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Tesla Looks for Alternatives to Cobalt Mining

Alternatives to Cobalt MiningAs the demand for electric cars increases, so does the need for the controversial car battery mineral: cobalt. Cobalt is an essential mineral in lithium-ion batteries. These batteries help power “electric cars, computers and cellphones.” The demand for cobalt is steadily increasing with the rising sales of electric vehicles, which promises a positive environmental impact. However, cobalt mining in the Democratic Republic of Congo (DRC) has seen frequent cases of child labor, accidental deaths and violence between miners and security personnel of mining companies. Tesla, the best seller of electric cars in 2020, is looking for alternatives to cobalt mining with plans to eradicate the mineral from its batteries entirely.

Problems in Cobalt Mining

More than 70% of global cobalt comes from the DRC. Artisanal and small-scale mining (ASM) is responsible for producing 15% to 30% of Congolese cobalt. Over the years, human rights activists have reported strong concerns of human rights violations in mining operations. Activists have pressed for urgent attention and alternatives to cobalt mining.

In 2018, roughly 60 million Congolese people lived in conditions of extreme poverty, surviving on less than $1.90 a day. Because of this poverty, ASM cannot be entirely shut down as it is the primary source of income for many Congolese people. Furthermore, removing ASM is impossible because of its involvement in the complexity of the cobalt supply chain.

Miners in the DRC, including children, work in harsh and hazardous conditions. About 100,000 cobalt miners use hand-operated tools and dig hundreds of feet underground. Death and injury are common occurrences and extensive mining exposes local communities to toxic metals that are linked to breathing problems and birth defects.

Tesla’s Plan

Panasonic, Tesla’s battery cell supplier, wants cobalt-free batteries to be ready and available for Tesla cars within the next two to three years. The cathode of lithium-ion batteries used to consist of 100% cobalt. Over the years, Panasonic has reduced the amount of cobalt to 5%. Although reducing the use of cobalt improves the environment and decreases the cost of production, it also makes batteries more difficult to produce.

Panasonic recently partnered with Redwood Materials. Redwood Materials is a recycling startup that was established by J.B. Straubel, former Tesla chief technical officer. The startup recycles battery scraps and electronics to save and reuse materials such as “nickel, cobalt, aluminum, copper” and more. As part of the partnership, Panasonic would like to reuse these materials in its battery manufacturing.

Tesla is making efforts to look for alternatives to cobalt mining. However, a massive increase in the production of batteries has created a higher demand for the mineral. In 2020, Tesla secured a deal with Swiss mining giant Glencore. Although Glencore gets most of its cobalt from the DRC, Tesla has stipulated in its contract that suppliers use “conflict-free” minerals. The contract states that it is essential that the minerals procured “do not benefit armed groups in the Democratic Republic of Congo.” Until Tesla can run its own battery manufacturing or until Panasonic can effectively produce cobalt-free batteries for Tesla’s electric vehicles, the company will have to continue procuring cobalt for its batteries from the DRC.

Solutions to Corruption in Cobalt Mining

While Tesla’s plan for cobalt reduction in its batteries is a promising start in the search for alternatives to cobalt mining, there is also the solution of “ASM formalization.” Some companies have used ASM formalization to regulate their cobalt sourcing. Different methods of this formalization include:

  • Putting forth regulations for mining methods and working conditions.
  • Establishing ASM regulations with fundamental stakeholders for mine safety and child labor and ensuring that cobalt is obtained responsibly.
  • Formally recognizing ASM and monitoring compliance with regulations to ensure human rights are protected.

The DRC government has put in place a Mining Code and has designated specific areas of land for ASM. However, full implementation of ASM formalization will require the aid of private companies. Although regulating the mining industry in the DRC is challenging, there are several ASM formalization pilot projects that the country can learn from. With the help of these projects and the support of companies like Tesla, the DRC is on its way to addressing the root causes of human rights issues in the mining sector.

– Addison Franklin
Photo: Flickr

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Giga Shanghai: Tesla’s Gigafactory in China

Gigafactory,Over the last few years, there has been a lot of turbulence between the U.S. and China, especially in the areas of business and trade. Through all of the challenges though, U.S. car company, Tesla, managed to erect one of its famed Gigafactories in China in 2018 — one of the world’s largest emerging markets. Other than reducing the price of Teslas globally, the Shangai Gigafactory will also continue to raise employment in China and allow the Chinese economy to better develop.

What is a Gigafactory?

Tesla has been revered for its innovation in the electric vehicle (EV) market. Every year, the company seems to attract higher demand from around the world. With demand showing no signs of slowing down, Tesla was forced to rethink how it handles production. The Gigafactory serves as a production powerhouse to resolve the demand problem.

With the addition of the Shanghai Gigafactory, or Giga Shanghai, Tesla now says that it can produce roughly half a million vehicles per year. Gigafactories centralize production and allow for more parts to be made in-house. This cuts time and costs which ultimately results in lower prices for the consumer.

Tesla also made it paramount to make the Gigafactories as environmentally friendly as possible. All three Gigafactories are zero net energy. This means that they only rely on energy from renewable sources. In the case of Gigafactories, this means lots of solar power and no harmful byproducts.

How Giga Shanghai Helps Impoverished Chinese Citizens

Perhaps the most obvious way that Giga Shanghai helps is by providing jobs in China. Since its completion in 2019, the Gigafactory has employed roughly 2,000 people. Many of the jobs are in the production line so they are attainable for everyday citizens with no formal secondary education.

In addition to jobs, Giga Shanghai serves as a solution to the city’s immense pollution problem, with the most impoverished citizens living in the hardest-hit areas. Shanghai usually has an air quality index (AQI) that hovers around 150. Good air quality levels mean an AQI of between zero and 50. In a country where up to 1.24 million people die from pollution-related illnesses every year, Giga Shanghai proves that factories can still operate on a massive scale without relying on fossil fuels and other non-renewable energy sources.

If the energy technology used in Giga Shanghai is applied to other factories in the city, thousands of lives can be saved every year, especially the lives of the most impoverished citizens who cannot afford to move out of the most polluted areas.

Cutting Costs and Bolstering Relations

Before Giga Shanghai, the price of the world’s most popular EV (Tesla Model 3) remained too high for many people in China and abroad. Now, with the ability to produce the Model 3 in China, production and transportation costs have been slashed across Asia and Europe. Compared with the U.S. models, the production cost of the Chinese Tesla Model 3 has dropped by up to 28%. Now more than ever, Chinese citizens can access clean and reliable personal transportation that does not pollute their cities.

Giga Shanghai has also opened the door for new trade opportunities with European nations. Now, countries such as Germany, France, Italy, Portugal and Sweden prefer to purchase Teslas from China since the cost is lower. Trading in higher volume with developed economies means that China is inching closer to becoming a fully developed economy.

Giga Shanghai and the Future

Tesla CEO, Elon Musk, has stated that he would like to see 10 to 20 Gigafactories built over the course of the next couple of decades. Giga Shangai is the “guinea pig” since it is the first Gigafactory outside of the United States. So far, things appear to be running smoothly.

Soon, Gigafactories could be popping up in other emerging markets like Argentina, Mexico and Morocco. Gigafactories may be a stepping stone to help emerging markets become better developed. Job creation is a significant benefit of a Gigafactory. They advance industry, create new opportunities to trade with other countries and offer a clean alternative to gas-powered vehicles. Ultimately, Gigafactories can serve as a catalyst for global poverty reduction.

– Jake Hill
Photo: Flickr

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Fuel Shortage in Venezuela Impacts Agriculture

Fuel Shortage in Venezuela
In 1960, the Organization of Petroleum Exporting Countries (OPEC) established to coordinate and unify policies around the price of oil. This intergovernmental organization consists of 15 nations that produce 44 percent of the world’s oil and own 81.5 percent of the world’s oil reserves. Given the importance of oil in today’s economy, it is reasonable to assume that OPEC members are well-off, especially those with vast oil reserves. However, the fuel shortage in Venezuela proves otherwise.

Fuel Shortages Starve the Country

Venezuela, one of the five OPEC founders, boasts the world’s largest oil reserve. Although this South American country sits on a vast reservoir of mineable liquid gold, there is a fuel shortage in Venezuela that starves it. Due to years of mismanagement and corruption, the oil-rich nation has dried up its gasoline pumps, leaving lines trailing from gas stations that last hours. People can sometimes wait for days to fill their tanks. In the southern and western states of Tachira and Bolivar and the central states of Carabobo and Aragua, people can wait in line for five hours or more. Venezuela has limited power so it rations it; periodic power outages means that people cannot pump gas. However, there are no gas shortages in the country’s capital, Caracas; oil tankers divert into the capital to supply its six million citizens, but also to prevent political unrest around the Parliament.

These fuel shortages and gas station lines are impeding on already troubled Venezuelan lives. The hyperinflation and lack of job opportunities in the country hinder a good quality of life and gas shortages push this even further. Citizens cannot get to their jobs when their cars are empty on fuel or when they are stuck in line to fill up.

However, the fuel shortages in Venezuela are troubling to not only the day-to-day lives of citizens but also the entire agriculture industry that feeds the population. Fuel shortages compound the effect of food insecurity. When there is a shortage of fuel, food cannot make it from farm to market or from city to city. There is no rail system to move food either. Farmers leave harvested produce to rot, simply because the truck that transported vegetables to the market never arrived. On May 20, 2019, the National Federation of Cattle Ranchers in Venezuela issued a public plea to the government citing its difficulty moving cattle across the country.

Delayed shipping dates are not the only way fuel shortage in Venezuela impacts agriculture. Farmers might have nothing to sell because pesticide shipments might not arrive to prevent insects ruining their harvest. Without the shipment of crucial parts, farmers cannot operate basic equipment and without a reliable gas pump, workers cannot take the bus into work. Fuel shortage in Venezuela impacts not only the food but the equipment and the workers necessary to cultivate crops.

Plummeting Oil Production in the World’s Largest Oil Reserve

In the past, Venezuela has provided generous gas subsidies to make fuel almost free. However, the issue of fuel shortage began in 1989, when then-President Perez announced an end to the gas subsidy. The announcement resulted in large riots and since then, the suggestion of increased prices of oil is taboo. Thirty years later and after six years of economic crisis and recession, oil is still cheap, but production has dropped significantly. At the beginning of 2019, PDVSA, the state-owned oil and gas company, produced 1.2 million barrels of oil. On April 2019, this figure dropped down to 830,000. This decrease in production is due to obsolete machinery and under-resourced facilities. Additionally, as of now, only two refineries are in operation.

In addition to the mismanagement and corruption that has caused these plummeting oil production rates and shortages, the Maduro government also blames the corruption of former management of resources and U.S. sanctions. These sanctions prevented the export of specific materials that refine crude oils into usable fuel.

Solutions

Corruption, mismanagement and sanction stand-offs are difficult to address. However, there are many NGOs that operate on a community level and provide for those immediately in need. The Venezuelan Engagement Foundation Group (VEFG) is one of these NGOs with programs that address the effects of the fuel shortage and resulting food insecurity. One of its top missions is to provide nutritional meals to children in need through food programs. This year, its food programs have targeted communities in need, mainly children who are the most impacted demographic regarding food shortages. VEFG’s #FeedAKid campaign guarantees that $1 can give a child one meal a day through community kitchens and school canteens. Currently, VEFG feeds 3,000 children, teenagers and elders in 32 different centers worldwide or 90,000 meals a month.

Venezuela’s position is full of contradictions. As an oil-rich OPEC country with fuel shortages and once the richest country in South America, it is now grappling with hyperinflation, failing job markets and food insecurity. The corruption and mismanagement in government have failed to convert the potential of oil into social welfare. Venezuela has limitless potential in terms of its crude oil reserves ready for refinement. The efforts of NGOs on the local level and change on the national level will refine the crudity of poverty into prosperity.

– Andrew Yang
Photo: Flickr

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Personal Technology and Poverty

Personal Technology and Poverty in IndiaTechnology is often associated with poverty in regard to agricultural or water-retention devices. This is because poverty precludes many people from securing access to fresh food and clean water. While these types of technologies successfully increase crop yield and food access for land-scarce countries, they don’t necessarily provide people with opportunities to actually lift themselves out of poverty. One of the most pervasive forms of technology in society today is the cellular phone, especially smartphones. Cellular networks cover nearly three-quarters of the globe now. However, cost and other access barriers leave much more of the population without adequate technological access. Personal technology and poverty are becoming increasingly related as more and more features on smartphones enable people to become more connected with other people. This also includes banks and lending institutions.

According to the Pathways for Prosperity Commission on Technology and Inclusive Development, only one in four people in developing countries utilize smartphone technologies for digital financial services. Digital financial services can allow small businesses to grow through online lending, thus resulting in sustainable economic development.

Digital Financial Services

Encouraging the usage of digital financial services is one way that personal technology and poverty must be addressed . In order for this to occur, there needs to be more widespread access to smartphones and cell phones in developing countries. Melinda Gates, co-chair on the Pathways for Prosperity Commission, cited that a phone costs at least two month’s salary for someone living below the poverty line in Tanzania. If businesses and governments prioritize expanding access of smartphones to developing countries, then costs may be lowered. As a result, citizens wouldn’t need to fall deeper into poverty in order to harness the power of personal technology.

Invest in Tech

Founded in 2010, Go-Jek is a transportation network company located in Jakarta, Indonesia. Go-Jek was able to change the market of ride-sharing in Indonesia. They accomplished this by utilizing technology to expand where ride-sharing services were available. Additionally, they facilitated communication between drivers and riders. CNN reports that Go-Jek has helped drivers see a 44 percent increase in income.

Offering incentives to businesses and governments to subsidize personal technology in developing countries is one-way access can be expanded. Policymakers must also address the inequitable technological access between men and women based on social inequality. Many developing countries do not grant women the same social and political rights as men. This means fewer women would likely gain access to personal technology than men. The Pathways for Prosperity Commission stated that in many developing countries, women are 40 percent less likely to have used the internet than men. While tech companies work to expand access to personal devices, there is still more that can be done. It is imperative that governments are working simultaneously to grant women equal political and social rights. The U.S. House of Representatives recently passed the Digital Global Access Policy Act of 2019, which seeks to increase investments in expanding internet access across the world.

Beyond the iPhone

Phones are one way for people in developing countries to utilize personal technology to lift themselves out of poverty. Still, there are other “low-tech” opportunities for sustainable growth and development. Susan Davis, in the Harvard Business Review, points out that small, localized tech solutions often prove to be more beneficial than large-scale, generic tech investments. Implementing technological solutions requires more than businesses giving personal tech devices to those in need. With regard to personal technology and poverty, proper training, policy implementation and assurance that barriers to access are broken down are ways that personal technology can be an effective solution to help end poverty.

-Erin Grant
Photo: Flickr

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American Car Sales, The Roads of India

American Car Sales, The Roads of India
American cars have populated roads from Texas to Vermont to Oregon for decades, yet domestic sales growth is not what it once was. India is the next emerging market with vast potential for American car sales, and companies are vying for dominance.

General Motors (G.M.) and Ford are two of the biggest auto companies that export American cars around the world. In recent years, this model made by the U.S. has shifted to opening new manufacturing and distribution systems across the world.

India is an emerging market in the global auto sales industry and G.M. and Ford have both invested early, resulting in competition for popularity, market share and profit. Based on the current circumstances, it appears that Ford has the advantage. Ford has made large investments in production plants, including the Sanand and Chennai Vehicle Assembly and Engine Plants, each with a price tag of $1 billion. Together, the combined production capacity of these plants is 440 thousand vehicles per year. Ford has seen steady increases in production from just over 14 thousand to 26.4 thousand cars sold in August of 2014, and 2016, respectively.

In contrast, G.M. has just halted a planned $1 billion investment which was aiming to double G.M.’s market share by 2020. Unpredictable consumer patterns and possible new environmental regulations may play a part in this development. Monthly sales are declining over time for G.M, with sales struggling to rise above 4,000 units in early 2015.

In India, only 18 per 1,000 individuals own a car, compared to the 800 per 1,000 in the U.S. India also saw the largest percentage increase in sales from January to November of 2015. The lack of saturation in the Indian market presents a huge potential for growth in American car sales, yet what remains to be seen is how American companies will re-invent themselves to be desirable in the eyes of the people of India.

In the past, U.S. companies brought models of the European theater to developing countries with reliable success, expanding American car sales into new markets. However, this tactic has proven ineffective in India where customers will not jump to a higher price bracket. These companies are attempting to figure out ways to follow the market much more closely than they have before, and it is proving more difficult than anticipated.

India is on the edge of an explosion in car sales as a result of the growing middle class that will disseminate out of the cities and into more rural areas. As this inevitable future approaches, the possibility of capitalizing on this growth becomes less and less certain for new companies that wish to enter this market. Will Ford and G.M. be flexible enough to attract the people of India to companies rooted in decades of American success?

– Patrick Tolosky

Photo: Flickr