Ford Motor Company, Huayou Cobalt, LG Chem and RCS Global have come together in a pilot project led by IBM that uses the record-keeping ledger technology blockchain to trace and validate the mineral cobalt.
The companies represent each major stage of the cobalt supply chain, from mine to end-user. The aim of the project is to demonstrate how materials in the supply chain are produced, traded and processed.
The project will determine whether an open, industry-wide blockchain platform is possible for tracing and validating a range of minerals used in consumer products.
Cobalt is one of the latest minerals to raise concerns over its production and sourcing. The mining of certain minerals, often referred to as conflict minerals, can help fund armed groups in the conflict region of the Democratic Republic of Congo (DRC). The US Dodd Frank Act and the EU’s Regulation on conflict minerals – which will enter into force in 2021 – both concern the issue.
IBM says cobalt is a good starting point for the project because it is in high demand for its use in lithium-ion batteries, which power a wide range of products such as laptops, mobile devices and electric vehicles. The typical electric car battery requires up to 20 pounds of cobalt while a standard laptop requires around one ounce.
Its significance was highlighted in 2017, when technology giant Apple extended its responsible sourcing initiative to cover cobalt.
This blockchain technology – developed by IBM – will focus on cobalt produced at Huayou’s industrial mine site in the DRC. It will then be traced through the supply chain as it travels from mine and smelter to LG Chem’s cathode and battery plants in South Korea, and finally into a Ford automotive facility in the US.
“By collaborating with other leading industries in this network, our intent is to use state-of-the-art technology to ensure materials produced for our vehicles will help meet our commitment to protecting human rights and the environment,” Ford’s vice president of global purchasing and powertrain operations, Lisa Drake, said.
The blockchain technology will create a transparent audit trail which will provide evidence of the cobalt production from mine to end manufacturer. Participants in the network will also be validated against responsible sourcing standards developed by the OECD.
Once the pilot is complete, organisations of all sizes and roles in the supply chain will be invited to join the network. A particular focus will be on the automotive, electronics, aerospace and defence industries and their supply chain partners such as mining companies and battery manufacturers.
The project will also establish a governance board representing members across these industries, to ensure the platform’s “growth, functionality and commitment to democratic principles”.
The pilot is expected to be completed by the middle of this year.
What is blockchain?
Blockchain is a digital record-keeping system that enables the creation and maintenance of a growing number of records, allowing fast tracking of information. It was originally created to manage transactions through the crypto-currency Bitcoin, but has since shown potential for sharing and retrieving many other forms of data in an open and transparent way.
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