ARMONK, N.Y., Jan. 16, 2019 /PRNewswire/ -- Committed to
supporting human rights and environmental protection while helping
infuse more transparency into global mineral supply chains, Ford
Motor Company, Huayou Cobalt, IBM (NYSE: IBM), LG Chem and RCS
Global announced plans to use blockchain technology to trace and
validate ethically sourced minerals.
The group, which includes participants at each major stage of
the supply chain from mine to end-user, will begin with a pilot
focused on cobalt and explore the creation of an open, industrywide
blockchain platform that could ultimately be used to trace and
validate a range of minerals used in consumer products.
Cobalt is in high demand for its use in lithium-ion batteries,
which power a wide range of products such as laptops, mobile
devices and electric vehicles. According to a report from Morgan
Stanley, by 2026, demand is expected to multiply eightfold,
especially for its use in electric vehicles and consumer devices*.
The typical electric car battery requires up to 20 pounds of cobalt
and a standard laptop requires around one ounce of the mineral.
The blockchain pilot is already underway and seeks to
demonstrate how materials in the supply chain are responsibly
produced, traded and processed. For this pilot based on a simulated
sourcing scenario, Cobalt produced at Huayou's industrial mine site
in the Democratic Republic of
Congo (DRC) will be traced through the supply chain as it
travels from mine and smelter to LG Chem's cathode plant and
battery plant in South Korea, and
finally into a Ford plant in the United
States. An immutable audit trail will be created on the
blockchain, which will include corresponding data to provide
evidence of the cobalt production from mine to end
manufacturer.
Participants in the network will be validated against
responsible sourcing standards developed by the Organization for
Economic Cooperation and Development (OECD).
Traditionally, miners, smelters and consumer brands rely on
third-party audits to establish compliance with generally accepted
industry standards. Coupled with these assessments, blockchain
technology offers a network of validated participants and immutable
data that can be seen by all permissioned network participants in
real time. Blockchain can also be used to help network participants
address their compliance requirements.
While the initial focus is on large-scale miners (LSMs), an
important objective of the group is to help increase transparency
in artisanal and small-scale mining (ASMs) and enable
these operators to sell their raw materials in the global
market, while they meet their internationally ratified
responsibility requirements. The network can help enable
ASM operators to partner with due diligence data
providers and, ultimately, join a blockchain-based network of
validated participants. The pilot will also explore the use of
incentives or financial benefits for ASMs and their local
communities impacted by mining.
Built on the IBM Blockchain Platform and powered by the Linux
Foundation's Hyperledger Fabric, the platform is designed to be
adopted across industry. The solution is built to allow interested
parties of all sizes and roles in the supply chain easy access,
including original equipment manufacturers (OEMs) across the
automotive, electronics, aerospace and defense industries and their
supply chain partners such as mining companies and battery
manufacturers. Supply chain networks will be encouraged to join
this open, industrywide network to trace and validate minerals upon
successful completion of the pilot.
Work is expected to be extended beyond cobalt into other battery
metals and raw materials, including minerals such as tantalum, tin,
tungsten and gold, which are sometimes called conflict minerals, as
well as rare earths. Focus industries for the solution include
automotive, aerospace and defense, and consumer electronics. There
are plans for a governance board representing members across these
industries, to help further ensure the platform's growth,
functionality and commitment to democratic principles.
The pilot is expected to be completed mid-year 2019.
*Morgan Stanley Research. One billion BEVs by 2050?"
(May 5, 2017).
QUOTE SHEET
"We remain committed to transparency across our global supply
chain," said Lisa Drake, vice
president, global purchasing and powertrain operations, Ford Motor
Company. "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."
"As a leading global battery material provider, we are proud to
have an OECD Due Diligence Program and active community support
initiatives in place linked to our operations in the DRC. This is
central to our proactive approach to delivering ethical cobalt. We
also want to have strong, reliable information channels to prove
and demonstrate this action to our customers. This blockchain
pilot is an interesting and potentially important next step in
these efforts. We believe in transparency and a collaborative
approach to improving production conditions in the DRC cobalt
sector, leveraging the project to this end has huge
potential," said Chen Hongliang, CEO of Huayou Cobalt.
"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 responsibility in the
mining supply chain," said Manish
Chawla, GM, Global Industrial Products Industry, IBM. "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 minerals going into our consumer
goods."
"As a leading global battery supplier, LG Chem will be
participating in this pilot to support our sustainable growth
systems and corporate social responsibility efforts to enhance not
only our product quality and performance, but also to improve
processes for the procurement of raw material," said Jong-Hyun Kim, LG Chem Energy Solution
President.
"As the validator of the network, we will bring our vast
experience working on responsible sourcing at all stages of the
supply chain at all times. Our collective effort allows
participating companies to progress from human-led risk management
to technology-led impact generation in a highly efficient and
cost-effective manner. Augmenting crucial human expertise and
experience, this is a demonstration of technology for good,
empowering vulnerable communities and protecting the environment.
We are proud to be a member of the network," said Dr. Nicholas Garret, Group CEO at RCS Global.
Contact:
Hannah
Slocum
IBM Communications
hslocum@us.ibm.com
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SOURCE IBM