Cobalt production leads to 10,000 families losing their homes in DR Congo

//Cobalt production leads to 10,000 families losing their homes in DR Congo

Cobalt production leads to 10,000 families losing their homes in DR Congo

The North Africa Post: DR Congo to relocate 10,000 families from cobalt-rich region

Article published: Dec 18, 2019

IB Economics syllabus: microeconomics (negative externalities of production)

Authorities in the Democratic Republic of Congo plan to relocate 10,000 families from a town which is rich in cobalt. This is due to the fact that the resource is worth multi-billion dollars, and the town is in the way of mining. According to the governor, “What is under the ground does not belong to the individuals but to the state “which has the power to relocated and compensate the inhabitants.” This is a clear negative externality of production as households (who have absolutely nothing to do with the production or consumption of cobalt) are negatively affected by the spillover costs of production, namely that they have to leave their homes.

Cobalt is used to produce batteries that are used in laptops, smart-phones and electric cars. As global demand is on the increase for battery-powered electric goods, so does the demand for cobalt increase. At the same time, cobalt mining is also linked to child labour (another negative externality), check out this interesting article about the topic by the Financial Times.

Source of image: The North Africa Post

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By | 2019-12-27T13:58:56+00:00 December 21st, 2019|Micro|Comments Off on Cobalt production leads to 10,000 families losing their homes in DR Congo

About the Author:

My name is Daniel Szekely and I work as an IB Economics tutor, examiner and teacher. Having earned an MA degree in Economics at the University of Aberdeen, I started my career as a financial analyst at Morgan Stanley, one of the largest investment banks of the world. Yet, despite the promising career prospects of the banking industry, I decided to make a larger social impact by becoming a teacher. Currently, I teach IB Economics at SEK Budapest International School and have been an examiner for over 6 years. I started EconDaddy as a simple blog to share great articles with my students and others taking IB Economics around the world to use for their commentaries. Being a practicing IB Economics tutor, I have first hand insight into the most common mistakes of students, so the EconDaddy blog now also provides exam and commentary writing tips.

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