Dem. Rep. of Congo: Blockchain technology can help improve cobalt supply chain, say experts

Author: David Clarke, CNBCAfrica, Published on: 13 February 2018

"Blockchain to track Congo’s cobalt from mine to mobile", 2 February 2018

Blockchain is to be used for the first time to try to track cobalt’s journey from artisanal mines in Democratic Republic of Congo through to products used in smartphones and electric cars...Sources close to a pilot scheme expected to be launched this year say the aim is eventually to give manufacturers a way of ensuring the cobalt in lithium-ion batteries for products such as iPhones and Teslas has not been mined by children...Businesses in China...have set up a Responsible Cobalt Initiative, which has been joined by tech giants such as Apple and Samsung, to address child labour...“The demand to make cobalt more sustainable is going to continue growing, meaning there is a will to find a solution and blockchain will be part of that,” said a source with the project

...Blockchain technology is already used in the diamond industry...The cobalt supply chain is far more complex but the developers of the pilot hope blockchain – a decentralised online database in the form of a distributed ledger – can at least track some of the stages that are a major worry for end users. Sheila Warren, head of blockchain policy at the World Economic Forum, said it was an open question how well it could work in Congo given the prevalence of conflict, lawlessness and an opaque legal system...“Amnesty International...said it was looking at blockchain...“You have to be wary of technological solutions to problems that are also political and economic, but blockchain may help. We’re not against it,” said Amnesty researcher Mark Dummett

...Carmakers such as Volkswagen are trying to secure long-term cobalt supplies to sustain electric car production, and they are asking suppliers to ensure no child labour was used in the supply chain... [According to] Harrison Mitchell, director of RCS Global...“Blockchain-enabled supply chains will have the ability to deliver trust and transparency over the production of metals such as cobalt... Ensuring that information from these mine sites is inputted correctly and transparently is difficult, but it is possible.”...Christine Chow of Hermes Investment Management said tracking cobalt was far more complex than diamonds...“But the principle of recording key characteristics and then entering them into the blockchain, which is stored on the cloud, is the same,” said Chow...“To make it work, the key players in the chain must agree a set of input data to define its features,” said Chow...The International Council on Mining and Metals (ICMM) said its members, which include all major mining companies, were well-placed to draw on blockchain’s potential to improve public trust in the industry. “It does not solve the whole problem, but it solves a big part of the problem,” ICMM CEO Tom Butler said. “Quality at entry to where the blockchain starts remains a challenge, but in that respect we’re in a privileged position as ICMM members are mining responsibly.”Glencore...declined to comment on the use of blockchain. In its 2016 sustainability report, Glencore said when it sourced cobalt in Congo from outside its own production, it only dealt with third parties that did not use artisanal mines.

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