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Raw Material Sourcing

SUPPORTING SUPPLIER RESPONSIBILITY

As automotive battery demand expands globally, access to critical battery materials is of increasing importance.

We are securing supplies of raw materials in order to manufacture our battery chemistry, which requires cobalt and battery-grade nickel and lithium. We are looking around the globe and throughout the value chain—from mines to refiners to battery precursors—to secure supplies, understand where investment and partnerships can yield benefits and explore areas of untapped value that lower costs.

When seeking out new partnerships to meet future demands in product sourcing, we are guided by our core values. We are committed to upholding human rights across our network of suppliers. In an effort to formalize these values, several policies were created: our Supplier Code of Conduct, Human Rights Policy and Conflict Minerals Policy. We understand that long-term success starts with a company’s value system and a principled approach to doing business.

Tracing Raw Materials to the Source

Many of the advanced technologies in our portfolio require the use of 3TG minerals (e.g., tin, tantalum, tungsten and gold) that could be mined in conflict-affected and high-risk areas. We utilize a common industry approach to identify the smelters or refiners (SORs) in our supply chain. While doing this, we also identify the origin of certain minerals used in our supply chain. The Conflict Minerals Reporting Template (CMRT) is the form we send to our Tier I suppliers to identify these SORs, which are the pinch point in the supply chain. In 2020, 3,079 supplier locations were considered in-scope for GM’s Conflict Minerals Program, and we received responses from 87% of these suppliers.

45
3TG smelters or refiners were asked to join RMAP
in 2020.

After the SORs are identified, we validate whether they have passed the Responsible Minerals Assurance Process (RMAP) that is aligned with the Organisation for Economic Co-operation and Development (OECD) due diligence framework. This process, administered through the Responsible Minerals Initiative (RMI), employs a risk-based approach to validate that SORs have processes in place for responsible mineral procurement. Those SORs that have passed this assessment are considered conformant to the RMAP.

Annual Securities and Exchange Commission (SEC) disclosure of conflict mineral sourcing is fully integrated into our business processes. A dedicated team analyzes information in CMRT reports from more than 2,600 direct supplier locations. Some duties of the team include, but are not limited to, conducting due diligence on the source and chain of custody of minerals in our supply chain, and SOR outreach to encourage participation in the RMAP.

We have structured an internal management system to support supply chain due diligence for conflict minerals. Part of that structure includes a compliance committee of cross-functional GM leaders and an executive steering committee to provide leadership and direction for the program.

Beyond our own reporting activities, we work with our suppliers regularly to increase education and awareness regarding conflict minerals, including training opportunities and dedicated communication channels. We continue to collaborate with others in the industry to educate suppliers. We are active in the Automotive Industry Action Group (AIAG) Responsible Materials Work Group, which works on common automotive industry solutions with other OEMs and suppliers.

We are also an active participant within the RMI and corresponding RMI working subgroups. The Smelter Engagement team is one of these subgroups that enables us to have a high degree of direct SOR engagement. We have found that a coordinated outreach by the Smelter Engagement team to nonconformant SORs can be effective at encouraging them to move forward with the RMI assessment. Likewise, RMI-sponsored SOR pre-audit visits have also been effective in this effort.

If SORs have not been validated as conformant to the RMAP, we encourage them to participate in this third-party assessment. GM sent communications to 45 3TG SORs during the 2020 calendar year.

Due to COVID-19 concerns and restrictions, GM did not conduct on-site SOR visits in 2020. However, one of our conflict minerals team members was chosen by RMI to function as a Single Point of Contact for SORs and has answered their questions about the RMAP virtually.

As electrification grows in importance to our vehicle portfolio, so too does the focus on cobalt, which is used in lithium-ion batteries. There are common, industrywide concerns around the use of child labor in the mining of cobalt, which would represent a violation of our Supplier Code of Conduct and Terms and Conditions in our supplier contracts. Through our membership in RMI, we are working directly and actively in a cobalt subgroup in the following areas:

  • Utilizing the Cobalt Reporting Template (CRT) with key suppliers. The CRT is an important tool in the identification of refiners in the cobalt supply chain.
  • Identifying and assisting with the disposition of cobalt companies to determine if these companies meet RMI’s industry specification for an eligible cobalt refiner.
  • Performing outreach to cobalt refiners that are not conforming to the RMI industry standards to encourage them to go through the RMAP for cobalt. We have reached out to 21 cobalt refiners for the 2020 calendar year. In addition, another 10 cobalt refiners are actively engaged or in communication with RMI in pursuing the third-party audit as part of the RMAP.
  • Utilizing the RMAP assessment. Refiners have been identified as the choke point in the cobalt supply chain because of their limited number of actors. The RMAP assessment is used to validate that cobalt refiners have systems and processes in place to conduct due diligence in accordance with internationally recognized frameworks.
  • Conducting due diligence of key GM Tier I suppliers to receive assurance from these suppliers that responsible sourcing of cobalt is a top priority for them.
  • Functioning as a Single Point of Contact on behalf of RMI for several cobalt refiners, assisting them in their pursuit to join the RMAP.

Another area of concern is the risk of child labor in mining mica. We are working collaboratively within RMI’s subgroup on mica that includes other RMI member companies to proactively address concerns.

The RMI subgroup is working with the Responsible Mica Initiative in the following areas:

  • Identifying processors of mica in the supply chain using a Company Identification Questionnaire.
  • Creating a joint due diligence standard for these processors.
  • Dispositioning processors of mica using RMI methods and adding them to the RMI smelter/refiner database.

A Mica Reporting Template was recently issued by RMI for public use that is similar to other mineral reporting templates. We have sent this template to key suppliers that use mica to identify mica processors, a key step toward responsible sourcing.