SWISS-headquartered miner and commodities trading group, Glencore, is to supply cobalt from its Democratic Republic of Congo (DRC) operations to Tesla, the electric car maker owned by controversial entrepreneur, Elon Musk.
Citing people familiar with the matter, the Financial Times said Glencore would supply Tesla’s new Shanghai Gigafactory and its planned Berlin facility. Cobalt is used in the manufacture of lithium-ion batteries.
The deal, which increases Tesla’s reliance on supplies from the DRC, is a boost for Glencore’s cobalt business after a two-thirds slide in the metal’s price over the past two years to about $30,000 a ton, said the newspaper.
While Tesla uses less cobalt than rival electric carmakers, the deal with Glencore could involve up to 6,000 tons a year, it said. Buying from Glencore also allows Tesla to control supply from the mine in the DRC to where it is processed into battery precursor materials in China.
Tesla supports sourcing metals from the DRC on the proviso that the materials “… can be assured … are coming from mines that meet our social and environmental standards”.
In May, Huayou Cobalt, China’s biggest cobalt producer, said it would stop buying from individuals in the DRC owing to pressure from customers and rights groups concerned about child labour in the informal mining sector.
Huayou Cobalt was named alongside technology companies including Apple, Dell and Microsoft in a US class-action lawsuit filed on behalf of families of children killed or injured while mining cobalt in the central African nation.