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Over the years, several blockchain projects have been piloted in collaboration with industry-specific giants to disrupt various industries. One such blockchain project is currently piloted to address the concerns in strategic mineral supply chains.
IBM has recently announced the development of the open industry-wide network to trace and validate minerals and other rare earth materials for the consumer electronics, automotive, aerospace, and defense industries.
Ford Motor Company, Huayou Cobalt, IBM, LG Chem, and RCS Global tied hands together to create decentralized industry-wide blockchain network that could be specifically used to trace and validate a wide range of minerals used in various industries. The group is aiming to take off with Cobalt supply chain in which all the major stages of the supply chain from mine to end-user will be included.
The reason behind getting started with Cobalt is its high demand in consumer electronics and the automotive industry which is, according to an analysis of the banking giant Morgan Stanley, expected to multiply eightfold. However, the project is expected to cover other battery metals and raw materials that include Gold, Tin, Tungsten, and Tantalum which are often known as conflict minerals or rare earths.
This blockchain pilot is already underway, observing and exploring the ways of enhancing the various stages of the supply chain by tracking how the materials are mined/produced, traded and processed. The blueprint is simple yet very effective based on a stimulated scenario which is demonstrated below.
“Cobalt produced at Huayou’s industrial mine site in the Democratic Republic of Congo (DRC) will be traced through the supply chain as it travels from mine and smelter to LG Chem’s cathode plant and battery plant in South Korea, and finally into a Ford plant in the United States.”
The data from all three stages of mining, processing, and trading will be stored on the immutable blockchain database where it will be used as evidence of the cobalt production from mine to end manufacturer. The participants on this platform will be validated on the basis of standards developed by the Organization for Economic Cooperation and Development (OECD), unlike traditional industry standards where third-party is used to establish compliance. All the authorized participants will be able to see the immutable data to trace all three stages in real time and to address their compliance.
The blockchain platform will be based on IBM’s blockchain technology and powered by the Linux Foundation’s Hyperledger Fabric and all set to adopt across the industry. While the large-scale miners (LSMs) will certainly benefit from the platform, artisanal and small-scale miners (ASMs) will also experience the transparent and secure ecosystem enabling them to sell their raw materials in the international market. Furthermore, the platform is also aiming to bring the original equipment manufacturers (OEMs) across the consumer electronics, automotive and aerospace closer to their supply chain partners such as mining companies and battery manufacturers.
The open industry-wide platform will soon be opened for supply chain networks across the industries to trace and validate the minerals and materials after the completion of the pilot.