Cobalt Producer to Tackle Child Labor Concerns With Supply Probe

(Bloomberg) -- Chinese cobalt refiner Yantai Cash Industrial Co. will demand suppliers show that their raw materials aren’t produced with child labor after the London Metal Exchange set a deadline for companies that ship to its warehouses to spell out efforts to combat the problem.

Shandong-based Yantai is working with China’s Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters, and shipping services firm RCF Capacity Planners to audit its supply chain, Liu Xiaohan, a manager at the company, said by phone. The producer delivered metal to LME warehouses after gaining an export license in June.

“They will help us set up a responsible supply chain system,” Liu said. ‘‘We are going to set up a code of conduct and we will ask our suppliers to clarify the source of raw materials we buy.”

Scrutiny of the industry has intensified since an Amnesty International report in early 2016 alleged that electronics from the world’s biggest technology companies may contain cobalt sourced from artisanal mines in the Democratic Republic of Congo that often rely on child labor. The impoverished African nation supplies about two-thirds of the world’s cobalt.

Broader Push

The LME has told suppliers of all metals trading on the bourse to provide information on their initiatives to ensure products are sourced responsibly. 

“The survey is part of a broader push with regard to responsible sourcing standards and not related to any particular producer or brand,” a spokeswoman for the bourse said. “However, we would expect that any specific concerns will be addressed as part of our existing efforts and we look forward to engaging with the market further on this important topic.”

Yantai Cash will show its plans to the LME before the early December deadline, Liu said. It takes delivery of raw materials in Chinese ports and buys mainly from international trading houses, he said.

With demand for cobalt for electric vehicles soaring, lax monitoring at automakers is also leaving “major blind spots in their supply chains,” Amnesty said in a report this month.

To contact the reporter on this story: Mark Burton in London at mburton51@bloomberg.net.

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Tony Barrett, Liezel Hill

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