U.S. Labor Department Raises Alarm over Child Labor in Battery Minerals

By Anjali Joshi

The U.S. Department of Labor (DOL) has added lithium-Ion batteries to a list of goods made of materials known to produce with forced labor or child labor under a 2006 human trafficking law. This addition was made in a list of goods produced using child labor and/or forced labor published on 28 September, 2022, and DOL focused on risks in the Democratic Republic of Congo (DRC), which accounts for over 70% of the global cobalt production. Many case studies have suggested in the past that mining activities in the DRC involve child labor. This report could be a prelude to trade action restricting battery and/or battery material imports, particularly cobalt or cells with cobalt
from China.

Many case studies have suggested in the past that mining activities in the DRC involve child labor. Child labor is mostly associated with small-scale, “artisanal” mines in the DRC as big mining companies use automated machines and equipment to mine cobalt. However, the DOL reports that cobalt from these artisanal mines is often co-mingled with cobalt produced by larger mining operations at the time of processing, which mostly takes place in China. The U.S. Department of Labor Report could be a prelude to trade action restricting battery and/or battery material imports, particularly cobalt or cells with cobalt from China.

The U.S. Department of Labor Report could be a prelude to trade action restricting battery and/or battery material imports, particularly cobalt or cells with cobalt from China. The Labor Department’s report states that “virtually all” lithium-ion batteries contain cobalt. This statement is incorrect as lithium ferrous phosphate (LFP), a type of lithium-Ion cell chemistry with no cobalt, represents 25-30% of global lithium-ion battery production. LFP is increasingly used for stationary storage applications in the United States. Additionally, to fulfil ESG conditions and produce cost-competitive EVs, several leading automakers like Tesla, Ford, and Toyota have decided to shift towards less cobalt/cobalt-free batteries for their low-range models. As such, the demand for LFP batteries have been increasing tremendously since mid-2021 across the EV sector. And as LFP batteries do not use cobalt, these batteries represent an option for U.S. customers with less trade policy risk.

Despite increasing use of LFP batteries for EVs, and declining share of cobalt content from ternary batteries, cobalt-based Li-Ion batteries still make up the majority of EVs sold in the global market. Even as the United States is focusing on creating a stable and secure Li-Ion battery supply chain, including through incentives for domestic battery material processing, domestic cobalt production would take time to materialize due to lengthy mine construction timelines.

However, if the government puts a ban on the imports of Li-Ion batteries due to child labor issues associated with cobalt mining, it is unlikely that the domestic EV industry would be impacted as domestic EV production is increasingly co-located with battery cell manufacturing. Imported batteries are mostly used for BESS applications and any future bans on lithium-ion imports are likely to affect the domestic battery energy storage sector.

Source: List of Goods Produced by Child Labor or Forced Labor (U.S. Department of Labor)