The Washington Post just published an article regarding Tech giants such as Apple and children in cobalt mines in the Congo. The full story is below.
Cruz Capital Corp (CUZ—TSXv, BKTPF—OTCBB, A2AG5M--FSE, North America's foremost cobalt project generator and developer came across this story from African Business Magazine regarding cobalt and the DRC. Cobalt spot price has also moved to yet another year high today. Cruz President, James Nelson, stated, "We continue to expand our cobalt assets at a time when cobalt prices continue to move to year highs. Cruz has been able to acquire, what we feel is one of the best collections of cobalt prospects in North America. Cruz's 4 separate Ontario cobalt prospects, according to government mineral files, returned cobalt grades of 13% on the 900 acre Coleman Cobalt Prospect and 10.5% cobalt on the 900 acre Johnson Cobalt Prospect. The 5500 acre Hector Cobalt Prospect was a past producing cobalt mine and the 1480 acre Bucke Cobalt Prospect returned cobalt grades of 13%. Our War Eagle Cobalt Prospect in British Columbia covers a past producing mine as well and returned assays of 6.5% Cobalt. Based on these projects, management feels that Cruz has amassed a quality portfolio of Cobalt assets that have some of the highest historic cobalt grades in North America, which sets Cruz apart from most cobalt companies in the junior space. We feel that 2017 will be a break out year for cobalt prices and Cruz is well positioned to take full advantage of this. We plan to commence full operations on all of these projects with our goal to make Cruz the "go-to" North American Cobalt project generator and developer. 2017 will be an extremely active year for Cruz and management is optimistic about what will be discovered by Cruz on our cobalt properties."
Here is the full story....
https://www.washingtonpost.com/news/the-switch/wp/2016/12/20/tech-giants-pledge-to-keep-children-out-of-cobalt-mines-that-supply-smartphone-and-electric-car-batteries/?utm_term=.d3083b6c8a64
Separate groups of the world’s leading technology companies are launching two initiatives to curb “the worst forms of child labor” and other abusive practices in the supply chain for cobalt, a key ingredient in lithium-ion batteries that power smartphones, laptops and electric cars.
About 60 percent of the world’s cobalt originates in the Congo, where hand-dug mines rife with dangers attract legions of poorly equipped “artisanal” miners who work for as little as $2 a day.
Apple, HP, Samsung SDI and Sony have joined an effort known as the Responsible Cobalt Initiative. It is being led by a Chinese business group, the Chinese Chamber of Commerce for Metals, Minerals and Chemicals Importers and Exporters, and supported by the Organization for Economic Cooperation and Development (OECD), according to the Chinese group.
Members of the initiative pledged to follow OECD guidelines for mining supply chains, which call for companies to trace how cobalt is being extracted, transported, manufactured and sold. Any abuses would require immediate correction.
Advocacy groups have alleged for years that cobalt was posing deadly risks to miners and causing environmental damage, but eradicating the worst abuses has proved difficult because tracing cobalt in consumer products back to the mines involves global leaps — from Africa to China to world markets — and across many companies.
The Washington Post earlier this year published an investigation detailing abuses in Congo’s artisanal cobalt supply chain, showing how miners — including children — worked in dangerous, at times deadly conditions as they tunneled hundreds of feet underground for dollars a day to reach the precious mineral. The article also showed the potential health effects, including birth defects, that medical researchers have begun to connect to the mining activity. The Post for the first time connected this troubling artisanal cobalt trade with the batteries used by some of the world’s largest technology companies, including Apple.
[Cobalt mining for lithium-ion batteries has a high human cost]
Apple acknowledged that this cobalt has made its way into some of its batteries and said it was committed to working with its supplier to address underlying issues, such as extreme poverty, that result in harsh work conditions and child labor.
The role of the Chinese business organization in the new initiative is considered a key advantage — the bulk of the supply chain runs through that country. Several companies with key roles in refining and packaging the mineral for batteries have joined the initiative, including Zhejiang Huayou, a Chinese company that buys cobalt from Congo miners and was featured in The Post’s coverage.
“The problem cannot be fixed by one company,” said Bryce Lee, Huayou’s new manager for responsible sourcing. "So I think it’s great, surprising even, that so many companies have come together."
The new initiative is “a very positive sign of change, ” said Tyler Gillard, project head for the OECD. “Such strong involvement of Chinese industry in particular is uncommon for these types of initiatives and really exciting.”
Collectively, the group is aiming to promote cooperation with the government of the Congo.
Separately, a business group known as the Electronic Industry Citizenship Coalition has announced the new “Responsible Raw Materials Initiative.”
The EICC said companies need to expand scrutiny of their supply chains beyond the traditional four “conflict” minerals covered by U.S. legislation — tin, tungsten, tantalum and gold. These minerals, when taken from the Congo region, receive extra attention because of potential ties to funding militias.
The EICC said the decision to begin looking at other minerals was motivated by “a growing body of research” — including work by advocacy groups and The Post — that showed abuses occurred in the production of these other minerals, too.
Bob Mitchell, EICC vice president for social and environmental responsibility, said one of the minerals the initiative is considering is cobalt from Congo.
The EICC announced its initiative last month, just before the start of a U.N. forum on business and human rights.
Membership in the EICC includes Apple, Dell, Foxconn, Ford Motors and other companies, and 19 EICC-member companies have signed pledges to support the new initiative, Mitchell said.
Exactly what to do about the artisanal mining of cobalt is a matter of heated debate. The practice is rife with dangers. On the other hand, it also helps desperately poor people make a living, particularly in the rural areas of Congo.
Some long-standing critics of the cobalt supply chain view the Responsible Cobalt Initiative merely as a good first step.
“Implementation is obviously what it’s all about,” said Mark Dummett, an Amnesty International researcher who has studied cobalt supply chains. “We’d now like to see the downstream companies like Apple and Samsung disclose the names of their cobalt smelters as well as disclose the risks they have identified in their supply chains.”
Companies said a collective effort such as this is required to eradicate any abuses in the cobalt supply chain.
“HP recognizes that in order to build leverage over supply chain actors that we do not have a direct business relationship with, we need to work with other companies and organizations to drive collective action,” Jay Celorie, HP's global program manager for human rights, ethics and compliance, said in a statement.
Other companies, such as Tesla and LG Chem, said they are weighing membership in the Responsible Cobalt Initiative or undertaking other ways of ensuring that their supply chains are clean and humane.
“We are evaluating a number of new international initiatives to address the issues in cobalt production and are working quickly to determine how Tesla can be most effectively involved,” Tesla said in a statement.
Other industry groups are responding to complaints about the cobalt supply chain, too.
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Last week, Umicore, a large Brussels-based maker of battery parts and other cobalt products, announced that the auditing firm Pricewaterhouse Coopers had validated the safeguards it has in place to prevent the use of any cobalt arising from questionable environmental or labor practices. Among other things, the company seeks to be able to trace the origins of every bit of cobalt that goes in its products.
Umicore officials said that seeking the third-party validation of their cobalt procedures should ease the concerns of the consumer companies that are their customers. “Our customers have valuable brands to protect,” said Marc Van Sande, executive vice president of a company business unit. This approach “provides comfort to customers about the provenance and the ethical nature of the cobalt used in the materials they source.”
Related stories:
The batteries in your favorite devices are literally covering Chinese villages in black soot
Indigenous people are left poor as tech world takes lithium from under their feet
The deteriorating political situation in the Democratic Republic of Congo (DRC) is likely to fuel stricter regulations on the supply chains of cobalt from the country. The precious mineral is used in the manufacturing of phones, electric cars and laptops.
The DRC is the world’s largest producer of cobalt, accounting for roughly 60% of global production, according to the United States Geological Survey (USGS). However, both international human rights groups and media organisations have in the past revealed that cobalt – which is mainly mined in the unstable eastern region of the country – is largely unregulated, leaving the workers vulnerable to exploitation and poor work conditions.
An Amnesty International report into the DRC cobalt industry revealed that 20% of cobalt production is still mined by hand. Focusing mainly on Kolwezi, the centre of artisanal cobalt mining in the former province of Katanga, researchers documented thousands of Congolese working in unsafe conditions, and serious issues with child labour, pollution of water sources and a widespread lack of basic safety equipment.
The Cobalt produced by some of the informal miners has in the past been sold to Congolese middlemen and purchased in turn by Chinese firms for export to their home country, according to Amnesty International. Once in China the cobalt entered the global market and turned up in multiple sectors.
International regulators have recently called for further scrutiny into the supply chain of DRC-sourced cobalt, and this demand is likely to grow louder due to the worsening political situation in the country.
Political turmoil
The central African country is spiralling into a political crisis over the failure of President Joseph Kabila to step down from office in line with the constitution. The president has engineered a transitional government to give his administration the time it needs to organise fresh elections.
But after violent street protests in September, the UN Security Council has warned that civil war could be about to break out in the country, which has already seen decades of instability in the recent past. A preliminary investigation in October by the UN Joint Human Rights Office of MONUSCO, the UN mission in DR Congo, found government forces responsible for using excessive and lethal force during anti-Kabila demonstrations in the capital, a sign of increasing instability there.
Should the situation worsen, then global manufacturing firms would have to ready themselves against the inevitable regulatory changes that will come into effect.
Growing Pressure for Change
However, there has been a concerted drive to clean up the supply chain of rare minerals mined in developing countries. One such institution is UK-headquartered RCS Global, a firm involved in mineral supply chain due diligence advisory and auditing services.
It reported that there are major compliance risks for manufacturers in the supply chains for DRC-sourced cobalt, and the company has said that there is growing on international regulators to put cobalt in the same category as other ‘conflict minerals’ from the DRC. Currently strict regulations are in place to monitor the supply chain of gold, tin, tantalum and tungsten.
Harrison Mitchell, a Director at RCS Global who helped produce its cobalt report, warns that regulatory changes to incorporate cobalt must now be a realistic possibility for companies. It coincides with the OECD already considering a drive to expand global supply chain transparency and due diligence to other commodities beyond the conflict minerals currently covered in its official ‘Due Diligence Guidance’.
The Gold Standard
The OECD’s Guidance is endorsed by the United States Securities and Exchange Commission, the European Commission and the Chinese CCCMC, and is the template for transparency in global raw material supply chains. It represents the global gold standard for supply chain regulation.
With purchasing companies being held increasingly responsible for their actions of local trading partners or middlemen, manufacturing companies must increasingly prepare themselves for tighter regulation over a wider array of raw materials in the future.
Harrison warns: “The biggest error [RCS Global] see is companies not realising that in the eyes of the OECD Guidance, they are responsible for the conduct of their partners throughout their supply chain right down to the mine.
“Companies like Apple have acknowledged this and are pushing out their due diligence across their supply chains but many others see this as a daunting prospect.”
full article here https://africanbusinessmagazine.com/sectors/commodities/analysis-drc-uncertainty-fuel-tighter-cobalt-regulations/
COBALT PRICES:
Cobalt prices have traded to another year high at $14.63 and is actually trading at 5 years highs in Canadian dollar terms.
ABOUT CRUZ:
Cruz Capital Corp (CUZ:TSXv, BKTPF:USA, A2AG5M:Germany) . Cruz is actively engaged in acquiring and developing Cobalt assets globally. Cruz has acquired numerous high grade cobalt assets located in North America. Seven cobalt projects are in Canada and one in Idaho. The goal of the company is to make Cruz the foremost cobalt project generator and developer on the TSX Venture Exchange. Management feels that cobalt is at the early stages of a significant bull market and we are pleased to be positioning Cruz at the forefront of this cycle.
Cruz President, James Nelson, stated, "We continue to expand our cobalt assets at a time when cobalt prices continue to move to year highs. Cruz has been able to acquire, what we feel is one of the best collections of cobalt prospects in North America. Cruz's 4 separate Ontario cobalt prospects, according to government mineral files, returned cobalt grades of 13% on the 900 acre Coleman Cobalt Prospect and 10.5% cobalt on the 900 acre Johnson Cobalt Prospect. The 5500 acre Hector Cobalt Prospect was a past producing cobalt mine and the 1480 acre Bucke Cobalt Prospect returned cobalt grades of 13%. Our War Eagle Cobalt Prospect in British Columbia covers a past producing mine as well and returned assays of 6.5% Cobalt. Based on these projects, management feels that Cruz has amassed a quality portfolio of Cobalt assets that have some of the highest historic cobalt grades in North America, which sets Cruz apart from most cobalt companies in the junior space. We feel that 2017 will be a break out year for cobalt prices and Cruz is well positioned to take full advantage of this. We plan to commence full operations on all of these projects with our goal to make Cruz the "go-to" North American Cobalt project generator and developer. 2017 will be an extremely active year for Cruz and management is optimistic about what will be discovered by Cruz on our cobalt properties."
Cobalt prices have increased significantly over the past 9 months and appear to be breaking out. We feel that cobalt prices could have the same type of parabolic move like lithium has had. Similar dynamics that have driven lithium prices higher are present in cobalt, and that is why Cruz established itself at the early stages of this sector move securing multiple high grade cobalt projects.
Cruz has recently acquired 8 separate cobalt prospects across North America
The Hector cobalt prospect consisting of approximately 5,500 acres in the Larder Lake mining division of Ontario was mined for cobalt and is a past producer of cobalt. (historic data)
Bucke Cobalt Prospect in the Larder Lake mining division of Ontario returned assays grading 13% COBALT and 240 g/t SILVER (historic Ontario data)
The Johnson Cobalt Prospect in Ontario encountered grab assays over 300m up to 10.5% cobalt, 69 g/t AG, 12% NI and .4% CU (historic data)
The Coleman Cobalt Prospect in Ontario returned grades of up to 13% cobalt and appear to be an extension of the Tretheway veins.(historic data)
The War Eagle Prospect in British Columbia encountered surface samples of 6.41% cobalt, 3.59% nickel and 7.25% copper (historic data)
Cobalt is one of the main elements in Lithium-Ion batteries
Seasoned Expert, Fritz ten Doornkaat of Switzerland has been added as a strategic European adviser
Additional Information:
Here is a good graphic explaining the battery make up and how cobalt fits in
https://www.visualcapitalist.com/critical-ingredients-fuel-battery-boom/
Here is a link to a recent article reporting about the mining of cobalt in Africa. As you can see this is why we are focused on developing and acquiring high grade projects in politically safe and responsible governments.
https://www.washingtonpost.com/classic-apps/the-cobalt-pipeline-from-dangerous-tunnels-in-congo-to-consumers-mobile-tech/2016/09/30/66103382-5a8c-11e6-9767-f6c947fd0cb8_story.html?tid=hybrid_collaborative_1_na-amp
https://www.google.ca/amp/s/www.washingtonpost.com/amphtml/business/economy/companies-respond-to-questions-about-their-cobalt-supply-chains/2016/09/30/910f94de-7b51-11e6-bd86-b7bbd53d2b5d_story.html%3f0p19G=e?client=safari
We also came across this good article regarding cobalt on seeking alpha.com...Tesla's Evolving Cobalt Nightmare.
https://seekingalpha.com/article/4027400-teslas-evolving-cobalt-nightmare
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