Sky News in the UK published an investigation of cobalt mining titled “Meet Dorsen, 8, who mines cobalt to make your smartphone work.” One of the cobalt smelters exposed in the Sky News piece, Huayou Cobalt, was told by Apple to stop sourcing cobalt from “artisanal” mines, but Huayou refused.
Now, Huayou Cobalt is listed as one of the four major participants in the new ethical mineral sourcing joint venture, which is focused on cobalt from the DRC.
The idea is that blockchain technology will create a cryptographically secured record tied to cobalt lots, all the way from the site of production to the individual Ford lithium-ion battery in a particular electric vehicle. In theory, greater transparency in the cobalt supply chain will reassure buyers of the metal and help commodities markets define the supply that can be ethically sourced.
The pilot project in the DRC has been underway since December, but was only officially announced on Wednesday, Jan 16; it’s expected to be completed in midyear.
Each of the participants in the pilot represents a different stage in the cobalt supply chain: Huayou has the industrial mining site in the DRC; LG Chem runs the smelters and battery plants in South Korea; and Ford, of course, installs the batteries into electric vehicles in North America. The process of tracking cobalt, which is refined and smelted and combined in alloys with other metals, is fairly difficult, and the track-and-trace aspect of the program involves placing quantities of the mineral in secure bags.
In our view, this IBM-driven blockchain pilot is another supply chain visibility project similar to the leafy green collaboration with Walmart. Both supply chains had major problems—abusive child labor with cobalt, frequent E. coli contamination in leafy greens—and both visibility projects are driven by changing consumer expectations around ethics and health, respectively.
Like the Walmart project, we wonder how much this pilot will push the needle forward on blockchain technology (especially if the blockchain exists on IBM’s centralized HyperLedger cloud), but regardless it is encouraging to see major players experiment to see where in the commercial supply chain the expense and difficulty of implementing blockchain is justified by consumer demand.
By John Paul Hampstead, FreightWaves Staff Writer
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