Anonymous and Elon Musk — What’s the truth about Tesla’s Lithium Mines?
By Steve Cruz
A few weeks ago, a group claiming to be the hacking collective “Anonymous” released a video on Twitter and Facebook attacking billionaire Elon Musk and Tesla. In the video, a person wearing an emblematic Guy Fawkes mask addressed the world in a computer-generated voice. He put man and company on notice that the group was coming for them. Amongst the damning accusations levied, the Anonymous figure accused Musk of manipulating cyber currency and energy markets, contributing to geopolitical corruption, human rights and environmental harms, as well as a host of other sins:
“Young Children working in your overseas lithium mines (displays newspaper with headline: “Blood Batteries”), which are destroying the local environment….You have been open about your willingness to stage coups to install dictators in places where your toxic products are being mined.” — “Anonymous” in Elon Musk Video, released 6/5/21.
While the economists have been hopping all over the market manipulation story, there are many other layers of this being ignored. Are young children working in overseas lithium mines, producing the metal that goes into Tesla batteries? What does this headline of “Blood Batteries” refer to? Is Tesla staging coups? Helping to install dictators in the localities where they mine their metals? Lastly and most importantly, what the hell can we do about it anyway?!
First, let’s set the mood. Renewable energy technology captures energy from non-carbon sources and stores it in fabricated, metal batteries instead of carbon molecules that can be burned. Electric vehicles use this technology instead of gasoline for power and propulsion. Tesla car batteries weigh 1,200 lb (540 kg) and are mainly built out of lithium, nickel, cobalt, and aluminum. This technology is constantly evolving, becoming more efficient, and using less material. But the reality is, that is a lot of metal. With demand for EVs and other tech products skyrocketing, these metals are globally in high demand and short supply.
Elon Musk and Tesla have definitely become very visible players in tech-metal supply chains, but it is important to state that their market presence did not cause all the problems currently affecting the metal resource sector. The need for a diverse energy grid is very real and urgent. However, converting the world into a green-energy wonderland is not easy, nor is it particularly green at first. Increased demand for green tech products has triggered a new, 4th industrial revolution. Manufacturing industries are placing new supply demands on the tech-metal resource sector, where commodity prices are high but volatile, and supply is low. Mines take time to develop, and refineries take time to go online. This supply vacuum is happily filled by 3rd world, dictatorial, and communist countries. Many young governments are prepared to be negligent of their own people and environment to meet market demand. The mining companies also invest in infrastructure and the country gets to cheaply build up a resource economy. People have jobs and politicians are heroes, gaining political sway and maybe even some wealth.
We saw the same thing happen in U.S. coal mines during the industrial revolution. On the backs of the working poor and immigrants, our nation of skyscrapers and power grids was born. The proverbial stick may be in our own, 1st world eyeball. However, demand and scarcity are, and have always, driven greedy people to cut corners and disregard ethical considerations. These harms continue only when good people do nothing. The Anonymous figure is right about that. But — are they right about Elon Musk?
1. Are young children working in overseas lithium mines, and does that metal go into Tesla batteries?
Tesla is investing in lithium mine projects in North America but its main suppliers are in China. Ganfeng Lithium Co. Ltd has been their major supplier since 2018, and in December they signed a new supply contract with Sichuan Yahua Industrial Group Co Ltd. While this group chiefly makes civil explosives, they have been recently branching into the lithium market through acquisitions. Their subsidiary, Yaan Lithium, will be fulfilling this new, 5-year, $630-$880 million contract to supply lithium to Tesla. With Benchmark Mineral Intelligence reporting that serious lithium supply shortfalls are anticipated by 2027, Tesla is likely just shoring up their future supply with this secondary contract.
As an aside, both of these companies are metal refineries and suppliers, not lithium miners. Manufacturers of high-tech components buy refined metals from refineries or middle-market traders — not directly from miners who take it from the earth. Because of this separation between mine and manufacturer, in the past it was really easy to have plausible deniability of upstream sources and any related ethics abuses. So long as the metal supply could arrive from the vendor in time for a product launch and came through legal channels, it wasn’t an issue under consideration. While not automatically and directly guilty of ethical lapses, the bottom line here is that ALL major tech companies have failed by today’s standards. Increasing globalization has made us more conscious as people and as consumers. The market cares about where things come from, and about the true cost of consumerism. The quality of supply chains now matter, and businesses are being responsive.
Yaan Lithium buys their ore from mines in Western Australia and Canada. Ganfeng sources their lithium from mines in China, but also Western Australia, Ireland, and soon, Argentina. A few weeks ago, Ganfeng signed a memorandum of understanding with Argentina’s Mining Ministry to develop a Lithium-ion factory in Argentina. While not currently in production, they have committed to sustainable mine development there. Watch this space.
China and Argentina are known to have turned a blind eye to human rights and environmental abuses in the past. That being said, there is no current evidence that either have mine operations employing child labor. Mining is inherently destructive though, and there are indications that these operations are causing environmental harms. This is especially true in Argentina, home to some of the world’s second-largest lithium reserves, where there have been violent disputes over water in recent years accompanying the significant economic boom in this otherwise rural area. Bolivia, however, is the world’s largest producer of lithium, and has the world’s lowest work age limits. A child as young as 10 is able to legally work at their family’s artisanal mine, and at 12, are considered old enough to work for entities other than family. While Bolivia does not currently supply Tesla with lithium, China and Germany are the main importers of Bolivian lithium.
Summary: Lithium is mined in some countries via child labor, and lithium mines can be environmentally hazardous. There is no obvious indication that Tesla is currently procuring their lithium from unethical miners or supply chains. Tesla sources the majority of their lithium from Australia.
2. What is the headline “Blood Batteries” about?
Not lithium, actually.
It’s a story referencing the metal cobalt. Sorry, Anonymous person. An easy mistake and one not entirely off the mark — EV markets recently became the largest consumer of cobalt globally. Both metals are essential components of Tesla batteries, but cobalt is much rarer than lithium. A multibillion-dollar industry, cobalt is easily the most expensive component of EV batteries. Supply chain quality is also difficult to guarantee because almost all of it is mined in one country: the Democratic Republic of the Congo. And this is a problem.
The DRC gained post-colonial independence 60 years ago and has struggled ever since with poverty, political unrest, ethnic conflicts, plagues, and lots of public and private sector interference. Yet they now find themselves sitting on $24tril USD worth of tech-metal deposits, and producing 70% of the world’s cobalt supply. It is nationally their largest source of income, and as such, people are willing to do anything to mine cobalt and leverage the supply. Slave and forced child labor have been rampant in the DRC for years and have been very hard to mitigate due to near-constant civil unrest.
The basis of this “Anonymous” accusation is likely a class-action lawsuit still winding its way through federal courts. Filed in 2019, it alleges that two mining companies in the Congo, the Chinese Zhejiang Huayou Cobalt, and Anglo-Swiss Glencore, knowingly employed and neglectfully caused the death and disability of child laborers in the DNC. It also named many US tech companies, including Tesla, Apple, and Microsoft, as complicit in the abuse. It accuses them of knowingly purchasing the resulting cobalt from a Brussels-based supplier and profiting off the suffering of the “desperately poor”. All parties reject this lawsuit as frivolous, deny fault, and instead blame the ethical violations on lack of government oversight on the part of the DNC and on rebel militia groups that force locals into unsafe artisanal mining operations to raise capital for warfare. They were just operating legally, after all.
Since the suit was filed, both above mining companies have committed to better oversight and joined the organization Fair Cobalt Alliance, which seeks to build a more ethical cobalt supply chain. In 2020, Tesla signed a contract with a newly redeemed Glencore to supply all of Tesla’s cobalt needs in their European factories. They also committed to an R&D plan that prioritizes engineering cobalt out of Tesla batteries.
Glencore is currently the only non-Chinese foreign miner in the Congo and their operation supplies 18% of the world’s cobalt. Chinese refineries buy and process about 70% — and also buy half of Glencore’s supply too. The Congolese government did recently approve the state-owned, Gecamines, to purchase and market all artisanally-mined cobalt in the country. Artisanal mining is largely unregulated, still easily mined by child and slave labor, and is the source of 15–30% of DRC cobalt. Many privately wonder if this government sanctioned business is more an effort to control price and supply rather than curb human rights offenses. The DRC still does not have an effective diligence plan, with activities like site visits to verify compliance of working conditions. To be fair, this is a young government and the country has been through so much. It will take time for them to develop a system that comprehensively addresses mining issues.
Obama signed the Dodd-Frank Act of 2010, which has a section that requires U.S. companies to investigate and disclose their use and source of conflict minerals in the form of reports to the US government and the public. It specifically requires reporting for tin, tantalum, tungsten and gold. That’s it. Cobalt, for instance, is notably absent — and it’s likely because the U.S. rarely has completely ethical cobalt market options. In 2010, you could only get cobalt from the DRC or China. China already had a monopoly on rare earth supply chains, and the global marketplace got shaken and squeezed by a Chinese export embargo in 2011. The Congo has a world class mineral deposit and is, well, NOT China. Production there has tripled since 2008.
Ethical market options have expanded since then, but are first come, first serve. In fact, with Tesla’s supply contract locked, there are very few ethical, free-market supply options left to manufacturers like GM, Ford, and Chrysler. They may be forced to buy commodities from less secure channels. North America mines only 4% of the global cobalt supply annually and cannot help Tesla or other U.S. automakers with the increased cobalt demand or the anticipated supply shortfalls. Some European companies have joined the Cobalt Action Partnership, an organization working to build metrics, standards, and supply chain relationships with compliant cobalt sources. Globally, again, we are improving– but there is more left to do. Countries like Canada and Australia are developing new mines, but the cold, hard reality is that half of the world’s cobalt reserves are located in the DRC, a place riddled by poverty and political unrest. China is a significantly larger trade partner with the DRC than any other country (or company).
Tesla is being rightfully held to high standards because they chose to position themselves on the high road. They are currently contracted with an ethical cobalt source. New mines are in development, especially Glencore’s Australian operation, that will eventually diversify the cobalt market, shift supply reliance off the ethical nightmare that is the DRC, and maybe ease some of this pressure off of manufacturers like Tesla too.
3. Is Tesla staging coups and helping to install dictators in the localities where they mine their metals?
Ah, finally a simple answer — No.
This particular conspiracy arose from a flippant remark Elon made on Twitter in 2019. He responded to a tweet from another user which accused the U.S. government of being involved in a coup against then-President Evo Morales Ayma of Bolivia. In his reply, Elon said, “We will coup whoever we want! Deal with it.” The foreign minister of the coup government, Karen Longaric, also said to Musk in a letter , “any corporation (sic) that you or your company can provide to our country will be gratefully welcomed.”
Here’s the thing: The Trump Administration did openly back this coup government, which overthrew the Morales administration in 2019. Last year, however, the country reelected the overthrown socialist government and the coup government had to step down, so the whole business was really for naught and….just sad. Elon is very guilty of trolling. He also openly admitted to wanting access to Bolivian lithium. But it was the U.S. government that actually supported the brief coup.
Summary: Tesla doesn’t buy Bolivian lithium, and there has never been any indication that Elon gave material support to this coup in Bolivia.
4. Ok, the tech metal world is nuts. What the hell can we do about this stuff anyways?
Elon Musk is many things, some not great, but some good — much like the tech metal resource sector. Mining and refining are nasty businesses but also vital and necessary parts of modern human life. You are probably reading this article right now on a device containing over half of the periodic table of elements in it. Teams of hundreds, if not thousands, of people across the globe work very hard to make this world that we live in possible. Valuing their work, their quality of life, the environment, and the scarcity of the resources they are producing is something you are already doing by noticing and caring. Good job! Here are some real, tangible things you can do to make a difference in your own life:
First: Buy smart and buy secondhand. In this free market society, you have options. By becoming an informed consumer, you will naturally make better choices with your dollars — and gain confidence knowing that you are supporting people and businesses who are doing things right! Also, ask yourself if you need to buy something new. Buying gently used products, and rehoming things you don’t need, goes a long way to stop the waste.
Second: Recycle. Recycle. Recycle. Cobalt, aluminum, and many other metals are nearly 100% recyclable. In 2018 the US reported 15% of all Cobalt consumed was from recycled sources. This is great progress. Recycle your household waste, and make sure your electronics and batteries are dropped off at a facility that will divert away from landfills and into the secondary resource market. Check out this great article for some tips: https://www.consumerreports.org/recycling/how-to-recycle-electronics/
Third: Invest in design. We can avoid so much waste through better product design. In the case of Tesla, they want to stop using cobalt in their products entirely because of how problematic the supply chain is. By engineering products that use less material and are designed to be recycled, we will be able to stop many of these toxic, one-way product life cycles. Good engineering, enhanced material science, and better design are essential to ending waste in our consumerist society.
Lastly: Continue to hold people accountable and demand for solutions. There is no unified waste management or recycling philosophy or plan in the United States for non-hazardous material. In 2015, President Obama signed an executive order that requires all federal buildings to divert at least 50% of their waste away from landfills or incinerators through reuse, recycling, and composting programs. But that only applies to federal buildings. Other than this, CERCLA, and the RCRA, however, there really isn’t any federal oversight of waste management and only 30% of trash is currently being recycled. Every state, county, town, and business sector are in many ways left to their own devices. It is important to note that the two public companies, Waste Management and Republic Services Inc., are responsible for over half of the solid waste collection in this country. That kind of market dominance makes them influential and positions them to be leveraged towards making big changes in this sector.
Until our society starts valuing their metal resources, mining will be a necessary and critical part of the new green revolution. At the end of the day, it is up to every consumer to be an ethical watchdog that makes smarter choices. Collectively, even small changes can make a huge difference.