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Corruption, Child-Labor Risk in Congo’s Cobalt Industry, OECD Warns

Michael J. Kavanagh
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Corruption, Child-Labor Risk in Congo’s Cobalt Industry, OECD Warns

(Bloomberg) -- Companies mining and buying copper and cobalt from the Democratic Republic of Congo must do more to fight corruption and child labor in the country, the Organisation for Economic Co-operation and Development said.

Congo is the world’s largest cobalt producer and fifth-largest producer of copper, according to the U.S. Geological Survey. As demand for the two minerals has soared with the growth of the electronic and electric-vehicle industries, so have worries about the conditions under which they are mined. Cobalt is a key component in lithium-ion rechargeable batteries, and Congo has almost half the world’s known reserves.

Child labor and human-rights abuses are common in small-scale mining sites in Congo, where independent, artisanal miners dig by hand, the OECD said in a report published Friday. While companies have been trying to address these concerns, they should also mind reports of corruption among the country’s biggest mining firms, the Paris-based organization said.

The U.S. Justice Department is investigating Glencore Plc for its dealings in the copper and cobalt industry in Congo. The U.K. Serious Fraud Office is also probing Eurasian Natural Resources Corp., a Kazakh mining company, for fraud and bribery in Congo. After the probe opened, ENRC’s owners formed a new company called Eurasian Resources Group, which now operates the Congolese mines.

Companies should be “proactive about addressing risks, for example by improving working conditions in artisanal mining or taking action to address corruption in their supply chains,” Ben Katz, co-author of the OECD report, said in a statement. Production from Congo’s artisanal mines often gets mixed in with industrial output, he said.

The OECD is an intergovernmental organization made up of mainly wealthy nations that supports world trade. The report is part of the group’s guidance for companies “to respect human rights and avoid contributing to conflict or bribery through their mineral or metal purchasing decisions and practices.”

Richard Muyej, governor of Lualaba province, where most of Congo’s cobalt and copper deposits are located, said the country is working to formalize artisanal mining, which employs as many as 150,000 people in the region. The province is also working with companies to improve the tracing of artisanally mined minerals from their source and to create zones where diggers can work without entering industrial mine sites, Muyej told a conference Friday in the provincial capital Kolwezi, where the OECD launched its report.

(Updates with comment from Congolese governor in final paragraph. An earlier version of this story was corrected to remove the reference to Eurasian Resources Group being investigated.)

To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at mkavanagh9@bloomberg.net

To contact the editors responsible for this story: Gordon Bell at gbell16@bloomberg.net, Paul Richardson, Hilton Shone

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