Although the concept of blockchain can not be simpler, the same can not be said of its adoption, as it requires that stakeholders along the supply chain work together. This has led to numerous trials by large and small companies, some skepticism and few commercial blockchain applications in use at the moment.
However, some situations require immediate action, as traditional operations do not provide accountability or are extremely opaque processes that are economically unprofitable. An example is the supply of cobalt, a trace element extracted in the depths of the Democratic Republic of the Congo (DRC), a country that owns 60% of the known cobalt reserves in the world.
The focal point of the issues arising from cobalt mining is not the complexity of the supply chain. It has more to do with the impact that mining creates on the environment and the appalling human rights violations that exist in what is one of the poorest nations on the planet. Cobalt is an expensive element, and this causes poor rooms to work in mines, often extracting the mineral without gloves or masks.
Companies in the DRC mining sector are also known for the use of underage children, a practice that is vehemently opposed by human rights activists, but is secretly done in the same way. This is where the blockchain could be used, forcing the mines to clean up their practices and to give more responsibility to the cobalt supply chain.
Cobalt is a small but necessary "ingredient" in lithium-ion batteries that power electric vehicles (VE), making its extraction very important for manufacturers of original electric vehicle equipment. As a growing number of consumers are asking to replace petrol cars with their electric counterparts, a consistent and predictable supply of cobalt is essential to meet this demand.
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Ford Motor Company (NYSE: F) is taking the first steps to increase transparency in the mining process, using blockchain to track and validate the cobalt production process – a way to curb illegal practices and intentional exploitation. Ford is working with Huayou Cobalt, IBM, RCS Global and LG Chem for this blockchain pilot. The pilot program was built on the IBM blockchain platform powered by Linux's Hyperledger Fabric and its users are established at each node in the supply chain.
"We remain loyal to transparency through our global supply chain, collaborating with other leading industries in this network, our intent is to use the most advanced technology to ensure that the materials produced for our vehicles will help meet our commitment to protect rights and the environment, "said Lisa Drake, vice president of purchase and transmission operations at Ford.
The pilot will create an immutable ledger that traces the cobalt produced in the mining site of Huayou, which will then move to the foundries of LG Chem in South Korea (cobalt is a by-product of copper production), and then head to a plant of Ford production in the United States
The network will follow the procurement standards developed by the Organization for Economic Cooperation and Development (OECD). The pilot should work for the next few months until mid-2019. Once completed successfully, the program will be expanded to include other batteries and raw materials, including minerals such as tantalum, tin, tungsten and gold – because many of these elements come from regions in conflict or are burdened by the weight of crony capitalism.
That said, blockchain is not a solution that would be tailor-made for every existing supply chain problem. The technology is still nascent and must be proven before it can be a viable alternative to traditional methods of storing and sharing data through supply chains. And it is precisely in this capacity that organizations such as Blockchain in Transport Alliance (BiTA) would be useful, as it brings together hundreds of companies working in the logistics and transport space, helping channel efforts and creating open standards for the adoption of blockchains. easier. .
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