IBM, LG Chem, Ford, Huayou Cobalt, and RCS Global join hands.
Building an open network for mineral resource tracking and certification
Focus on tracking cobalt, a key battery material

IBM announced on the 17th that it is building a network to track and authenticate ethically sourced mineral resources using a blockchain platform, in collaboration with LG Chem, Ford Motor Company, Huayou Cobalt, and RCS Global. The initiative aims to enhance transparency in the global mineral supply chain and promote environmental protection and human rights.

This pilot project will involve companies representing key stages of the mineral supply chain, from mines to end users. Ultimately, the goal is to establish an open blockchain platform that will track and authenticate a wide range of minerals used across the consumer goods industry. In particular, the project focuses on tracking cobalt, a key raw material for lithium-ion batteries used in laptops, mobile devices, and electric vehicles, for which demand is rapidly increasing.
This blockchain project is already working to validate the processes involved in the production, trading, and processing of mineral resources within the supply chain. This pilot project, based on a simulated mineral resource movement scenario, traces the supply chain from cobalt produced at Huayou's cobalt mine in the Democratic Republic of the Congo through LG Chem's cathode and battery production plants in South Korea to Ford's plant in the United States. During this process, tracking data containing key information about the cobalt production process from mine to final manufacturer is recorded on the blockchain.

Furthermore, companies participating in this network will be certified based on the Principles for Responsible Mineral Sourcing established by the Organisation for Economic Co-operation and Development (OECD). Until now, miners, refiners, and consumer brands have relied on external audits to verify compliance with industry standards. However, blockchain technology creates a network of certified companies based on this verification, while allowing all network participants with access rights to view immutable data in real time. Furthermore, blockchain can also support network participants in meeting their own compliance requirements.

While the initial focus of the network will be on large-scale mines, the ultimate goal of the blockchain network is to enhance transparency for traditional small-scale mines and enable them to sell their commodities on the global market while complying with internationally recognized accountability standards. To achieve this, the network is working with small-scale miners and corporate due diligence data providers, ultimately encouraging them to join the blockchain network. The project will also explore ways to provide incentives and financial benefits to small-scale miners and other communities impacted by mining.

The Linux Foundation's Hyperledger Fabric project, built on the IBM Blockchain Platform, aims to facilitate blockchain adoption across industries. This solution targets the automotive, electronics, aerospace, and defense industries, ensuring easy access to supply chains for all stakeholders, including OEMs and partners like mining companies and battery manufacturers, regardless of size or role. Upon successful completion of this project, companies across the supply chain within the industry will be encouraged to join the open network to trace and certify mineral resources.

Furthermore, the scope of the targeted minerals is expected to expand beyond cobalt to include other battery raw materials and raw materials, such as tantalum, tin, tungsten, gold, and rare earth elements, commonly referred to as conflict minerals. Furthermore, the platform will focus on diverse industries, including automotive, aerospace, defense, and consumer electronics. Furthermore, the platform plans to expand its functionality and establish governance with the participation of industry representatives.

LG Chem Battery Business Division President Kim Jong-hyun said, “As the world’s leading battery company, we will establish a sustainable growth system by fulfilling our social responsibility from the procurement of raw materials to the performance and quality of our products.”

“With demand for cobalt growing, we want to demonstrate how blockchain can be used to drive greater social responsibility in the mineral supply chain,” said Manish Khawla, IBM Global Head of Industrial Products. “This initiative will serve as a precedent for increasing transparency across the entire supply chain of minerals used in consumer electronics.”

Meanwhile, this pilot project is scheduled to run until mid-2019.