Graphite: The Newest Mineral Under Public Scrutiny

Oct 4, 2016 2:55 PM ET

The electronic and automotive industries are facing increased scrutiny as environmental and ethical concerns regarding graphite productions grow. Already under pressure to determine “conflict-free” Tin, Tungsten, Tantalum and Gold (3TG) sources under the US federal regulation Dodd-Frank 1502, manufacturers and suppliers are now also being pushed to also investigate graphite sourcing throughout their supply chains.

The environmental implications of graphite production are now being ushered into public scrutiny by The Washington Post in an expose rife with interviews of local villagers impacted by graphite pollution and companies in the battery supply chain.

Graphite, a mineral used in lithium-ion batteries, is an essential component of smartphones, laptop computers, and electric cars. China has become the center for graphite production and distribution; the Chinese company BTR supplies approximately 75% of the market demand for natural graphite. Direct buyers include Samsung SDI, LG Chem and Panasonic, who then manufacture lithium-ion batteries for consumer companies including Samsung, LG, GM, and Toyota.

Reporters interviewed residents in five towns located near graphite companies that supply to BTR, and found the same complaints regarding graphite production – it pollutes the air, contaminates drinking water, and damages their crops. Several reported that no action was being taken by the plants to reduce pollution.

The Washington Post also surveyed several companies throughout the battery supply chain regarding their use of graphite and any efforts to mitigate their environmental impact. Panasonic reported that they had directly investigated graphite companies and are “taking  immediate corrective action” after finding evidence of pollution. Electric car companies such as Tesla were also questioned about the source of their graphite. In light of these findings, the Post drew attention to public commitments made by electronics companies such as Samsung, Apple and LG Chem to minimizing their environmental impact and improving the lives of local residents.

The Post acknowledges that supply chain transparency is very difficult to achieve; knowing the source of graphite requires a multi-tiered investigation into the supply chain and a long, complex chain of communication. To respond to the pressures of civil society, consumer companies will have to take concrete actions to prove their commitment to supply chain sustainability, ie: by setting the bar for ethical sourcing policies, requiring their supply chains to adhere to them, and taking corrective action for infringements that are uncovered.