LG Chem Joins RMI to Secure Tungsten and Cobalt Procurement

LG Chem announced on October 21 that it has become the first South Korean battery manufacturer to join the Responsible Minerals Initiative (RMI). According to industry insiders, LG's move is to ensure the safety of tungsten and cobalt raw materials procurement for the development of the European power battery market.

RMI is a global association established in 2008 to monitor the ethical sourcing of minerals such as gold, tin, tantalum, and tungsten mined in conflict zones. It also closely monitoring the sustainable mining of cobalt. RMI has more than 380 member companies worldwide, is one of the most utilized and respected resources for companies from a range of industries addressing responsible mineral sourcing issues in their supply chains including automaker Volkswagen, Renault, and information technology company Apple.

Shin Hak-cheol, vice president of LG Chem, said: "It joined the RMI to transparently source the minerals that are closely related to human rights and environmental issues."

At present, the process of electrification of automobiles in Europe is accelerating. Major European car companies including Volkswagen, Daimler, Volvo and the logo have set electrification strategic goals, which in turn has generated huge demand for power battery purchases in Europe.

The EU predicts the transition to electric mobility will exponentially increase the demand for cobalt in the next decade. Since the minerals are mainly mined in the Democratic Republic of the Congo and China, preemptive actions must be taken to resolve the foreseeable supply and demand imbalance. The rise in global demand for the mineral has also brought attention to child labor and contamination issues linked to its mining. The EU plans to enforce guidelines by 2021, requiring members of the Economic Cooperation and Development to mandatorily manage sustainable sourcing of the resources.

LG Chem has joined RMI to ensure the stability of its raw materials supply, and on the other hand to ensure that its supply does not violate the mainstream European moral values and avoid affecting its European power battery market. The company hopes to collaborate with other RMI members to work toward sustainable mining in conflict regions.

Earlier this year, the company joined a consortium including IBM, Ford, China Hwayu Cobalt and RCS Global in adopting blockchain technology to improve the transparency of sourcing.

Besides cobalt, the conflict mineral tungsten is also one of the important raw materials used in smartphones and electric vehicles. For LG Chem, as the uncertainty of macroeconomic and geopolitical conflicts intensifies, the demand for both minerals are equally important, and joining RMI could better secure both procurements.

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