Blockchain companies see opportunities grow in ethical materials

Blockchain companies are competing to create ethical cobalt procurement platforms, including growing concerns over mining conditions in the lithium-ion battery supply chain.

This month, for example, Cobalt Blockchain and DLT Lab finalized a partnership announced in April to produce cobalt sourced from the Democratic Republic of the Congo (DRC).

Cobalt Blockchain, which holds export licenses for cobalt, copper, tin, tantalum and tungsten from the DRC, said in a press release that its Mintrax platform will provide "safe and transparent methods for tracking metals and minerals" .

Mintrax is the first blockchain platform of enterprise level that respects the framework of due diligence of the Organization for cooperation and economic development for the origin of minerals of ethical origin, said Cobalt Blockchain.

But it is far from the only deal with the problem of working conditions for artisanal miners in the DRC, which Nikkei Asian Review reported last month could worsen as Chinese companies tighten their grip on lithium-ion battery supply chain. [19659002] RCS Global, a company based in London, UK, is also developing a platform that, like Mintrax, is built on the IBM Hyperledger Fabric blockchain.

"The platform will be used to promote transparency and simplify compliance in the supply of cobalt and other minerals used in consumer products," said Jonathan Ellermann, director of the RCS Global project.

"The cobalt will be traced through the supply chain from the mine to the foundry, and then from the foundry to the dealer.There will be integration with the existing systems under a shared user interface."

The platform It sounds very similar to Mintrax, which Cobalt Blockchain said would employ a transactional flow developed in collaboration with BetterChain, a consortium based in Barcelona, ​​Spain that encourages responsible sourcing of minerals.

Meanwhile, another start up blockchain, Circulor, would have faced a similar problem in March, working on behalf of the BMW automaker.

"Circulor is working on a pilot for BMW to map the cobalt that is already assumed to be clean because it comes from jurisdictions such as Australia and Canada or from industrial production in the Congo," a Reuters report said .

The idea of ​​using the blockchain to improve the ethical supply of battery materials dates back at least a year.

In June 2017, HumanityX, an initiative of the Center for Innovation at the University of Leiden in the Netherlands, hosted a seminar with Fairphone, a body in the smartphone supply chain, for examine the use of blockchain technology to trace minerals.

Today, the concept is not only applied to the materials of the DRC. The Australian mining company Hastings Technology Metals, for example, is trying to use blockchain technology to mine the mine in the Yangibana mine and the processing plant in Western Australia.

However, the real prize for blockchain companies would be to repress bad working conditions among the artisanal miners of the DRC. "We decided to attack this area because we know the industry, we know geography and we know the challenges," said Loudon Owen, president and CEO of DLT Labs. "We will not do it without a fairly thorough insight on how to achieve success."

Adjusting the mining conditions of the DRC has been particularly challenging, not only because of the geopolitical issues of the country, but also because it is larger than Western Europe, he said, and has borders with eight other countries.

The difficult nature of the market makes it easy for artisanal miners to be subjected to oppressive working conditions with little or no supervision. "The types of abuse we've seen range from terrible health and safety, to a lack of health and safety, to extortion, to child labor," said Owen. "A lot of [miners] end up dying because they work underground in very dangerous conditions."

Caspar Rawles, a cobalt analyst with Benchmark Mineral Intelligence in London, said that if material of ethical origin was acceptable to industry, then platforms like Mintrax could contribute significant volumes to the supply chain.

"After media reports and stories regarding human rights issues associated with artisanal mining in the region, we realized that the industry needed to work with artisanal miners rather than trying to stop get this material, as it could lead to further problems, "he said.

"But it's still the early days and the supply chain reaction has yet to be seen," added Rawles.

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