Volkswagen Joins IBM-Backed Blockchain Platform for Cobalt Supply Chains

Going green? With global pressure to reduce CO2 emissions and government initiatives to incentivize corporations to find energy alternatives, the demand for electrical cars, powered by lithium-cobalt batteries will create a significant demand for raw materials to make these batteries.

Cobalt Institute says that about 50% of globally produced cobalt is used in rechargeable batteries. It is considered “a vital technology for a sustainable future”. The demand for electric cars to reduce CO2 emissions will continue to climb.

How is cobalt being used in batteries? Cobalt can be found in rechargeable batteries used in portable devises such as cell phones, laptops, tablets, and for battery powered power hand tools. It is also used in stationary electrical power sources such a renewable energy power stations and home storage, as well as in ancillary services to the electrical grid.

cobalt
Image Source: mijo-mining.com
Just south of the Democratic Republic of the Congo, In the Republic of Zambia raw Cobalt is available for purchase online.

A significant green application includes transportation. These include electric, and hybrid electric vehicles, electric trains, and an ever increasing presence of electric bikes and scooters now popping up in nearly every metropolitan city in the US. With this background in mind, one can clearly see the pressure for manufacturers to find inexpensive sources of cobalt. However, mining of cobalt has generated a good deal of controversy in recent years over its mining methods.

The Democratic Republic of Congo (DRC) is at the center of this controversy, and it is the global primary source for cobalt.

The DRC produced 90,000 MT of cobalt in 2018, or 60% of global production. The next largest producing country is Russia—which produced 4,900 MT. Compare the DRC with the total cobalt production of the top 10 producing countries in the same period, including Russia, was only 35,000 MT.

Exploitation of Children

When it comes to mining from the DRC, the pressure for high volume of cobalt production has produced undesirable consequences. James Conca, Forbes, discussed the research of Vivienne Walt and Sebastian Meyer, who reported on the conditions of cobalt mining in the Democratic Republic of Congo. The study focused on the lives of poor families whose children are exploited in the mines. The children are expected to work long 12 hour days, for less than $9 per day. Their work involves hacking at the ore by hand. After which the child then has to carry a load on their backs to a trading post. Often an hour’s walk from the mine.

According to Walt, tech giants “like Tesla, Apple, GM, Samsung and BMW consciously ignored the problems,” as consumers didn’t show an interest or seemed to care. They only cared that they could continue to get their rechargeable batteries. In 2016, Amnesty International issued a scathing report that identified over 24 electronic and automotive companies that had “failed to ensure their cobalt supply chains didn’t include child labor,” added Conca in his Forbes report.

However, that may be changing. With the conscientiousness of the DRC conditions, and guidelines developed by the Organization for Economic Co-operation and Development (OECD), manufactures and suppliers are being forced to ensure their supplies are not tainted with cobalt supplied by exploited child labor.

Blockchain Technology

In April, Cointelegraph reported that Volkswagen joined an open industry collaboration to ensure that cobalt used in lithium-ion batteries for its electric vehicles is responsibly sourced. The collaboration will use blockchain technology so they can increase efficiency, sustainability and transparency in the cobalt supply chains. Volkswagen Group believes that joining the collaboration will enable Volkswagen to gain greater insight into the source of cobalt used so they can accurately report their cobalt source doesn’t use exploited labor.

 IBM News Room says that the goal of the collaboration is to “create an open, industry wide network to trace and validate minerals and other materials for the automotive and consumer electronics industry.” The new platform, seeks to ensure that corporations will be able to “trace and record the flow of minerals across the supply chain in near real-time,” the company announced.

“Traditionally, miners, smelters and consumer brands had to rely on third-party audits and laborious manual processes to establish compliance with generally accepted industry standards.” —Volkswagen

 

Conclusion

With the concerns for ensuring a company doesn’t find itself using questionable resources, it is hoped more companies will participate in this collaborative group. The aerospace, and consumer electronics are industries that could benefit from the benefits of blockchain technology to trace the source of its supplies in its supply chain.

 

Eric W. is a self-educated ghost writer who for the past seven years has been involved in Blockchain, Cryptocurrency, and Digital advertising sectors as Project Director, Miner, and NRA (Network Resource Application).

Contact Eric

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