Full Title: No Time to Waste: Governing Cobalt Amid the Energy Transition
Author(s): David Manley, Patrick R. P. Heller and William Davis
Publisher(s): Berkley Law Center for Law, Energy, & the Environment; Natural Resource Governance Institute
Publication Date: March 15, 2023
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Poor governance is limiting the value of cobalt for mining countries. Cobalt’s role in the energy transition depends on better governance. Cobalt is currently a critical input to batteries for electric vehicles and energy storage, demand for which is rising as
energy markets transition away from fossil fuels. However, known reserves of cobalt are limited predominantly to the DRC, which is a risky place to operate given its poor record on corruption, taxation, license security and the welfare of artisanal miners. These constraints may limit mining investment, and harm both the local environment and communities. Consequently, battery manufacturers are seeking to use less cobalt. By improving the security of supply and reducing the harms from mining, authorities in the DRC could lengthen cobalt’s future in the battery industry and strengthen the opportunity cobalt presents for the country.
Improving governance does not require new or specialized policies. Most policy principles that apply to other metals also apply to cobalt. Governments and activists should urgently focus on strengthening transparency, accountability and the practical implementation of existing policy principles. The biggest challenge is the weak uptake of known good practices including around licensing, taxation and anticorruption. Some unique traits of the cobalt industry make it harder for governments to manage cobalt accountably. These include the immaturity of the market and increasingly integrated supply chains which make price reporting opaque. The intense geopolitical focus on cobalt supply will also test governments. Governments need extra support and resources to address these issues. Governments are focusing on adding value to their mineral production by developing processing and other downstream industries.