Exclusive - London Metal Exchange aims to ban metal sourced with child labour
Three sources said the London Metal Exchange could remove the company from the approved list of metal suppliers if they did not meet industry standards after protests by African children to mine cobalt.
The exchange will release the principles of responsible sourcing in the coming months, and producers will have to show that their metals meet the industry standards of the new LME guidelines, people familiar with the matter said.
\"LME must be a police officer.
It can do this by ensuring that industry standards for child labor and conflict minerals are met and audited and certified, \"said a source from the LME committee.
With manufacturers scrambling to ensure the supply of key components in rechargeable lithium, responsible procurement of metals such as cobalt has become the focus
Ion batteries were expected to surge in electric vehicle sales.
Automobile manufacturers such as Volkswagen (VOWG_p. DE)
I have asked the supplier to ensure that the cobalt does not come from child labor and are concerned that some metals in the warehouse approved by LME may be contaminated, which has led some consumers to drop the contract.
Although there is no single industry
Responsible for the broad standards of the mineral supply chain, the Economic Cooperation Organization
Business development (OECD)has a five-
The Step framework and the cobalt Institute are developing their own standards.
In order to make progress in responsible procurement, LME sent a survey to producers in November asking about the procurement, audit and certification of metals that can be delivered under the LME contract.
A response should be made by December. 1.
Most people are now responding, the source said, although stragglers will be given a new deadline, possibly at the end of the third quarter, or at risk of being named and humiliated
They say it may take two years or more to set principles, adopt specific standards that must be adhered to and allow producers to meet the requirements.
In recent years, the focus has also been on tin, another metal traded on LME for electronic products, possibly from conflict areas in Africa or artisanal mining areas.
LME declined to comment on whether the metal brand that investigated the response or approved could be removed from its list.
\"LME is committed to promoting the implementation of recognized responsible procurement standards by its listed producers and is expected to issue further guidance on this issue in the coming months,\" the exchange said in a statement . \".
Human rights organization Amnesty International raised the issue in a 2016 report detailing the use of child labor in artisanal cobalt mines in the Democratic Republic of the Congo, and said in 2017, some major electronics are not doing enough to clean up the supply chain.
Hanrui Cobalt, Nanjing, December (300618. SZ)
The main raw material supplier of Yantai Cash, a cobalt supplier approved by LME, said that some of its cobalt is from manual mines in Congo and does not rule out the possibility of child labor.
Concerns about cash metals in Yantai first appeared in last June, and prompted some people in the cobalt industry, including sources from the LME cobalt Commission, to call for its suspension from the LME list.
Yantai was then listed on the LME approved list, creating discounts for the price of LME cobalt, rather than the prices collected by the trade publication metal Gazette, sources said.
Yantai Cash to join China\'s responsible Cobalt Initiative (RCI)
In December, the China Chamber of Commerce for Import and Export of metals, minerals and chemicals was established, including major end users of cobalt such as Apple Inc. (AAPL. O)
Samsung SDI (006400. KS).
Liu Xiaohan, manager of Yantai Cash international trade department, told Reuters that the company is aware of the importance of building a responsible cobalt supply chain and is taking active measures to address the challenges.
In addition to joining RCI, Yantai Cash is also developing a responsible procurement policy to carry out the third procurement
Liu said the company will conduct audits, prepare annual progress reports and make necessary information disclosures.
A person familiar with the matter said Yantai metal is one of the nine approved LME cobalt brands, if the company did not make good progress in applying the principles announced by the exchange plan by the end of the year, may be banned.
Liu of Yantai said any remarks about the ban were irresponsible and in fact unfounded.
So far, LME has not approved any specific industry standards regarding responsible procurement.
The OECD framework is jointly formulated by members and non-members.
Member States and the United Nations of the Congo problem expert group.
The OECD also said on its website that it has worked with the China Chamber of Commerce for metals and the Ministry of Commerce to develop guidelines for due diligence in China.
China\'s responsible Cobalt initiative calls on companies in the cobalt supply chain to recognize the OECD and China guidelines and align with their policies.
\"LME will not set standards, which will be developed by institutions such as the OECD and the cobalt Institute, but they can work to ensure that environmental standards are met and human rights are protected . \"
The institute is working on the so-called cobalt industry risk assessment framework.
\"We hope to be able to launch later this year,\" said David weight, director of the cobalt Institute.
\"Our idea is to identify risks for members and their customers and to provide a framework for providing guidance on how to respond to risks.
\"The international tin Institute issued a code of conduct for its members last year, and the international mining and metals Council also has guidelines for responsible procurement.