Panasonic’s Cobalt Supplies Affected By U.S. Sanctions

Tesla Panasonic Show stand

JUL 20 2018 BY MARK KANE 29

Tesla’s battery partner – Panasonic – deals with U.S. sanctions concerns as the company was unable to determine how much of the cobalt for batteries for Tesla cars comes from Cuba.

Because cobalt from Cuba isn’t welcome anymore, the Japanese manufacturer was forced to suspend relations with a Canadian supplier.

Panasonic Cell – 18650 for Model S and X

“Two sources familiar with the matter told Reuters that some of the cobalt that Panasonic uses to make Tesla’s batteries is mined in Cuba by Canadian supplier Sherritt International Corp (S.TO).

Panasonic said it was unable to tell how much cobalt sourced from Cuba via its Canadian supplier ended up in the batteries it provided to the U.S. market “due to co-mingling of sources by its suppliers in several phases of manufacturing processes”.

“Panasonic has chosen to suspend its relationship with its Canadian supplier,” a spokeswoman said, without naming the supplier. She added that Panasonic had used cobalt from the Canadian supplier for batteries used in the Tesla Model S and Model X, but only after February this year.

“Panasonic has sought guidance from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) regarding its interpretation of the scope of the U.S. ban on Cuban-origin imports,” she said.”

Panasonic and Tesla jointly operate at the Tesla Gigafactory in Nevada, producing lithium-ion battery cells that contain cobalt. It’s not known how affected production will be, but a manufacturer that’s as big as Panasonic probably has multiple suppliers (Sumitomo Metal Mining in the Philippines, for example) around the world so it will resolve this one way or another.

The news provided by Reuters proves however that these days it’s not easy to do the battery or electric car business. Tesla needs to pay attention to the U.S.-China situation, there is the U.S.-Europe case on car imports and now also sanctions touching battery materials. The other place under fire is the Democratic Republic of Congo:

“Companies are under pressure to prove that the minerals they consume are sourced from mines that do not employ children or cause major environmental damage. Global cobalt supply is dominated by the Democratic Republic of Congo, which is riven by conflict and political instability.”

The only good news here is that Tesla and Panasonic are targeting cobalt-free batteries in the future.

Source: Reuters

Categories: Tesla

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29 Comments on "Panasonic’s Cobalt Supplies Affected By U.S. Sanctions"

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Ars Technnica has a particularly atrocious story about this today. They actually put a deceptive picture of DRC cobalt mining in the article, even though this is a nothing story about a small bit of Cuban cobalt that is now disallowed due to U.S. sanctions.

No wonder Elon gets angry about the press.

He should be much more angry about Panasonic using a supplier that gets cobalt from a sanctioned country like Cuba. Of all the problems Tesla has had, didn’t see “violations of US sanctions” coming.

On Sherritt International’s (supplier of cobalt) website, it states clearly the following:
“Sherritt is one of the world’s largest producers of nickel from lateritic sources with operations in Canada, CUBA and Madagascar. We pride ourselves on being a leading low-cost producer that generates sustainable prosperity for our employees, investors and the communities in which we operate. We are also the largest independent energy producer in CUBA, with extensive oil and power operations across the island. ”
Someone obviously didn’t perform enough due diligence when vetting suppliers.

Cuba isn’t on the hate list it used to be. Delta flies there now.

The Republican party hates Cuba believe me CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS thanks

And he should be angriest at the US government for making these stupid sanctions and trade barriers that they have done. Free trade across the borders is best for everyone.

What free trade? All other countries put both much higher tariffs and non tariff barriers on US! Free for others to enter US market but not the other way! Why did Chevy Volt cost $20,000 more in Europe? Use your brain Not your emotion!

The free(er) trade treaties that countries in Asia and Europe are busily negotiating with each other, leaving us out, due to the at least stupid and incompetent — and it’s looking more and more like treasonous — current Presidential administration.

Seriously, Cuba? You should get a rocking chair and sit on your front porch so you can yell “Get off my lawn, you d*mn Cubans!”

We have a President who is actively collaborating with an enemy country which is subjecting the U.S. to ongoing cyber and information warfare. Why the heck should we waste time worrying about Cuba?

Keeping sanctions going against Cuba is pure politics, and it’s incredibly stupid. If we were smart, we would end all sanctions against Cuba. The sanctions are just propping up the Communist government there. Free trade with Cuba would bring and end to Communist rule there, and likely sooner rather than later.

The Cuban Cobalt, that Panasonic sourced, was through the Canadian company Sherritt International Corp. There is absolutely NO DRC African Cobalt linkage or association, with this latest US sanction Panasonic News Story.

They didn’t say Tesla used cobalt from the DRC. Looks like they just included a file photo of what cobalt mining looks like.

Yes that is the problem. By including that photo, they imply that it is. I had to re-read the headline to make sure it wasn’t really about cobalt from the DRC. They included a photo that is totally irrelevant to this news story, just to try to associate Tesla with terrible things going on in the DRC. That is bad journalism and a cheap shot at Tesla.

2/3’s of the world’s supply of cobalt is sourced from Congo. I don’t think it’s unreasonable to include a blurb about that in an article about cobalt.

It is not an article about cobalt. It is specifically about Panasonic halting supplies from a supplier because they found that cobalt from Cuba making its way into Tesla batteries in violation of US sanctions. Inserting photos and text about DRC is completely ridiculous for this article and is only there to try to tie Tesla to DRC issues.

Compare the Ars article with the original Reuters article which is quite reasonable, they even include a blurb about DRC issues, but in a much more appropriate way with context.

Here is the original article:

In my time as a writer on an EV news site, I was told by my mentor to always start the article with the core subject at hand, then expand the scope and add some more general background information about the overall topic in the 2nd half of the article to give the “big picture” view.

It’d be like writing an article about the recent tariffs we’ve slapped on China WITHOUT mentioning the Orange One.

I agree. Reuters did exactly that, Ars did it deceptively IMHO.

Which mentor taught you to make up falsehoods and troll EV sites?

“Now disallowed”???? Cuba trade sanctions date to the Kennedy administration!

Lol right. If we’re speaking in cosmic terms, I guess it was just recently disallowed.

Some were lifted under Obama but reinstated once tRump arrived, though I don’t recall the fine details of exactly what was allowed.

Cobalt is a global market. If supply from Cuba is restricted, demand and price go up for DRC cobalt. It doesn’t matter if one or two customers don’t buy directly from the DRC.

Importing oil from commie Venezuela is allowed, but importing few bits of Cobalt from Cuba is not allowed? I’d say we don’t allow imports from countries we tried to invad except we import from Vietnam.

Conclusion: Cuba should rename itself Vuba, because US foreign policy likes countries that start with V. /S

…or maybe it’s not the first letter? How about rename to Corway. Or Clovenia. The current occupant seems to have an affinity to those.
But I have the feeling the moment he sees pictures of the citizens the scheme will fall through.

We import from Venezuela, so pictures of citizens won’t matter. Besides, only DUMP has C affinity, but this crazy policy was started by Democrats under Kennedy (or was it Johnson?) and continued on through all Dumbocrat admins.

It’s like the crazy immigration policy; all of that madness was there even during pre-Dump era, but now we just read about DUMP and not the policy supported by Dumbocrats that enabled him. Focusing on DUMP loses sight of what’s really going on: crazy policies from both sides.

Cuba just needs to open a Trump resort that gives 100% access to the property and free tax for the next 50 years on the island and I am sure the decision would be reverted…

Yeah, the only reason the U.S. stupidly keeps up trade sanctions on Cuba is because of some grandparent expatriate Cubans living in Florida who are still angry about the Communist takeover of Cuba, and still vote based on that anger. Everybody else got over that decades ago. If Florida wasn’t a swing state in the Presidential elections, we likely would have ended the counter-productive sanctions against Cuba decades ago.

The Obama administration moved in the right direction by easing the sanctions, but of course The Orange One stupidly reversed that.

I’m waiting for the day the entire EV industry verifies they’re not getting any unethically (e.g., slave child labor) sourced cobalt from the DRC. I’m willing to take a hit to EV progress until this issue resolves. Beyond the obvious ethical issues, selling cobalt for a fair price under reasonable working conditions is a golden opportunity for the DRC to emerge out of its desperate poverty and human-development (e.g., child mortality) situation.

Stopping a contract because of Cuban sourcing is like a sad joke in comparison.

There are a lot of R’s who post here on a regular basis. If your Congress members you elected are also R’s, please take the time to write or call and demand they push an exemption for Cuban supplied Cobalt from the sanctions. Remind them you voted for them, and are members of their party.

People who are in states with D’s representing them aren’t enough, they aren’t in power. It has to be R’s in states represented in R’s pushing for change if anything is going to happen.

Buy cobalt from Australia.