Volkswagen, the German multinational automaker will use a supply chain blockchain solution to ensure responsible sourcing of lead for their batteries. Volkswagen has partnered with Minespider, a blockchain start-up for this.
A lot of the mining activities in the world takes place in conflict zones. Slavery, human rights violations, cartels operating with scant regard for laws are just a few of the conditions prevailing in such countries.
Warlords operating in these countries run mining cartels. When businesses elsewhere buy minerals from these cartels, these warlords make a profit and continue with their unethical ways.
Consumers, businesses, and governments are increasingly waking up to these concerns. They are looking for transparency so that they know where minerals are produced, and how. This will help them to avoid contributing to the profit of these warlords.
Automakers source minerals such as lead for their batteries and a part of these minerals come from these conflict zones. They are increasingly trying to source these minerals responsibly.
How do you do this, though? Naturally, conflict zones have challenges with governance, law-and-order, and transparency. It’s not easy to maintain a transparent trail that shows the life cycle of a mineral resource from mine to the factory of the automaker.
Technology solutions deployed currently don’t quite do the job. However, blockchain, with its decentralization, transparency, and immutable records can help in sourcing minerals responsibly.
This is where the move from Volkswagen assumed importance.
Volkswagen/Minespider partnership to make lead supply chain transparent
Volkswagen is piloting a supply chain blockchain solution with Minespider, a blockchain start-up based out of Berlin, Germany. Minespider has a blockchain protocol to facilitate responsible mineral sourcing.
Volkswagen and Minespider are including suppliers that provide two-thirds of the lead the automaker procures. The pilot project will track the entire life cycle of the lead, i.e., from mine to the factory.
The details of this life cycle will be stored on the open-source blockchain platform of Minespider, which will ensure transparency. Tampering of records will not be possible, as a result of security features employed in blockchain networks.
Supply chain blockchain solutions assume importance
Supply chain assurance is a key blockchain use case in other industries too. For e.g., VeChain, a blockchain start-up has established key partnerships in this landscape. With the interest shown by giant automakers like Volkswagen and BMW, blockchain could make a key difference in this space.