Ford to use IBM blockchain technology to ‘trace and validate ethically sourced minerals’

Ford, IBM, Huayou Cobalt, RCS Global, and LG Chem have agreed to start using blockchain technology to ensure sourced minerals are valid and ethical

IBM has announced that Ford Motor Company will start using blockchain technology to ensure the “responsible sourcing of industrially-mined cobalt.”

The press release reads: “Ford Motor Company, Huayou Cobalt, IBM, LG Chem, and RCS Global announced plans to use blockchain technology to trace and validate ethically sourced minerals.”

For context, Ford is one of the world’s biggest car manufacturers, Huayou Cobalt is a supplier of cobalt, LG Chem is the largest Korean chemical company, RCS Global focus on collecting data about mineral sourcing, and International Business Machines (IBM) is an American multinational information technology company.

The consortium includes participants at every major stage in the supply chain. They will begin with a pilot test of the operation, starting with a focus on cobalt whilst exploring the creation of an “open, industry wide blockchain platform that would ultimately be used to trace and validate a range of minerals used in consumer products.”

Cobalt is in high demand as it is used in lithium-ion batteries. This type of battery is used to power a plethora of products such as laptops, vehicles, mobiles, pacemakers, digital cameras, watches, and so on. A report from Morgan Stanley estimates that by 2026, the demand for lithium-ion batteries will have increased by 800%.

The blockchain pilot is already underway and should help demonstrate how materials in the supply chain are “responsibly produced, traded, and processed.”

The pilot is based on a simulated sourcing scenario. Cobalt produced at Huayou’s industrial site in the Democratic Republic of Congo will be traced during transportation to LG Chem’s cathode and battery plant in South Korea. Once there, the cobalt will then be taken to a Ford plant in the United States.

At each juncture, participants will check that the materials have been sourced in compliance with the standards of the Organisation for Economic Cooperation and Development (OECD).

Traditionally, miners, smelters, and consumer brands rely heavily on third-party audits to ensure compliance with industry standards. However, by utilising blockchain technology, there will be an “immutable trail” created that incorporates corresponding data to provide “evidence of the cobalt production from mine to end manufacturer.”

The pilot has been built on the IBM blockchain platform and is powered by Hyperledger Fabric. It has been designed so that it can be adopted across the industry. Upon successful completion, supply chain networks will be encouraged to join the network. It is expected that work will be expanded beyond cobalt into other battery metals and raw materials.

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