Editor’s Note
This article examines the human toll of cobalt extraction, a critical component in modern batteries. While large-scale mining provides most of the world’s supply, a significant portion comes from dangerous, small-scale operations in the DRC, highlighting a critical ethical challenge for the global tech and energy sectors.
Mining for cobalt, an essential raw material for lithium-ion batteries, carries a high cost in human suffering. More than 60 percent of the world’s supply comes from the Democratic Republic of Congo (DRC), with about 45 percent coming from large-scale mining operations. The remaining 15 percent comes from small-scale mines in the DRC, where children and adults labor under harsh and dangerous conditions to extract ore by hand.
It’s those working conditions, along with environmental damage to areas mined, that have focused the world’s eyes on the high-profile automotive and electronics industries. Their products — electric vehicles (EVs), smartphones and laptops — depend on lithium-ion batteries, and thus, cobalt.
Companies that take sustainability and social justice seriously work to keep cobalt mined by hand out of their supply chains. Similar concerns hold true for other minerals that pose responsible sourcing risks, including lithium, nickel, copper and the “3TG” group (tin, tantalum, tungsten and gold), and for materials that create a hazard for the environment when disposed of incorrectly.
The drivers for responsible sourcing of raw materials are strong, ranging from corporate governance to consumer, shareholder and other stakeholder demands to scrutiny from governments, regulatory bodies, financial markets and NGOs. However, until recently, proving responsible sourcing to all these interested parties was an elusive goal, posing significant reputational, legal and commercial risks.
Today, the Responsible Sourcing Blockchain Network (RSBN), built on IBM Blockchain Platform and assured by RCS Global Group, is providing the transparency, trust and security that are needed to demonstrate responsible sourcing for cobalt. What’s more, the underlying infrastructure that we’ve built for RSBN can be used to jump-start any sustainable sourcing initiative.
The proven benefits of using blockchain technology for sustainable sourcing networks include:
- An immutable audit trail that documents proof of initial ethical production of a raw material and its maintenance at every transfer step from mine to end manufacturer
- Secure, tamper-evident storage of provenance information and certificates of responsible production
- The ability to share a proof of fact while protecting confidential or competitive information
- Decentralized control so no single entity can corrupt the process, promoting trust
- Lower costs through digitization of a paper process, potential reduction in audits and lower transaction costs
- Scalability to accommodate new participants and new industries
Traditionally, miners, smelters, distributers and manufacturers rely on third-party audits to establish compliance with generally accepted industry standards. For RSBN, RCS Global Group provides this assurance through its mineral supply chain mapping and auditing practice, assessing network participants against standards and best practices set by the Organization for Economic Cooperation and Development (OECD) and the Responsible Minerals Initiative (RMI).
RSBN uses blockchain’s shared, distributed ledger to track production from mine to battery to end product, capturing information on the degree of responsible sourcing at each tier of the supply chain. Downstream companies can access the verified proof that they support and contribute to responsible sourcing practices, which they can then share with auditors, corporate governance bodies and even consumers.
At every step, participants control who is allowed to see what information. Once added to the ledger, certifications and other documents cannot be manipulated, changed or deleted. These properties make blockchain a trusted platform for sharing data across different companies while helping prevent fraud.
Networks such as RSBN encourage and enable collaboration between suppliers and customers across complex mineral and other conflict-sourced raw material supply chains, with business value accruing to all that participate. For example, here are benefits realized by RSBN participants.
Automotive manufacturers are gearing up to introduce many more electric vehicles (EVs) into the marketplace, creating new demand for li-ion batteries and the cobalt they require. By engaging in responsible sourcing initiatives like RSBN, they can market their products as sustainably produced as well as sustainable on the road. Responsible cobalt sourcing also contributes to corporate citizenship efforts related to fighting poverty, supporting human rights and preventing environmental degradation.
Mines and smelters can differentiate themselves by providing verifiable proof of responsible practices, gaining a competitive advantage and potentially accessing premium markets. They also benefit from streamlined compliance processes and reduced audit burdens.