The global appetite for cobalt—a critical mineral used in lithium-ion batteries powering everything from smartphones to electric vehicles (EVs)—is surging. With a single EV battery containing 18 to 20 pounds of cobalt, demand is projected to grow exponentially as automakers shift toward electrification. Yet, behind this booming market lies a deeply fragmented and inefficient mining supply chain, plagued by outdated practices, lack of transparency, and ethical concerns.
At the heart of these inefficiencies are paper-based systems, manual verification processes, and opaque trade networks that slow down operations, increase costs, and open the door to fraud and unsafe labor practices. To address these systemic challenges, IBM has launched two innovative blockchain-powered initiatives designed to transform how minerals like cobalt are tracked, traded, and regulated across the global supply chain.
Enhancing Transparency with Blockchain Traceability
One of the most pressing issues in mineral sourcing is traceability. Although the Democratic Republic of the Congo (DRC) supplies over 70% of the world’s cobalt, the journey from mine to manufacturer involves multiple intermediaries across various countries. This complexity makes it nearly impossible to verify the origin of raw materials using traditional methods.
To combat this, IBM has partnered with Ford Motor Company, LG Chem, and other key stakeholders to launch a blockchain network focused on mineral traceability and provenance verification. By recording every transaction and movement of cobalt on an immutable digital ledger, the consortium ensures that each batch can be traced back to its source. This not only strengthens compliance with international standards such as the OECD Due Diligence Guidance but also promotes responsible mining practices.
👉 Discover how digital ledgers are revolutionizing supply chain transparency.
Streamlining Operations with MineHub Technologies
Beyond traceability, operational inefficiencies continue to burden the mining industry. From customs documentation to trade financing, countless steps rely on physical paperwork and human intervention—processes that are not only time-consuming but vulnerable to errors and manipulation.
Enter MineHub Technologies, a digital platform co-developed with IBM that leverages blockchain to automate workflows across the mining supply chain. The platform digitizes contracts, shipping records, and quality certifications, enabling seamless data exchange between miners, shippers, smelters, banks, and buyers.
A live use case currently in development tracks ore from GoldCorp’s Penasquito Mine in Mexico all the way to end-market buyers. By replacing legacy systems with smart contracts and decentralized data sharing, MineHub reduces processing times, cuts administrative costs, and minimizes fraud risks.
This level of integration fosters greater supply chain collaboration, allowing stakeholders to respond faster to market demands while maintaining audit-ready compliance records at every stage.
Tackling Manual Trading Practices
Despite advances in other sectors, commodity trading in mining remains surprisingly archaic. Buyers often initiate deals via phone calls, followed by manual checks for contract validity and inventory availability. These processes lack automation and depend heavily on intermediaries—slowing down transactions and increasing counterparty risk.
Blockchain introduces smart contracts—self-executing agreements coded with predefined conditions—that automatically trigger actions like payment release or shipment confirmation when milestones are met. This eliminates reliance on middlemen, accelerates trade cycles, and enhances trust among participants.
As Manish Chawla, General Manager of Global Industrial Products at IBM, notes: “Automating these manual processes removes friction and allows companies to sell more minerals faster—creating value across the entire ecosystem.”
Overcoming Regulatory Challenges
Enforcing international regulations like the OECD Due Diligence Guidance is notoriously difficult due to material mixing during downstream processing. Once ores from different sources are blended, verifying ethical origins becomes nearly impossible.
Blockchain offers a solution by creating a tamper-proof digital record that travels with the material. Certifications, audit reports, and sustainability claims can be uploaded directly onto the network, visible to authorized parties throughout the chain. Rather than relying on segregated supply lines—a costly and logistically complex approach—companies can now maintain full visibility without physical separation.
This capability builds trust among regulators, consumers, and investors increasingly demanding ethical sourcing and sustainable practices in high-tech manufacturing.
Why Start with Cobalt?
Cobalt serves as an ideal starting point for blockchain pilots due to its concentrated geographic origin and well-documented human rights concerns in artisanal mining communities within the DRC. The rapid rise in EV production has intensified pressure on these regions, often leading to exploitative labor practices and environmental degradation.
By focusing on cobalt first, IBM aims to create a scalable model that can later be applied to other conflict minerals such as tin, tantalum, and tungsten—materials essential for electronics but similarly vulnerable to unethical sourcing.
👉 See how emerging technologies are reshaping resource accountability.
Inclusive Onboarding for All Miners
For any blockchain network to succeed, participation must extend beyond large corporations. Artisanal and small-scale miners represent a significant portion of global mineral output but often lack access to digital tools or formal infrastructure.
Drawing from lessons learned through TradeLens (a shipping blockchain) and IBM Food Trust (a food safety network), IBM is designing user-friendly onboarding solutions—including mobile apps and API integrations—that allow even low-tech miners to contribute data securely. This inclusivity ensures end-to-end transparency without leaving vulnerable producers behind.
Lessons from Other Industries
The challenges faced in mining mirror those in agriculture and logistics: fragmented supply chains, mixed batches, and diverse producer sizes. IBM’s experience building enterprise-grade blockchain networks has taught valuable lessons about scalability, interoperability, and trust-building.
Chief among them is the need for open industry standards that encourage widespread adoption. A closed or proprietary system will fail to achieve critical mass; instead, success depends on collaborative platforms where competitors can share verified data without compromising confidentiality.
Frequently Asked Questions (FAQ)
Q: What is blockchain's role in mineral traceability?
A: Blockchain creates an immutable, transparent record of each mineral’s journey—from extraction to final product—ensuring authenticity and compliance with ethical sourcing standards.
Q: Can blockchain eliminate fraud in mining transactions?
A: While no system is foolproof, blockchain significantly reduces fraud risk by eliminating duplicate records, preventing unauthorized changes, and automating verifications through smart contracts.
Q: How does blockchain help small-scale miners?
A: Through mobile-based data entry and simplified interfaces, blockchain platforms enable artisanal miners to participate in global markets with verified credentials, improving their access to fair pricing and financing.
Q: Is this technology only useful for cobalt?
A: No. While cobalt is the initial focus due to its strategic importance and ethical concerns, the same framework can be extended to other critical minerals used in batteries and electronics.
Q: Who verifies the data entered into the blockchain?
A: Data is submitted by trusted participants (e.g., mines, auditors, labs) and cryptographically secured. Consensus mechanisms ensure accuracy before records are added to the chain.
Q: How does blockchain improve trade finance?
A: By providing real-time visibility into shipments and contract fulfillment, blockchain enables faster approvals for letters of credit and reduces lending risk—unlocking capital for miners and traders alike.
👉 Explore how decentralized systems are redefining trust in global trade.
Final Thoughts
Blockchain technology is no longer just a buzzword—it's a practical tool for solving real-world problems in one of the world’s oldest industries. From enhancing transparency and reducing fraud to empowering small miners and accelerating trade, its potential to modernize mining is profound.
As demand for critical minerals continues to climb, so too does the urgency for responsible, efficient supply chains. With industry leaders like IBM paving the way, blockchain stands ready to bring long-overdue innovation to the mines that power our digital future.
Core Keywords: blockchain in mining, mineral traceability, supply chain transparency, ethical sourcing, smart contracts, cobalt supply chain, responsible mining, mining industry innovation