German car manufacturer, BMW, is looking to using a blockchain based solution for ensuring and proving that only ethically acquired cobalt is used in its electric vehicles' batteries. The company is working with a London based company, Circulor, that aims to use blockchain technology to transform supply chains.
The announcement comes at a time when Apple has just recently announced that it will be negotiating directly with miners to secure long term supplies of cobalt in the wake of electric vehicles going mainstream. Circulor, founded in 2017 by Johnson-Poensgen, wants to make electric vehicle manufacturing more ethical for manufacturers like BMW.
“We believe it makes economic sense to start with sources that aren’t a problem,” said Douglas Johnson-Poensgen, CEO at Circulor, in an interview.
The Democratic Republic of Congo is the world's largest supplier of cobalt as it is estimated to hold approximately 60% of the world's total cobalt reserves. Also recently, although it is still a long way to go until the project can bring any cobalt to market, traces of cobalt have been found in Namibia by mining exploration company, Namibia Rare Earths Inc.
Already, the startup is working on a trial they will be using with BMW documenting cobalt that is already proven to be clean as it was found in the DRC, Australia, or Canada. The startup says that the trial of their blockchain supply chain solution allows supplying of a barcode to what is known as clean cobalt", ie. cobalt that has been ethically sourced, and adds the key destinations of its trip to a ledger on their blockchain solution. Apart from proving the source of the cobalt and providing a record for it, the solution will likely also bring down regulatory compliance costs.
“Once the system is proven and operating at scale, one can tackle the harder use cases like artisanal mines,” said Johnson-Poensgen.