IBM industries will reportedly lead an alliance of companies by making use of blockchain technology to further ensure that the supply chain for minerals will be ethically sourced. The alliance is said to include companies like Huayou Cobalt, LG Chem, Ford Motor, and RCS Global.
The coalition will use mined goods such as blood diamonds and minerals to fuel wars by making use of the security and transparency feature of the digital ledger technology which we call as “blockchain”. The technology will be used by the firms simply to verify the uniqueness of an item such as a lithium mineral or a diamond. The shipment of the mined goods will be tracked further from mine through the distribution channel until it reaches to the ultimate buyer.
IBM as of now, have invested a large amount of money in blockchain technology. It has contributed in many blockchain-related projects such as with Seagate to reduce counterfeiting of hard drives, with Maersk to reduce shipping costs, and with Hu-manity.co to protect your privacy.
In addition to above, Kutcho Copper spin-out MineHub Technologies has also collaborated with IBM to improve financing, logistics, operational efficiencies, and cost reduction in high-value mineral supply chains, from the mine to the buyer by making use of blockchain technology. Other partners working on top of the IBM blockchain platform include ING, Goldcorp, Ocean Partners USA, Kutcho Copper, and Wheaton Precious Metals.
The coalition is being created with the goal to create an open, industry-wide network that will validate and trace minerals as well as other materials for the consumer electronics and automotive industries. The first project after the current alliance will focus on sourcing industrially mined cobalt.
In the initial stage, to demonstrate how materials in the supply chain are produced, processed and traded, a blockchain pilot is created to keep a check on the process. Based on a simulated sourcing scenario, the pilot created will trace the cobalt produced at Huayou’s industrial mine site in the Democratic Republic of Congo (DRC) through the supply chain as it travels from the battery plant in South Korea and mine and smelter to LG Chem’s cathode plant and finally into a Ford plant in the United States.
Manish Chawla, general manager of global industry products industry at IBM mentioned in a statement that “With the growing demand for cobalt, this group has come together with clear objectives to illustrate how blockchain can be used for greater assurance around social and environmental sustainability in the mining supply chain,” He further added, “The initial work by these organizations will be used as a precedent for the rest of the industry to be further extended to help ensure transparency around the materials going into our consumer goods.”
All the participants in the network as a validation process will be validated against responsible sourcing standards that will be developed by the Organization for Economic Cooperation and Development (OECD).