Cobalt is one of the key components in production of electrified vehicles and is used in significant quantities in high-voltage batteries for electric vehicles and plug-in hybrids. The challenge facing companies that work with cobalt as a raw material is that risks related to environmental standards and human rights cannot be completely eliminated in cobalt mining.
The BMW Group has now set itself the goal of enhancing the transparency of its battery cell supply chain and exploring options for model projects in the Democratic Republic of Congo.
The BMW Group has been participating in the Responsible Cobalt Initiative (RCI)—together with many other companies and organizations, the government of the Democratic Republic of Congo (DRC) and the Organization for Economic Cooperation and Development (OECD)—since the beginning more than one and a half years ago. The aim of this initiative is to increase transparency and governance, and implement collective measures to overcome social and environmental risks in the cobalt supply chain.
The Responsible Cobalt Initiative was launched in November 2016 by the Chinese Chamber of Commerce for Metals, Minerals & Chemicals (CCCMC) Importers & Exporters, with strong support from the OECD. The OECD is actively engaged in the initiative through its work with a broad coalition of stakeholders in the OECD Responsible Minerals implementation program.
Although cobalt is not termed a conflict mineral, around 50% of global cobalt reserves are locatedin the DRC. Investigations led by Amnesty International in 2016 highlighted linkage of cobalt production in the DRC to child labor. In 2014 approximately 40,000 children worked in mines across southern DRC, many of them mining cobalt, according to UNICEF. The DRC Government has pledged to eliminate this by 2025.
In this context, the BMW Group has decided to take further steps:
The company will increase the transparency of its own cobalt supply chain by the end of the year, by releasing information on smelters and countries of origin for raw materials—even though these smelters are not direct BMW Group suppliers, but companies named as sources by BMW Group suppliers.
The BMW Group is also currently working with an independent partner on a feasibility study to explore to what extent the social and ecological situation can be sustainably improved through model mines for artisanal mining in the Democratic Republic of Congo. The study is specifically evaluating whether local model projects could be implemented with the potential for scalability at a later date.
The BMW Group does not procure any cobalt itself; it only comes into contact with this raw material through the purchase of battery cells, for example. However, we are well aware that growing demand for electric vehicles also goes hand-in-hand with a responsibility for the extraction of relevant raw materials, such as cobalt. As a premium manufacturer—and in the interests of our customers—we aim to establish a transparent and sustainable supply chain that meets the highest standards.—Ursula Mathar, head of Sustainability and Environmental Protection at the BMW Group
The BMW Group currently expects the first steps in verifying a local model project to coincide with the publication of smelters and countries of origin in December 2017.
With the measures it is taking in the battery cell supply chain, the BMW Group is emphasizing its holistic approach to e-mobility—looking at all areas of the value chain in order to drive forward sustainable mobility solutions.