Tech giant IBM has announced two projects looking to track supply chains for the metal industry. The projects will make use of Hyperledger Fabric blockchain platform, and will also fight against child labor.
The first project aims to track cobalt mined in the Democratic Republic of Congo. The mined cobalt is transported to a Ford Motor Company plant. The second project meanwhile seeks to similarly track the shipment of metals from a mine in Mexico.
Blockchain to be used in the fight against child labor
The first project will see a 1.5 ton batch of cobalt transported from a mine in DR Congo to a refinery in China. The cobalt will leave Congo to China next month. It will later be transported to a battery plant in Korea before leaving for the US. The cobalt will be used in batteries for electric cars at the Ford plant. The entire journey will go for roughly five months and will be recorded on the blockchain.
The use of blockchain will enable the participants to check and confirm that the material was obtained according to the standards of the Organization for Economic Cooperation and Development (OECD).
IBM also revealed that Chinese cobalt mining company Huayou Cobalt, power elements producer LG Chem and the tech company RCS Global would also take part in this project. Each of these companies will maintain a blockchain developed by IBM and register each step of the cobalt’s journey.
The project will also enable the participants to fight against child labor. DR Congo has become infamous for its use of child labor at cobalt mines in the country, which has attracted the attention of human rights groups across the globe. The blockchain technology will help the companies tackle these human rights issues, according to IBM’s general manager for global industrial products Manish Chawla.
Chawla stated that “Blockchain is the most effective technology to provide real-time access to all the due diligence processes, provide visibility to the supply chain from the miners to the market.”
To ensure that the materials were mined ethically, the project will have to trust humans to input correct data at each stop. The operators of this data work for IBM’s partner, RCS Global. The company has been monitoring the practices in metal mines in Africa over the past few years.
As a result, bags carrying the code tag imply that they were mined with no violation of the law, as Jonathan Ellermann, project director at RCS Global, explained. When an illegal activity is detected, it will be recorded in the system. Then RCS headquarters will be alerted on the issue and in turn inform the exporters that the batch they are about to receive doesn’t meet international standards.
Even though this is quite a strong solution, there is an additional layer of trust involved with blockchain technology. Ellermann pointed out that since the initial monitoring will occur on an industrial, “responsible” mining site, the RCS monitors won’t need to be there at all times. RCS will instead audit information provided by the management of the mine, with the employees tasked with the tagging. The audit reports will be stored off-chain on an IBM server.
At the launch of the blockchain, each participant will maintain its node as a validator. As more companies come on board, they can decide to hire IBM to help support their node, according to Chawla.
With the Hyperledger technology, participants will get to choose which information they share with their partners. They will also choose the information to make available to outside parties like NGOs. Regulators and government bodies will be granted access to the information available on the network as well.
If this project succeeds, IBM is hoping to bring in other supply chain audit companies including automakers and electronics manufacturers.
IBM tracking beyond cobalt
IBM announced earlier today that it has partnered with Canadian tech startup called MineHub Technologies; mining companies Goldcorp, Wheaton Precious Metals and Kutcho Copper, metal trading company Ocean Partners USA, and ING Bank.
MineHub is set to develop a platform on Hyperledger Fabric. The platform will help track the metal concentrate from Goldcorp’s Penasquito Mine in Mexico. The mining company will be able to upload data about the ore it mines on the network. The mining company will upload certification to prove that the material was produced sustainably and ethically, IBM announced.
IBM stated that “Smart contracts for supply chain processes such as trade finance, streaming, and royalty contracts will be used by companies such as Wheaton Precious Metals and other institutions who provide credit facilities such as ING bank.”