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The Ford Motor Company, the Huayou Cobalt, the LG Chem and the RCS Global have met in an IBM-led pilot project that uses the blockchain technology of the master register to track and validate the mineral cobalt.
The companies represent each major phase of the cobalt supply chain, from mine to the end user. The aim of the project is to demonstrate how the materials in the supply chain are produced, exchanged and transformed.
The project will determine if a blockchain platform open to the whole industry is possible to track and validate a range of minerals used in consumer products.
Cobalt is one of the last minerals to cause concern for its production and supply. The extraction of certain minerals, often called conflict minerals, can help fund armed groups in the conflict region of the Democratic Republic of the Congo (DRC). US law Dodd Frank and the EU Conflict Minerals Regulation – which will come into force in 2021 – both address the issue.
IBM states that cobalt is a good starting point for the project because it is in great 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 about an ounce.
Its significance was highlighted in 2017, when technology giant Apple extended its sourcing initiative to cover cobalt.
This blockchain technology – developed by IBM – will focus on the cobalt produced at the Huayou mining industrial site in the DRC. It will then be traced through the supply chain as it travels from the mine and foundry to the LG Chem cathode and battery facilities in South Korea, and eventually into a Ford car plant in the United States.
"By partnering with other leading industries in this network, our intent is to use state-of-the-art technology to ensure that the materials produced for our vehicles will contribute to our commitment to protecting human rights and environment, "Ford's global vice president of purchasing and powertrain operations, Lisa Drake, said.
Blockchain technology will create a transparent control trail that will provide evidence of cobalt production from the mine to the final manufacturer. The participants in the network will also be validated by the responsible sourcing standards developed by the OECD.
Once the pilot is complete, organizations of all sizes and roles in the supply chain will be invited to join the network. Particular attention will be paid to the automotive, electronics, aerospace and defense industries and to their supply chain partners, such as mining companies and battery manufacturers.
The project will also establish a board of directors representing the members of these industries, to ensure "growth, functionality and commitment to democratic principles" of the platform.
The pilot should be completed by the middle of this year.
What is the blockchain?
Blockchain is a digital archiving system that allows the creation and maintenance of a growing number of records, allowing rapid monitoring of information. It was originally created to handle transactions through cryptographic bitcoins, but since then it has shown the potential for sharing and retrieving many other forms of data in an open and transparent manner.
Find out more in the Chemical Watch management software guide
