EDITOR: | June 24th, 2016 | 10 Comments

Goblin-free cobalt an ethical target

| June 24, 2016 | 10 Comments

iStock_11484767_LARGEThere is sufficient doubt about the ethical origins of cobalt from the Democratic Republic of Congo (DRC) to tag it as a conflict mineral, along with the 3TG (Tin, Tantalum, Tungsten and Gold).

In a recent report titled Exposed: Child labour behind smart phone and electric car batteries Amnesty international has criticised leading electronics brands such as Apple, Sony and Samsung for not performing the necessary diligence to prevent cobalt mined by children from getting into lithium-ion batteries used in their products. In fairness to Apple, Sony and Samsung, smartphones are just on of the many electronic devises that use cobalt.

But fundamentally it is unsettlingly plausible that child labourers contributed components of our fancy gadgets, even our clean-tech devises.

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) was passed to compel the Securities and Exchange Commission (“SEC”) to issue rules specifically relating to the use of “Conflict Minerals” used as a base for manufacturing. Conflict Minerals are currently defined by US Law as tin, tantalum, tungsten and gold (also known as “3TG”) and related derivatives. The SEC rules require any SEC registrant whose commercial products contain any 3TG (“3TG Product”) to determine whether the 3TG in the 3TG Product originated from the DRC or adjoining countries (collectively, the “DRC Region”). “3TG Conflict Free” means that the supply chain is transparent and the 3TG in 3TG Products does not directly or indirectly benefit armed groups responsible for serious human rights abuses in the DRC Region.

Cobalt sources from the DRC warrant scrutiny to ascertain compliance to Dodd-Frank.

Over half of the world’s supply of cobalt is mined in the DRC, where it is estimated that one fifth comes from small scale mining operations that “employ” children as young as 7 years who work the ore with the most basic of tools under poor or inexistent health and safety standards.

It is not the first time in the history of cobalt that the silvery metal is involved in controversy. 16th-century miners sometimes mined what looked to be rich veins of copper or silver, which turned out to be worthless gangue after smelting. These ores caused a burning sensation to those who handled them. Miners called these ores cobalt in reminiscence to mystical underground creatures, the “kobolds” or goblins that terrified the minors for sport.

Cobalt dust may cause an asthma-like disease with symptoms ranging from cough, shortness of breath and dyspnea to decreased pulmonary function, nodular fibrosis, permanent disability, and death. Exposure to cobalt may cause weight loss, dermatitis, and respiratory hypersensitivity. LD50 (oral, rat)- 6171 mg/kg. (LD50 = Lethal dose 50 = Single dose of a substance that causes the death of 50% of an animal population from exposure to the substance by any route other than inhalation. LD50 is usually expressed as milligrams or grams of material per kilogram of animal weight (mg/kg or g/kg).) For comparison arsenic is infinitely more toxic with a LD 50 of 15 mg/kg. Tin, tantalum and tungsten show intermediate toxicity between cobalt and arsenic. Gold is not toxic but has intrinsic currency value that makes is a perfect conflict metal.

None of us want to see child labor in support the electronics and clean tech sector. We would like to see ethical miners such as Formation Metals Inc. (TSX: FCO | OTCQB: FMETF), Green Swan Capital Corp. (TSXV: GSW) and Cruz Capital Corp. (TSXV: CUZ) take the goblins out of cobalt mining.

Dr. Luc Duchesne


Dr. Luc C. Duchesne is a Speaker and Author with a PhD in Biochemistry. With three decades of scientific and business experience, he has published ... <Read more about Dr. Luc Duchesne>

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  • Sluggo

    I’ve read in a metals stock chat room that Formation Metals Idaho cobalt project, (a post,hopefully from a short), that after completion of a positive bankable feasibility study, best case scenario for production would be 8-10 years. I’ve tried numerous times to contact FMETF by phone & by email only to not hear any response from them. I’m now seriously wondering if this company isn’t engaged in fraudulent activity. Can anyone out there actually confirm that FMETF is truly an “ethical miner”?

    June 25, 2016 - 10:55 AM

    • Tracy Weslosky

      Sluggo. Paul and the Formation team are one of the most accessible management teams I have ever met. We just did another interview with Paul and your timeline is incorrect. But I am going to contact them and have them answer this directly….and online. Thanks. Tracy

      June 25, 2016 - 8:07 PM

  • K Van den Cruyce

    @Sluggo. I asked them a few questions some time ago. After 2 weeks I got a very complete answer. So, I wouldn’t worry . I suppose they are travelling around regularly.

    June 25, 2016 - 11:53 AM

  • Carlo

    Biggest cobalt resource in the world outside of the Congo is owned by an Australian company. They have not announced it yet. Hint: Robin Bromby named the company in a recent Investorintel article about Scandium.

    June 25, 2016 - 6:35 PM

  • Timothy

    Fortune Minerals is another ethical producer of Cobalt in the NWT I think.

    June 25, 2016 - 6:55 PM

    • Tracy Weslosky

      You are correct Timothy – thank you.

      June 25, 2016 - 8:06 PM

  • Sluggo

    All: Thanks for all of your input. Additionally Tracy, I went back & revisited your initial interview with Paul Farqharson where he restated the timeline. Thanks again.

    June 25, 2016 - 8:39 PM

  • Rick Honsinger

    Sluggo, Rick here with Formation Metals. I would be happy to discuss our project with you and the timeline, which is considered near term at 21 months from re-commencement of construction. Feel free to contact me directly at our Vancouver office. We are also listed on the senior board of the Toronto Stock Exchange under the symbol, FCO. I can also refer you to http://www.SEDAR.com, where all our public information is filed, including Technical Reports by independent engineers that will give you a detailed overview of the Idaho Cobalt Project.

    June 26, 2016 - 6:45 PM

  • Peter

    Well Tracy, I have to say Sluggo is right, I also tried to establish contact and was not successful in doing so. Also according to the information disclosed on their website they are still in the PEA stage of the Idaho project which seems to be mothballed since 2013. I guess the company is waiting for favorable share price conditions as well as the cobalt price raise to gain financing from a CR in order to further develope their project. This further development would need a PFS and a DFS which will certainly take 5 – 7 years at least, depending on the available funding. Taking into account that CAPEX and OPEX financing after the DFS is released will also be dependent on a high cobalt demand and favorable SP, we can be looking at 8 – 10 years from now before they can place their product on the market. I am looking forward to their answers.

    June 27, 2016 - 7:37 AM

  • Sluggo

    Rick Honsinger: Thanks for your offer although I prefer that you respond my original voice message & emails sent to you on Formations web platform, both utilizing “contact us” & “investor relations” options. FMETF appears to be more interested in me grading the corporate website than using those mediums as serious a communication methodology. Don’t get me wrong, I’ve already invested a significant amount in the company. That’s why I find this so particularly frustrating.
    Looking forward to hearing from you.

    June 28, 2016 - 7:56 AM

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