‘The Battery Arms Race’: How China Monopolized the Electric Vehicle Industry | Electric, hybrid and low emission cars

TThink of an electric car, and the first name that comes to mind is likely Tesla. The California-based company makes the world’s best-selling electric car and was recently valued at $ 1 billion. But behind this American success lies a story about China’s manufacturing power.

The Tesla factory in Shanghai now produces more cars than its factory in California. Some of the batteries that power them are Chinese-made, and the minerals that power the batteries are largely refined and mined by Chinese companies.

As the world shifts to electric vehicles (EVs), companies strive to secure and strengthen their positions in the battery supply chain, from mineral extraction and processing to battery and EV manufacturing. .

The industry has undergone a move towards vertical integration – where a company controls a number of steps along the supply chain – to ensure sourcing and, in some cases, to improve transparency.

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What is the Battery Life series?


Battery Life is a series of investigations into the human rights implications of the electric car supply chain. From workers in large industrial cobalt mines in the DRC to residents of villages and towns in mainland Europe and Asia whose environment and way of life have been affected by mining companies, we examine the human impact of the green transport revolution.

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And in what has been dubbed, the “battery arms race“, China is in pole position.

China is the world’s largest market for electric vehicles with total sales of 1.3 m vehicles last year, more than 40% of global sales. Chinese battery manufacturer CATL checks 30% of the global market for batteries for electric vehicles. And specialist cobalt suppliers, Darton Commodities, estimate that Chinese refineries supplied 85% of the world’s ready-to-use cobalt last year; a mineral that helps improve the stability of lithium-ion batteries.

Most of this cobalt comes from the Democratic Republic of Congo (DRC), where almost 70% of the mining sector is dominated by Chinese companies.

Cross the DRC’s southern mining belt for copper and cobalt, and signs in Chinese are everywhere: at the entrances to casinos and hotels and on trucks and business premises.

In August, China Molybdenum Company (CMOC), a giant Chinese mining company, announced a $ 2.5 billion investment (£ 1.8 billion) to double copper and cobalt production from its Tenke Fungurume mine, already one of the largest in the DRC. This followed his purchase a 95% stake in the nearby Kisanfu copper and cobalt mine for $ 550 million.

Chinese corporate giant, Huayou Cobalt owns or owns a stake in at least three copper-cobalt mines in the DRC and is a key player at every stage of the cobalt supply chain, from mines to refineries to production. battery precursors and cathodes.

But China’s dominance over the DRC’s copper-cobalt mines comes at a price, say Congolese workers who work there.

“The Chinese treat the Congolese very badly. They like to insult us. They like to raise their voices. Even for a small mistake, you are punished. The Chinese are there as a boss to control the Congolese, ”explains a worker employed at Sicomines, a mine majority owned by a Chinese consortium, which includes Huayou Cobalt.

Tesla’s super factory in Shanghai now produces more cars than its California factory. Photograph: Barcroft Media / Getty Images

Sicomines workers claim to be paid less than Chinese workers who do the same jobs and are subjected to degrading treatment by Chinese supervisors.

“It’s the same as in colonial times, but now we are under the Chinese,” said another worker.

Yet Amnesty International, which has investigated human rights violations in the DRC’s informal mining sector, says the nationality of companies dominating the electric vehicle market is not their main concern.

“The problem is that many Chinese mining companies refuse to be transparent about their operations, but the human rights issues related to cobalt mining in the DRC have not happened with the Chinese: the DRC has a long history. story of foreign actors coming to the DRC. of the country and using their resources with little responsibility, ”says Mark Dummett, program director at Amnesty International.

“Amnesty is extremely concerned about the impact that the mining of electric car batteries will have on communities around the world; it has the potential to be devastating if brands at the top do not use their influence to demand that these new global supply chains be put in place in a way that respects human and environmental rights.

Chinese mining companies highlight the contributions they make to DRC revenues and local communities, while working in a harsh environment.

A Chinese official said: “It is very frustrating to work with the Congolese government. It is the most corrupt country.

Analyst Christian-Geraud Neema Byamungu, says labor laws are not always respected and corruption is rife across the country, which could potentially create an environment in which companies are unwilling to follow. the rules.

Some car and battery makers are starting to reduce the amount of cobalt in their batteries, in part to avoid the legal and reputational risks associated with DRC cobalt. Nickel-rich batteries are seen as a way forward, but the same Chinese companies that dominate DRC cobalt mining – Huayou Cobalt and CMOC – are also increasing their investments in nickel extraction and processing in Indonesia, which has the world’s largest nickel reserves at 72 million tonnes. This means that China is now the world’s largest producer of nickel, beating competition from Europe and the United States.

“China will be the main player because it is connected to the country’s market – but it also exports nickel at a lower price than Europe, because Chinese companies are known for their cheap labor,” said Paul Ginting, executive director of Action for Ecology and People’s Emancipation (AEER), an Indonesian environmental NGO.

Recently, efforts have been made to push back Chinese rule, starting with the DRC.

During a visit to Kolwezi in May, a town in the heart of the DRC’s copper-cobalt belt, the country’s president, Félix Tshisekedi, said: “People come to Congo empty-handed and when they leave, they are billionaires, but we remain poor.

The DRC recently announced a review some of its biggest mining contracts, including the $ 6.2 billion deal that gave the Chinese consortium majority control of Sicomines in 2007.

The Chinese presence is everywhere in Kolwezi, from casinos to hotels, including road expansion projects and mines.
The Chinese presence is everywhere in Kolwezi, from casinos to hotels, including road expansion projects and mines. Photography: Pete Pattisson

In Europe, too, companies are starting to take the lead from China. By the end of the decade, the continent is expected to have 28 factories producing lithium-ion cells, with production capacity expected to increase 1,440% from 2020 levels, according to Darton Commodities. This growth is being driven by companies such as Britishvolt in Northumberland and Sweden’s Northvolt, as well as Asian companies expanding their production in Europe.

However, European investments in mining and the production of battery precursors and cathode materials are not keeping pace, says Andries Gerbens of Darton. “China will eventually become less dominant. Nevertheless, he will remain an important player, ”he said.

The United States, however, is lagging behind, despite a $ 174 billion investment “to win the electric vehicle market,” announced as part of President Joe Biden’s $ 2 billion infrastructure program in April. , although this has since been lightened.

Simon Moores, CEO of Benchmark Mineral Intelligence told a US Senate committee in June that China is building the equivalent of a mega-battery of batteries per week compared to one every four months in the United States.

He warned, “A new global lithium-ion economy is being created, but any ambition for the United States to be a leader… continues to grow and be overtaken by China and Europe. .

A spokesperson for CMOC in the DRC said, “We are committed to providing a safe, healthy and decent working environment for all employees and attach great importance to the protection of employee rights.” The spokesperson said the company is committed to respecting international labor conventions and local labor laws, adding that all national employees in the DRC are members of trade unions.

Sicomines itself did not respond to multiple requests for comment. However, in a statement, Huayou Cobalt said: “Sicomines, as a responsible company, strictly complies with the laws and regulations of the DRC, respects human rights and applies best labor practices.

Additional reporting by Febriana Firdaus

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