Blockchain Use Case: Audit Trails for Ford, IBM, and LG

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Blockchain gets comfortable in automotive and electronics industry. Ford, IBM, and LG came together to solve the problem of unethical cobalt production – an important ingredient of lithium-ion batteries used in cars and smartphones. Blockchain happened to be the most convenient and effective way to solve this business problem.

The problem with cobalt mining

Most of the cobalt supplies are mined in the Democratic Republic of Congo. With electric vehicles’ and smartphones’ production on the rise, its prices doubled between 2016 and 2018. The greed followed its popularity: the conditions in which the cobalt is mined are reported as inhumane and dangerous to the local environment.

The corporate giants don’t want to be connected with environmental and social risks, and they are looking for a way to leverage new technologies to solve these issues.

How does Blockchain solve this problem?

Transparency is one of the Blockchain fortes. If we put the cobalt in marked, secure bags, we can easily trace them on the way to the plants. The ledger is immutable, and you can be sure, that you won’t be getting supplies from unreliable contractors.

The aim of the project is to create audit trails and help to improve control over the deliveries, and, consequently, promote environmental sustainability and protect human rights.

The companies plan to launch the pilot project starting at Huayou mine in the Democratic Republic of Congo. After the initial test, it will be expanded to the other mines, and perhaps event the other raw materials besides cobalt.

Is Blockchain the best solution for this?

The most important advantages of Blockchain are security, transparency, and the possibility to connect a few untrusted parties to allow safe and reliable transactions between them.

In fact, Blockchain can do it in a relatively cheap and effective way – it is designed for this purpose. The shared ledger that cannot be altered after verification can validate the actors and help a company meet the OECD sourcing standards.

A similar system is already in use for African diamonds sourcing: De Beers already has Tracr, that helps to prevent similar issues.

Of course, the Blockchain technology use might be limited – it cannot solve all the aspects of inhumane mining. It is there not to replace human-led auditing, but to support it and improve its precision and reliability.

Blockchain developers for your project

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