Brussels/London/Singapore — Demand for clean, responsibly-sourced metal for use in electric vehicle batteries and smartphones has spawned a new market for technology companies: offering blockchain services to traders to track metals’ provenance, particularly for cobalt.
One data management company, DLT Labs, says it hopes to see as much as 10% of the market for cobalt shift to use of blockchain within 24 months, in processes that could involve sealed bagging, electronic tagging, weighing, recording and GPS tracking of batches of cobalt at all transactional stages.
International pressure is there because currently around two-thirds of the world’s cobalt supplies come from the Democratic Republic of Congo, where non-governmental organizations such as Amnesty International have reported that mining conditions are poor and some small-scale mines use child labor.
Efforts to mine cobalt elsewhere may be hampered by high arsenic levels in some deposits: indeed analysts forecast output from the DRC, where mineral quality seems assured, could rise to around 75% of global production by 2021 as producers, including Glencore, ramp up new production.
The metals sector is taking the issue seriously, given the expected high demand for electric vehicle batteries from customers concerned about being perceived as both sustainable and ethical.
Cobalt is still a key component in such batteries, although battery developers are working on ways to reduce how much is needed and eventually to avoid it entirely.
Cobalt prices have leapt in part due to growing concerns around its origin: prices for the minor metal jumped 129% on the London Metal Exchange last year, and have pushed even higher in the first half of this year before sinking back.
The LME’s response to the growing concern has been to introduce new guidance from early 2019 to ensure only responsibly sourced metals can be traded on its platform. This will include implementing new rules to ensure that all of its listed brands comply with a selected standard and certification regime where appropriate.