Chinese companies that buy cobalt from the Democratic Republic of Congo and supply mobile-phone and laptop makers such as Apple and Samsung aren't fully checking their suppliers and may be acquiring the mineral from mines that rely on child labour, Amnesty International has said.

Congo, the world's biggest cobalt producer, mined an estimated 67,735 metric tons of the material last year. While the majority was from industrial operations, as much as 20 per cent may come from artisanal mines in the southeastern Katanga region, where adults and children work in dangerous conditions, Amnesty and African Resources Watch, a Congolese non-governmental organisation, said Tuesday in a report.

Amnesty said Apple didn’t directly answer its questions about purchasing components containing cobalt processed by the main Chinese supplier. The company is evaluating “dozens of different materials, including cobalt, in order to identify labour and environmental risks as well as opportunities for Apple to bring about effective, scalable and sustainable change,” it told Amnesty. Apple declined to comment further when contacted by Bloomberg.

Mission ‘Impossible’

Samsung Electronics directed requests for comment to Samsung SDI, its battery supplier. SDI, told Amnesty it doesn't do direct business with the major Chinese suppliers mentioned in the report and that they aren't in its supply chain. Samsung acknowledged it is supplied by another company identified by Amnesty's researchers, but said it was "impossible" to determine if the cobalt it receives comes from the Katanga mines, according to Amnesty.

“For all suppliers, Samsung SDI conducts written evaluations and on-site inspections in areas such as human rights, labour, ethics, environment and health and safety on a two-year basis and awards them with certification,” SDI said in response to questions from Bloomberg.

The investigation “exposes the need for transparency, without which multinationals can profit from human-rights abuses like child labour without checking where and how the raw materials in their products are mined,” Amnesty said.

Cobalt Producer

A major buyer of cobalt from the country’s artisanal mines is Congo Dongfang Mining (CDM), a unit of Zheijang, China-based Huayou., one of the world’s largest manufacturers of cobalt products. CDM processes the ore into crude cobalt hydroxide at a plant in Lubumbashi in Congo before exporting to battery-component manufacturers in China and South Korea. The company exported 3,561 tons of cobalt hydroxide in 2014, Congolese government statistics show.

As “CDM and Huayou Cobalt are at a critical point in the supply chain,” there is a “high risk” that Huayou Cobalt is buying and subsequently selling the mineral from “mines in which children and adults work in hazardous conditions,” Amnesty said.

Huayou is aware of Amnesty’s report and needs more time to respond, a company official who declined to be identified in line with policy said by phone on Monday.

Careful Selection

Huayou has faced similar allegations before. In 2008, Bloomberg reported that the company’s smelter in Lubumbashi was buying cobalt mined by children at illegal sites. Huayou told Amnesty and African Resources Watch that after that report it decided to stop acquiring directly from miners and to purchase cobalt only from licensed traders. Huayou said it carefully selected these suppliers and had developed a code of conduct that obliged each supplier to ensure children are not involved in the mining process, according to Amnesty.

Amnesty and African Resources Watch say that Huayou's due diligence efforts are inadequate and that illegally mined cobalt continues to enter the company's supply chain. Huayou supplies cobalt to battery manufacturers in China and South Korea, who in turn sell batteries to some of the world's largest electronics companies including Apple, Samsung and Microsoft, Amnesty and Afrewatch said, citing public records.

Microsoft’s media relations team in Johannesburg didn’t immediately respond to phone messages seeking comment. The company told Amnesty that it purchased a “very limited number” of batteries from suppliers identified in the report. It said that it didn’t trace the origin of cobalt used in Microsoft products because of the complexity and resources required.

There are as many as 150,000 artisanal miners in the Katanga region. Congo’s 2002 Mining Code stipulates that such mining can only take place in designated zones by registered miners. The failure of the government to assign sufficient areas has led to an increase in illegal mining at unauthorised sites, Amnesty said.

Congo's government isn't doing enough to regulate such mining or protect workers and in some cases is benefiting from the illegal operations, the rights groups said, citing interviews in the Katanga region in April and May. Government spokesman Lambert Mende referred questions to the Ministry of Mines, whose cabinet director, Valery Mukasa, said he hadn't seen the report and didn't have enough information to comment.

Voluntary standards set by the United Nations and the Organisation for Economic Co-operation and Development provide guidelines for companies to respect human rights in their global operations and responsibly manage supply chains. Companies are not legally required to report how they source their cobalt.

A 2010 law in the US, the Dodd-Frank Act, requires listed companies to publicly report their use of four other minerals - tantalum, tin, gold and tungsten - from Congo and other countries in the region.

Bloomberg