New Bill Slams the Door on PRC-Refined Cobalt: Importers Face Automatic Ban on Battery Materials

The aptly named COBALT Supply Chain Act (COBALT stands for China’s Odious and Brutally Atrocious Labor Trafficking) is a direct shot at supply chains for batteries used in everything from electric vehicles to your smartphone. This bill creates a massive new hurdle for importing goods that contain cobalt refined in the People’s Republic of China (PRC), automatically assuming they were made using forced or child labor. Specifically, 180 days after the bill becomes law, U.S. Customs and Border Protection (CBP) must block any “covered goods”—meaning any product containing PRC-refined cobalt—from entering the country, unless the importer can prove otherwise (SEC. 4).

The Automatic Ban and the Importer’s Burden

This legislation flips the script on enforcement. Instead of the government having to prove a shipment used forced labor, the importer now has to prove it didn't. To get a shipment of covered goods past CBP, the importer must present "clear and convincing evidence" that the cobalt in their product was not refined in the PRC (SEC. 4). That’s a serious burden of proof, requiring meticulous supply chain tracking that many companies, especially those dealing with complex battery components, may not currently have. For importers, this means significant new compliance costs and the very real risk of having goods seized at the border if their documentation isn't perfect. If you're running a business that relies on imported electronics or EV components, this is the fine print you need to be reading right now.

Why Cobalt? The DRC Connection

The bill targets cobalt because it is a critical mineral for rechargeable batteries, and its supply chain is notoriously problematic. Over half of the world’s cobalt is mined in the Democratic Republic of the Congo (DRC), where up to 40,000 children are estimated to be involved in small-scale mining. Crucially, the bill notes that PRC companies own or finance 15 out of 19 cobalt mines in the DRC and control the vast majority of the world’s refining capacity (SEC. 2). By focusing the ban on PRC-refined cobalt, the bill aims to cut off the financial pipeline that supports these abusive labor practices in the DRC while simultaneously addressing national security concerns over the PRC’s near-monopoly on this essential material (SEC. 3).

The Government’s Strategy and a Curious Exemption

To back up the import ban, the Forced Labor Enforcement Task Force must develop a detailed strategy within 120 days. This strategy will include creating lists of PRC refining companies, DRC mining entities owned by PRC interests, and tools CBP can use to trace the supply chain and prevent goods from being rerouted through third countries like Canada or Mexico (SEC. 5). The goal is to make sure the ban is actually enforceable.

However, there is one notable carve-out. The bill requires the President to certify every year that all vehicles purchased by the U.S. government were free of parts made with forced or child labor from the DRC or the Xinjiang Uyghur Autonomous Region (XUAR). But here’s the catch: vehicles bought by the Department of Defense (DoD) are exempt from this annual certification (SEC. 6). While the rest of the government must maintain a clean supply chain for its fleet, the DoD is given a pass, which seems like a substantial loophole for a major federal purchaser.