Our activities in the lithium supply chain

November 04, 2020 - The mining of the battery raw material lithium often attracts criticism due to social and ecological aspects. To ensure the responsible sourcing of lithium, Mercedes-Benz emphasizes this raw material to be extracted in a sustainable manner, and that the mining standard of the Initiative for Responsible Mining Assurance (IRMA) is anchored in the supply chain contracts in the future.

Responsibly sourced and processed raw materials are a major basis for a sustainable Mercedes-Benz electric fleet. As part of the Human Rights Respect System we therefore work on recognizing and avoiding risks and negative effects early on. As a first step we have made the lithium supply chain transparent. One part of the lithium in our supply chains comes from Australia, another from Chile.

Based on desk-based research, but also through dialogue with non-governmental organizations (NGOs), we have identified Chile in particular as a risk hot spot. Identified risks are primarily associated with lithium mining by brine extraction and include various negative environmental impacts as well as adverse effects on indigenous people and communities.

In order to address the environmental consequences of lithium mining and the impact on the local population, we are in contact with our direct suppliers and sub-suppliers. An important aspect is to involve the local people, and to establish a dialogue between them and the local decision-makers. We also maintain an exchange with relevant stakeholders such as NGOs and development organizations. We use the impulses from these dialogues with the aim of working towards a sustainable improvement of the situation for the local population and environment.

New requirements for suppliers

With new requirements for its battery cell suppliers, Mercedes-Benz is going a step further. In the future, the company will only source battery cells with lithium from certified sources. The same applies to cobalt.

In order to achieve this, Mercedes-Benz Procurement is making the industry-wide recognized “Standard for Responsible Mining” of the "Initiative for Responsible Mining Assurance" (IRMA) one of the key criteria for supplier decisions and supplier contracts. In the company’s contracts, partners will need to commit in the future to working within their own supply chain to source exclusively from raw material suppliers who are audited in accordance with the IRMA mining standard. The most important criteria of this standard include both human rights aspects and the environmentally friendly mining of raw materials. The standard also takes into consideration further social and societal aspects that are related to the consequences of industrial mining. In the future, the supply chains will also be regularly audited as part of the certification.

Responsible Lithium Partnership

To further understand the risks and achieve effective, targeted addressing, we have commissioned a study together with Volkswagen. The study was conducted in January 2020 by diverse experts on-site in Chile and the Salar de Atacama – including interviews with mining companies, government agencies and ministries as well as indigenous people and local NGOs. The study identified the following key risks related to lithium mining in the Salar de Atacama:

  • Adverse environmental impact
  • Threats to indigenous people and communities
  • Incomplete understanding of the human-environment system

Therefore, we have decided to initiate a "Responsible Lithium Partnership" together with several other companies. The aim of the initiative is to work towards responsible natural resource management, including lithium, in Chile’s Salar de Atacama. The cross-industry partnership is funded at its inception by BASF, Daimler AG, Fairphone, and Volkswagen Group. The partnership intends to foster a dialogue among local stakeholders, generating and synthesizing scientific facts and seeking solutions in a participatory manner.

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