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Ford, IBM, others pilot blockchain platform for mining transparency


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Ford, IBM, others pilot blockchain platform for mining transparency

Ford Motor Co., IBM International Group Capital LLC, LG Chem Ltd., Zhejiang Huayou Cobalt Co. Ltd and RCS Global announced plans Jan. 16 to use blockchain technology to trace ethically sourced minerals.

The companies launched a pilot that will trace the production, trading and processing of cobalt, a key component of lithium-ion batteries used in electric cars, laptops and mobile devices. They hope to ultimately create a cross-industry blockchain that could track a range of minerals — including tantalum, tin, tungsten and gold — used in consumer products and hold participants accountable to the Organization for Economic Cooperation and Development's sourcing standards.

The pilot comprises a simulated sourcing scenario on IBM's Blockchain Platform that tracks cobalt from Huayou's mines in the Democratic Republic of the Congo to LG Chem's cathode and battery plant in South Korea before the cobalt heads to a Ford plant in the U.S. The pilot is expected to be completed around mid-2019.

The rapid increase in demand for cobalt, forecast to rise eightfold by 2026 according to a Morgan Stanley report, poses political, environmental and social challenges. Mined chiefly in the DRC, cobalt was recently declared a strategic metal by the country's government, tripling the royalty miners pay for the metal from 3.5% to 10%.

Though it is initially targeted at large-scale miners, the project eventually aims to help smaller artisanal operators, which have been linked to child labor, sell their raw materials globally and adhere to internationally ratified ethical standards.

"We remain committed to transparency across our global supply chain. By collaborating with other leading industries in this network, our intent is to use state-of-the-art technology to ensure materials produced for our vehicles will help meet our commitment to protecting human rights and the environment," said Lisa Drake, vice president for global purchasing and powertrain operations at Ford.