Dark Mines: the Harsh Underbelly of Electric Vehicles

Anyone perusing the business press in recent times will have surely noticed that the topic of electric vehicles features predominately on basically a daily basis. A recent report by the International Energy Agency states that EVs accounted for roughly one in every seven passenger cars brought globally in 2022. Norway remains the world leader with around 80 percent of new cars being EVs- thanks largely to a government buildout of charging stations. Iceland currently comes in second with around 60 percent. Both countries are blessed with huge amounts of renewable energy- hydroelectricity for Finland, geothermal for Iceland. In the U.S. EV sales almost doubled last year to about 6 percent. With the passing of the Inflation Reduction Act last year, which extended the $7500 EV tax credit for 10 years (with income and cost requirements and as long as a significant amount of the EV is manufactured in the U.S. and ), sales figure to receive another large increase this year.

The major car companies have announced billions of dollars in investments to catch up to Tesla and Chinese upstarts such as BYD. Toyota’s new CEO, Koji Sato, vows to correct his company’s slow start on EVs while Ford is apparently facing a host of challenges. Volkswagen recently released an EV model for the masses (to be priced at $25,000), something Tesla has been promising to do forever though it remains to be seen that the company will deliver the car by its stated 2025 target. Tesla’s stock price is itself a constant focus thanks to the company’s loudmouth owner.

If the pandemic revealed anything it is the importance of supply chains and logistics to modern life. This especially applies to EVs as there is a dirty secret to the green economy: it can be quite dirty. It is a certainty that globally mining will have to greatly increase to enable a significant decarbonization of the auto industry. An estimate by industry forecaster Benchmark Minerals projects that a six-fold increase in demand for lithium-ion batteries would mean up to 384 new mines worldwide. Regarding EVs, a widely-sited estimate by Zeke Hausfather of the Breakthrough Institute calculates that it takes about 16,000 miles for an EV to reach zero emissions considering the amount of energy that goes into building each car.

One prominent element used in lithium-ion batteries that make EVs run is nickel. Nickel lends a higher energy density and more storage capacity to batteries enabling EVs to get more miles out of a single charge. Indonesia is home to the largest nickel deposits in the world, around 22 percent of the global supply, particularly on the island of Sulawesi. Historically, nickel ore was exported from the area unprocessed however around a decade ago the Indonesia government banned its export in an effort to attract heavy industries. This led to the building of the Indonesia Morowali Industrial Park, known as IMIP, a sprawling 3000-hectare complex equipped with steelworks, coal power plants, and manganese processors, along with its own airport and seaport. The project was a joint venture between Chinese and Indonesian industrial companies.

Between 2020 and 2022 nickel production more than doubled to 1.6 million tons, almost half of the world’s entire output. In April 2022, a consortium led by the world’s second-largest EV battery manufacturer, LG Energy Solution, signed a $9 billion contract with the Indonesia Battery Company and mining company Aneka Tamben. A few months later in August 2022, Tesla agreed to a $5 billion contract with two Chinese companies working at IMIP, CNGR Advanced and Zhejiang Huayou Colbalt. Chinese companies are largely dominant in EV supply chains at this point, ironically in part due to a lack of concern for environmental issues (This dominance includes Rare-Earth metals. They get their name not from a lack of abundance but from the difficulty in extracting them. At last count China controls 71 percent of the world’s extraction and 87 percent of processing capacity). In fact, during the past three years Indonesia has signed more than a dozen deals worth more than $15 billion for battery materials and EV production with global manufactures including Hyundai, LG, and Foxconn.

The number of workers at IMIP has grown from 28,000 in 2019 to 66,000 today transforming what was a fishing village a decade ago to bustling industrial jungle. ‘It’s like a city was dropped in the middle of paradise’ Iman Shofwan, head of research for the Indonesia nonprofit JATAM recently told Wired magazine. Local infrastructure has struggled to cope with the sudden growth, leaving workers living in hastily built shacks and local homes and businesses plagued by long blackouts. Last September, Brookings Institute reported on the environmental impact of the nickel sector, with particular focus on is reliance on coal. Coal provides about 60 percent of Indonesia’s total electricity capacity- with industrial parks accounting for 15 percent of coal output. Waste from the industry has decimated local fishing and deforestation has increased erosion and the risk of flash floods. Workers toil for low pay, some for less than the minimum wage, in dangerous conditions. Strikes have been met with the typical repression. Two protesting workers were killed at the PT Gunbuster Nickel Industry smelter in January.

Gruesome as things appear in Indonesia, it gets worse in the Democratic Republic of Congo (DRC). Another ingredient in rechargeable lithium-ion batteries is cobalt. Cobalt ensures cathodes inside batteries do not easily overheat or catch fire and it helps extend battery life. While cobalt touches just about every piece of tech we use, the biggest player is now the EV sector which now consumes 34 percent of global production, 64,000 tons, a number that figures only to substantially increase as EVs increase. Roughly 75 percent of the world’s cobalt is mined in DRC. As Siddharth Kara describes in his recent book Cobalt Red: How the Blood of the Congo Powers Our Lives, a good amount of this cobalt is dug up by ‘artisanal miners’, namely desperately poor people, including many children, for pennies a day. A report from the Cobalt Institute last May put the amount of cobalt in the global supply chain mined like this at 12 percent. Kara says the number could well exceed 30 percent. He estimates there are somewhere between 10,000 and 15,000 tunnels dug by artisanal miners.

Kara’s description of the children being maimed and killed in collapsing mines in a country that was already the victim of perhaps the most ghastly example of Western imperialism and since independence has been plagued by dictatorship and war truly exposes the bottom of the global economy. Kara writes of the Tilwezembe mining site, home to the more child labor than any formal mine in Congo:

It is temptinja. The depravity and indifference unleashed on the children working at Tilwezembe is a direct consequence of a global economic order that preys on the poverty, vulnerability, and devalued humanity of the people who toil at the bottom of global supply chains.

EVs also use three times as much copper as gas powered cars along with loads of lithium. Some of the largest copper mines are found in Peru, the second largest copper producer in the world, where rural workers have recently been driven to revolt against a corrupt and unequal political system. Africa also has significant copper reserves and has seen production increase.

EVs are hardly the only pieces of cutting edge technology that exploit workers in the global south. The other development that has dominated the business press is the development of generative AI, such as Cseph GrossoohatGPT. Venture capital is pouring into AI startups, $3,6 billion into 239 AI deals from January to mid-March according to investment analysis for PitchBook, at a time the tech industry in general is seeing a mini-downturn due to higher interest rates choking off much of the cheap capital that flowed during the height of the pandemic. On March 17^th, Morningstar reported 139,000 tech-sector employees have lost their jobs since the start of the year. One of the larger issues that looms over its development is the fear that AI, and related algorithms, will replicate racist, sexist, and generally violent impulses of the flawed society of its creators. In January, Time magazine reported that OpenAI has used workers in Kenya to make ChatGPT less toxic. Partnering with a company called Sama, a San Francisco based firm that employs workers in Kenya, Uganda, and India to label data for Silicon Valley clients. Data-labels sift through endless amount of gruesome internet content in order to label what is toxic to reinforce machine learning. For this effort, workers received a wage of between $1.32 and $2 per hour.

Facebook has also used Sama to employ workers in the brutal task of reviewing and removing banned content before it seen by users. Time describes workers struggling with PTSD conditions from constant exposure to very graphic content without consistent access to counseling that is supposed to be available. Again, efforts to organize for higher pay and better conditions run smack into hostility.

Such digital sweatshops have become more common in the Global South. Some years ago Jeff Bezos was perhaps the first to publicly use the term ‘microwork.’ Bezos proclaimed ‘Think of it as microwork, so for a penny you might pay for someone to tell you if there is a human in the photo.’ This was the introduction of Amazon Mechanical Turk. It has been emulated by competitors such as Clickworker, Appen, and Scale. Most tasks on these sites last barely a minute and earn pennies. For workers in the Global North these sites largely fall under the ‘gig economy’ with workers using them to boost hours and stagnant wages. However for many in the Global South, an estimated 20 million workers undertake microwork globally, it is a full time job which is understandable considering the large percentage of the global workforce that toils in the informal economy. A survey by the International Labor Organization found that 36 percent of such workers regularly put in seven days a week.

What is to be done? Consumers always have a part to play pressuring companies about labor and environmental standards. Yet multinational corporations already routinely claim that their subcontractors are thoroughly vetted and clean. Battery recycling can hopefully become an increasing factor but it will not negate the need for hundreds of new mines. Cities across the U.S. could be redesigned to include more public transportation and walkability to reduce the demand for cars. However this idea has become yet another pinned down in the endless American ‘culture’ wars.

Clearly much more is needed. Mining is a vital part of the modern world but if left unregulated it is brutal to workers and toxic to the environment. Mines need to be unionized and even worker controlled. However what global supply chains demonstrate is that we face planetary problems, from climate change to the crisis of antibiotic resistant bacteria, to the dangers of AI therefore solutions will have to be international. This will require global planning and cooperation and an increasing decoupling of technology from market forces. Such a solution will not only free the world’s working class, but may well save all humans in the long run. This always sounds utopian, yet a better solution has yet to be put forward.