Ford Motor Company, Huayou Cobalt, IBM, LG Chem, and RCS Global announced earlier this week they are using blockchain technology to trace and validate ethically sourced minerals as a way to support human rights and environmental protection while helping infuse more transparency into global mineral supply chains.
The companies reported they will begin with a pilot focused on cobalt and explore the creation of an open, industrywide blockchain platform that could be used to trace and validate a range of minerals used in consumer products. It was revealed:
“The blockchain pilot is already underway and seeks to demonstrate how materials in the supply chain are responsibly produced, traded and processed. For this pilot based on a simulated sourcing scenario, Cobalt produced at Huayou’s industrial mine site in the Democratic Republic of Congo (DRC) will be traced through the supply chain as it travels from mine and smelter to LG Chem’s cathode plant and battery plant in South Korea, and finally into a Ford plant in the United States. An immutable audit trail will be created on the blockchain, which will include corresponding data to provide evidence of the cobalt production from mine to end manufacturer.”
Participants in the network will reportedly be validated against responsible sourcing standards developed by the Organization for Economic Cooperation and Development (OECD). The companies went on to add:
“While the initial focus is on large-scale miners (LSMs), an important objective of the group is to help increase transparency in artisanal and small-scale mining (ASMs) and enable these operators to sell their raw materials in the global market, while they meet their internationally ratified responsibility requirements. The network can help enable ASM operators to partner with due diligence data providers and, ultimately, join a blockchain-based network of validated participants. The pilot will also explore the use of incentives or financial benefits for ASMs and their local communities impacted by mining.”