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Lack of ethical cobalt undermines Tesla debt issue

In the 111-page draft prospectus of Tesla’s proposed $1.5bn senior note offering that came out this past week, the word “cobalt” appears only once. On page 29 you will find a mention of the metal, in a list of potentially at-risk materials including steel, copper and so on.

This cursory mention of the electric carmaker’s dependence on the metal must have passed a formulaic test of what securities laws require. It may not, however, pass a laugh test among those familiar with the Democratic Republic of Congo, which accounts for more than 60 per cent of world cobalt production and is the principal prospective source of new supply.

It has become more apparent that cobalt supply could be the choke point for the mass production of electric vehicles that are capable of replacing the standard car or light truck. Cobalt is a critical component for the high energy and power versions of lithium-ion batteries. Continue reading…