An American multinational technology company headquartered in California currently procures 5% of the cobalt market as an indirect buyer from battery manufacturers in China. The company is embarking on a strategy where, if successful, would see them increasing their requirements to 20% of the cobalt market. They therefore needed a suitable supplier in the DRC that would not tarnish their reputation and would be able to satisfy their cobalt demand. Core Consultants was therefore asked to evaluate potential cobalt producers and conduct a due diligence and short-list on suitable partners.
The project took a multi-phase approach. The first phase was a desk-top study, which considered three producers. Core Consultants considered company reports, industry reports and NGO reports in order to establish which company bore the most reputational risk.
The second phase employed primary research methods, focusing on Glencore, Tenke and ENRC’s operations. Core Consultants conducted industry-wide interviews with key stakeholders including government officials, legal experts, engineering consultants, NGO’s and competitor companies.
The recommendation was to approach Tenke Fungurume as a potential supply partner. However, we also explained to our client that as long as one specified the brand of cobalt, then one can be assured of the cobalt quality and its provenance.
The company is now engaging Tenke Fungurume and other stakeholders with the aim of mandating its Chinese battery manufacturers to source cobalt only from those companies meeting the company’s procurement requirements.