”, for instance; or they may cover a wide range of social and environmental aspects. These standards may be contained in government regulations or be voluntary undertakings.

Large-scale industrial mining companies can be influenced through regulation and public opinion. This is not to say that some companies do not take advantage of lax enforcement. As a rule, however, it is risky for companies not to follow regulations and standards since they can be prosecuted and are sensitive to reputational risk. They must obtain credit, and their shareholders may be reluctant to provide them with capital if they are seen as breaching industry norms. As such, regulators, civil society and public opinion have significant leverage with large companies.

Since miners are poor, they are also more exposed to risks such as armed conflict, environmental degradation, and forced labour. Artisanal mining has therefore become a focus of traceability and due diligence initiatives.

However, large companies often interact with artisanal mining1. Artisanal miners often work in the informal sector, sometimes illegally, in the sense that they do not have formal titles to the deposits they are exploiting. This means that they are difficult to regulate. They have usually been attracted into artisanal mining by poverty and lack of other alternatives. Artisanal mining may be the most important rural non-agricultural activity in Africa2. Since miners are poor, they are also more exposed to risks such as armed conflict, environmental degradation, and forced labour. Artisanal mining has therefore become a focus of traceability and due diligence initiatives.

Experiences in the Democratic Republic of the Congo (DRC) can throw some light on the effectiveness of the various initiatives. Artisanal miners in eastern DRC supply about a third of the world’s tantalum, an essential ingredient in capacitors for mobile phones and personal computers3. Armed groups prey on the miners and appropriate part of their income. Two important legislative initiatives in the United States and the European Union4, respectively, aim to reduce the influence of the armed groups by requiring downstream companies to declare the origin of the tantalum they use (as well as gold, tin and tungsten).

South-eastern DRC supplies most of the cobalt used in electric vehicle batteries worldwide5, of which artisanal miners produce a large share. Since there are insufficient areas open to artisanal mining, many miners work on large mining companies’ concessions, often without permission. Several schemes intend to reduce environmental degradation and social ills, such as child labour in cobalt mining, by asking mining and downstream companies to carry out due diligence on the source of any cobalt they acquire. But do the traceability and due diligence schemes work?

Practical challenges of implementing traceability and due diligence schemes

First, there are some technical complications. Indeed, a rock containing cobalt is mixed with other similar rocks and then has to be chemically processed to be incorporated into a battery and finally installed in a vehicle. During this process, it is usually traded between several countries. As a result, it is almost impossible to identify the origin of the cobalt in the battery.

Second, while consumers have heard about “blood diamonds”, which led to reduced demand for diamonds in general, they are less informed about products containing cobalt or tantalum, and how to avoid them. This means that there is less pressure from consumers to have producers conform to standards.

Some initiatives have had positive results, but they seldom go beyond the pilot stage due to the lack of sustained financing and monitoring.

Third, actors in the supply chain, mining and processing companies, find themselves carrying out complex tasks for which they could be better equipped, such as judging the extent and nature of child labour. From the point of view of downstream processors, the easiest way out is to avoid controversial origins altogether, which does not solve the problems. Trusting governments to carry out due diligence is not a realistic solution either: if the governments in question had the capacity to deal with the challenges, then these problems would probably not arise in the first place. Also, non-governmental organisations rarely have the resources necessary for long-term commitments.

Fourth, problems differ from one artisanal mining area to another, and any particular scheme will not fit all circumstances.

More fundamentally, we have to ask if the initiatives have solved the problems they were created to solve.
With respect to conflicts in eastern DRC, the answer, unfortunately, seems to be “no”. It is sufficient to go through the regular reports of the United Nations Group of Experts6 to realise that conflict minerals legislation has had little effect on violence.

Regarding other aspects, such as child labour, the answer is similar: practical difficulties have proved overwhelming. Various schemes have produced encouraging results, but they are limited in time and space and tend to be effective only within their own narrowly defined criteria7.

Does this mean that nothing can be done and that we must accept child labour, the exploitation of mine workers, forced labour, environmental degradation and the financing of terrorism as inevitably associated with artisanal mining of energy transition metals? No, some initiatives have had positive results, but they seldom go beyond the pilot stage due to the lack of sustained financing and monitoring. More resources must be committed over the long term, but donor interest has been limited. Schemes also have to be designed to solve the problems important to the miners themselves. Otherwise, they are unlikely to be enthusiastic about engaging in somebody else’s projects. In the DRC, for instance, this means access to more land for artisanal miners and better support from donors and authorities. The problems associated with artisanal mining will not disappear because somebody decrees what miners can and cannot do. Support to enable them to do the right thing is necessary.

Leaders and actors in the field of commodity trading must be aware of these challenges and the many ways and leverage available to overcome them. The training of professionals has then a crucial role to play. Created in 2008 in collaboration with the Swiss Trading and Shipping Association (STSA) and the major companies in Commodity trading, the executive education programmes in Commodity Trading of the University of Geneva address this specific need by training professionals for careers in commodity trading through a 360-degree vision of the industry. The programmes build on the insights of industry experts and are continuously updated to consider the manifold changes and challenges of the commodity industry while taking advantage of the proximity of Geneva’s global commodity trading hub.

[1] An artisanal miner is a miner who is not officially employed by a mining company but works using their own resources, usually with simple non-mechanized methods.

[2] Hilson, G., Mondlane, S., Hilson, A., Arnall, A. and Laing, T. (2021). Formalizing artisanal and small-scale mining in Mozambique: Concerns, priorities and challenges. Resources Policy 71.

[3] United States Geological Survey (2022). Mineral Commodity Summaries. Tantalum.

[4] Section 1502 of the Wall Street Reform and Consumer Protection Act (the Dodd Frank Act), and Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017.

[5] United States Geological Survey (2022). Mineral Commodity Summaries. Cobalt.

[6] UN Security Council (2021). Final report of the Group of Experts on the Democratic Republic of the Congo. S/2021/560.

[7] Mancini, L., Eslava, N.A., Traverso, M., and Mathieux, F. (2021). ‘Assessing impacts of responsible sourcing initiatives for cobalt: Insights from a case study.‘ Resources Policy 71, 102,015

This article has first been published in the NewSpecial Magazine (February 2023 edition)