The global battery industry relies heavily on minerals such as cobalt, tin, and tungsten, which are critical for manufacturing high-performance energy storage systems. However, the extraction and trade of these minerals have been linked to severe human rights abuses, environmental degradation, and armed conflict, particularly in regions like the Democratic Republic of the Congo (DRC). To address these concerns, regulatory frameworks such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (Section 1502) and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas have been established. These frameworks mandate companies to conduct due diligence and ensure their supply chains are free from conflict minerals.
Cobalt is a key component in lithium-ion batteries, particularly in cathodes for electric vehicles and consumer electronics. Approximately 70% of the world’s cobalt supply originates from the DRC, where artisanal and small-scale mining (ASM) operations often operate under hazardous conditions, including child labor and unsafe working environments. Dodd-Frank Section 1502 requires U.S.-listed companies to disclose whether their products contain conflict minerals from the DRC or adjoining countries and to report on due diligence measures taken to trace the origin of these materials. The OECD Due Diligence Guidance provides a five-step framework for companies to identify and mitigate risks in their supply chains:
1. Establish strong company management systems.
2. Identify and assess risks in the supply chain.
3. Design and implement a strategy to respond to risks.
4. Carry out independent third-party audits of supply chain due diligence.
5. Report annually on supply chain due diligence efforts.
Tin and tungsten, though less prominent than cobalt in battery manufacturing, are still relevant in certain battery components and electronics. Tin is used in solder for battery connections, while tungsten may appear in specialized applications. Both minerals are also subject to conflict mineral regulations due to their association with armed groups in conflict zones.
Compliance with these regulations presents significant challenges for battery manufacturers and suppliers. The complexity of global supply chains makes it difficult to trace minerals back to their source, particularly when materials pass through multiple intermediaries, smelters, and refiners. Companies must engage in rigorous supplier vetting, requiring documentation such as the Conflict Minerals Reporting Template (CMRT) to track the chain of custody. Smelters and refiners play a crucial role in this process, as they are the last point where mineral origin can be verified before materials enter manufacturing.
Industry initiatives have emerged to support compliance efforts. The Responsible Minerals Initiative (RMI) maintains a list of certified smelters and refiners that adhere to responsible sourcing standards. Additionally, blockchain technology is being explored as a tool for improving transparency in mineral supply chains by creating immutable records of transactions from mine to manufacturer.
Despite progress, gaps remain in enforcement and implementation. Not all companies subject to Dodd-Frank reporting requirements fully comply, and some rely on broad disclosures rather than detailed due diligence. The OECD Guidance, while widely adopted, is not legally binding, leading to inconsistent application across industries. Furthermore, artisanal mining, which accounts for a significant portion of cobalt production in the DRC, remains difficult to regulate due to its informal nature.
The European Union has also taken steps to strengthen conflict mineral regulations through the Conflict Minerals Regulation, which came into full effect in 2021. This regulation requires EU importers of tin, tungsten, tantalum, and gold to conduct due diligence on their supply chains, aligning with OECD standards. Unlike Dodd-Frank, the EU regulation applies to all companies placing these minerals on the EU market, regardless of size or listing status.
Looking ahead, the battery industry must continue improving traceability and accountability in mineral sourcing. Advances in material science, such as reducing cobalt dependency through alternative cathode chemistries, may alleviate some ethical concerns. However, as long as cobalt, tin, and tungsten remain essential, robust due diligence will be necessary to ensure compliance with evolving regulations and to uphold ethical standards in battery supply chains.
The intersection of regulatory requirements, industry initiatives, and technological innovations will shape the future of conflict mineral compliance. Companies that proactively invest in supply chain transparency and risk mitigation will not only meet legal obligations but also enhance their reputation and sustainability credentials in an increasingly conscientious market.