Re|Source, a solution to trace responsibly produced cobalt from mine to electric vehicle (EV), is moving forward with a pilot project in the Democratic Republic of the Congo (DRC) jointly developed with EV giant Tesla.
The program is being tested in real operating conditions at multiple on-site pilots, including the DRC and Europe, Re|Source said, with further pilots in Asia and the US planned to start later this year.
The final pilot across the entire Tesla supply chain is expected to take place in the fourth quarter. The launch of the final industry solution, supported by boutique blockchain technology studio, Kryha, will follow in 2022, it said.
Tesla struck a deal in 2020 with Glencore (LON: GLEN) to buy cobalt from its Congo mines, but it has also been seeking to reduce its reliance on the metal.
DRC holds around 70% of the world’s reserves of cobalt, crucial for the lithium-ion batteries used in the fast-growing EV sector.
Congo’s artisanal miners are the world’s second-largest source of cobalt after the country’s industrial mines. Consultancy CRU expects the DRC to produce more than 100,000 tonnes of cobalt this year, or 71% of the global total, of which 8,000 will come from artisanal sources.
Child labour and a lack of safety measures in artisanal mining are behind many initiatives to formalize the sector.
According to Amnesty International, children as young as seven have been found scavenging for rocks containing cobalt in the DRC. The group also claims to have evidence that the cobalt those miners dig has been entering the supply chains of some of the world’s biggest brands.
Cleaning up the sector’s image
Tesla is not alone. Several market actors are involved in similar initiatives in the DRC. Volkswagen , for one, is working on improving working conditions in the cobalt-rich nation. The metal, a by-product of copper or nickel, is an essential metal in the production of the batteries that power EVs and high-tech devices.
Trading house Trafigura inked earlier this year a supply deal with Entreprise Générale du Cobalt (EGC), a DRC-owned company that began operating in March. It was created a year ago to help control artisanal supplies and boost government revenue through price controls.
China’s biggest cobalt producer, Huayou Cobalt, which supplies to LG Chem as well as Volkswagen, said last year it would stop buying from artisanal miners in the DRC.
Official figures show that more than 200,000 people make their living digging cobalt and copper in Congo’s southeast Katanga region.
Re|Source’s founding members include Glencore, Eurasian Resources Group (ERG) and China Molybdenum (CMOC)
It counts The Responsible Minerals Initiative and The Cobalt Institute as its strategic advisers.
Re|Source is the latest effort to use blockchain to improve the transparency of global supply chains, especially in commodities.
Blockchain, the technology behind cryptocurrency Bitcoin, creates a link between the physical and the digital worlds, offering a secure digital ledger of transactions that can’t be tampered with.
A few companies have explored of the use of blockchain in the mining industry over the past two years. The world’s no. 1 diamond producer by value, De Beers launched its Tracr platform, which allows tracing gemstones throughout the entire value chain — from mine to buyer.
Automaker Ford partnered in 2019 with IBM, South Korean battery maker LG Chem and Huayou to trace cobalt on a simulated sourcing scenario.