Tesla’s CEO said he would address the company’s issues with child labor in its supply chain. But his high-tech solution falls short of addressing labor activists’ concerns.
By Alan OhnsmanForbes Staff
LLast year, just after Tesla’s board and investors rejected a proposal to hire an outside monitor to ensure the electric-vehicle maker’s cobalt suppliers weren’t using child or forced labor in mines in the Democratic Republic of Congo, Elon Musk pledged to do just that — and more.
“I heard a question about cobalt mining and you know what? We’re going to do a third-party audit,” the world’s richest man told a crowd of cheering and excited shareholders at Tesla’s annual general meeting in May 2023. “We’re actually going to put a webcam on the mine. If anyone sees any children, please let us know,” he said with a laugh.
But Forbes A year later, the webcam Musk promised has failed to materialize as planned. Instead of a live stream, Kamoto Copper Co., Tesla’s main source of cobalt, posts a single photo each month of the vast mining complex in southern Congo, taken by an Airbus satellite orbiting high above Earth. There are no children in it, but that’s because the resolution isn’t nearly high enough to reveal anything other than processing facilities and the disfigured landscape of a highly industrialized open-pit mine.
Tesla also says it has undergone several independent audits of labor conditions at Kamoto, which is owned by global mining giant Glencore, according to its latest environmental impact report. “Our direct suppliers are subject to third-party audits to ensure that no child labor is occurring in these mines and that no materials from unauthorized sources enter our supply chain,” the company said. “Four audits were conducted in 2023 and found no instances of child labor at our direct supplier sites.”
But neither the monthly satellite imagery nor third-party analysis addresses the current problems with cobalt and copper mining, according to Courtney Wicks, executive director of Investor Advocates for Social Justice. She represented the Tesla shareholder group last year that tried to get the company to adopt stricter cobalt sourcing guidelines by 2023.
“Taking one photo a month is not really a complete plan,” Wicks said. ForbesTesla’s measures “are not even worth mentioning. Their effectiveness is simply not sufficient at this point.”
“Taking one photo a month isn’t really a complete plan.”
That’s because the problem isn’t primarily what’s happening at the Kamoto mining complex, but at nearby, unregulated mines, said Michael Posner, a professor at New York University’s Stern School of Business and director of New York University’s Center for Business and Human Rights.
Artisanal miners carry bags of ore at an artisanal mine near Kolwezi in the Democratic Republic of Congo in 2022.
JUNIOR KANNAH/AFP/GETTY IMAGES
According to a new study with the Geneva Centre for Business and Human Rights, approximately 40,000 people under the age of 18 work or are present in artisanal and small-scale mining (ASM) in Congo. Children are often there “because their families do not have access to childcare. Older children also work in ASM because families need additional income,” the study says.
“To monitor what’s happening in a mechanized mine is to ignore the core problem, which is that a significant percentage of cobalt comes from artisanal mines,” Posner said. Cobalt from these small-scale mines is sold to traders and mixed with metal from industrial mines like Kamoto. But Tesla doesn’t monitor them at all, “and that’s the problem,” he said.
Another complicating factor: Congo’s cobalt is shipped to China for refining, making it even harder to ensure it didn’t come from an artisanal mine. “By the time it gets into a battery in the U.S. or Europe, it’s all been mixed together somewhere in China,” Posner says.
Neither Elon Musk nor Tesla responded to requests for comment on the matter. Glencore declined to comment.
“Monitoring what happens in a mechanized mining site ignores the central problem, which is that a significant percentage of cobalt comes from artisanal mines.”
The gap between Musk’s promised cobalt actions and the company’s actual actions is not unusual for a billionaire entrepreneur who has made bold promises and failed to deliver (from Tesla’s factory safety and automated driving features to plans to create an “ecological paradise” at the company’s Austin factory).
Cobalt is a key component of the batteries Tesla makes for its electric vehicles. Combined with copper, the substance acts as a stabilizing ingredient in the cathodes of lithium-ion batteries, improving energy density. Congo is the main source, accounting for about 70% of the world’s cobalt. Although cobalt currently sells for about $28,000 per ton, less than half its price two years ago, mining it remains lucrative. Batteries containing it are used in everything from iPhones to laptops to electric cars. While Elon Musk’s company is not the largest consumer of cobalt, its leadership in the electric vehicle sector has made it a prime target for child labor and human rights activists.
Third-party audits of the Kamoto mining complex also do not address issues related to the use of child labor and forced labor, Wicks said. That’s because these inspections appear to be scheduled, not random events, and don’t take place at night, when problems are more likely to be detected.
“The lack of standards and the lack of transparency on how they are executed is our main concern,” she said. “It looks good in a sustainability report, but for investors who care about this issue and see it as a material risk, how effective are these audits?”
Trucks load bags of cobalt at an industrial mine in the Democratic Republic of Congo.
ARLETTE BASHIZI/THE WASHINGTON POST/GETTY IMAGES
Using cobalt for cutting
Tesla says it is working to reduce the amount of cobalt it uses by gradually switching to new chemistries for its batteries. It is also recovering and recycling more of the metal to use in new battery packs. In 2023, the company said it recycled 117 tons of cobalt. Musk has said that cobalt makes up only 3% of the weight of a Tesla battery and that his goal is to eventually stop using it. The lithium iron phosphate chemistry that Tesla has started using in its batteries does not contain cobalt.
Tesla hasn’t provided recent details on how much cobalt it uses each year. But Benchmark Mineral Intelligence, which tracks demand for metals used in battery production, believes the 3% figure remains essentially accurate, largely because the price of cobalt has fallen by more than half in the past two years.
“Although cobalt consumption is slowly decreasing per unit, overall consumption is increasing due to increased vehicle sales”
“Reducing cobalt content in cells has become less of a priority for many cell and automotive manufacturers due to lower prices related to the current oversupply in the cobalt market,” said Caspar Rawles, chief data officer at Benchmark. “While cobalt consumption is slowly declining on a per-unit basis, overall consumption is increasing due to increased vehicle sales, which far outweighs any reductions at the cell level.”
In a study on cobalt mining co-authored with the Geneva Centre for Business and Human Rights, Posner and his co-authors argue that the best way to reduce labor problems in artisanal mines is to formally recognize the role these operations play in the supply chain and work to improve their conditions.
“Rather than ignoring it and pretending it’s not their problem, they need to say this is part of our supply chain too and we’re going to do what it takes to make sure there’s a process to formalize these sites so that children are not there and people are working in safe conditions,” Posner said.
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