Technology Digs Deep to Enable More Responsible Sourcing

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On the face of it, the contrast between metals and minerals dug out of the ground and high-tech gadgets like smartphones and tablets is a stark one. For starters, the former were created millions of years ago, whereas the latter have been in existence for little more than a decade. And the sight of dirt-coated miners emerging from deep underground carrying pickaxes and shovels seems a long way away from neat rows of white-clothed assembly line workers.

However, the devices we now rely on to run our lives and keep us entertained wouldn’t exist without the vast quantities of tin, copper, cobalt and other raw materials extracted from below the earth’s surface. They are the essential ingredients in electronic components such as microprocessors, circuit boards and batteries.

Tracing the flow of these raw materials from mine to manufacturing plant has been on the agenda for multinational companies ever since the US Dodd-Frank Act’s provision on conflict minerals reporting came into force in 2012. The legislation was designed to ensure that they were not helping to fund armed groups in the Democratic Republic of Congo (DRC) by purchasing tin, tantalum, tungsten or gold from mines under their control.

Over the past five years, the need for greater transparency and responsible sourcing practices has broadened to encompass human rights issues such as child or forced labor ( so-called “modern slavery”), including in some of the poorest countries in the world.

SCM World research last year among more than 1,200 supply chain professionals found that 82% said their companies would invest in ethical sourcing initiatives, and 85% in trying to ensure fair labor practices, during 2018.

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Artisanal Accountability

Certifying that the mines from which metals and minerals are extracted are not funding armed conflict or exploiting vulnerable workers has proved to be a complex and costly exercise. It is particularly challenging when the supply chain spans thousands of small, artisanal mines multiple tiers deep and far removed from the brand owners whose public reputations are ultimately on the line.

In a neat reversal, the solution to this traceability and assurance challenge increasingly looks like being a technological one. Last month De Beers announced a pilot project based around a new app that small-scale diamond miners in Sierra Leone can use to certify that their stones are legally sourced.

Called GemFair, the scheme will enable registered mines to weigh their diamonds, securely bag them and then provide traceability as they move downstream via a GPS-enabled tablet. Around a fifth of gem-quality diamonds are sourced from artisanal mines, where working conditions are often hazardous, according to the NGO that De Beers is running the pilot with.

If it proves successful, De Beers expects to begin purchasing diamonds from these mines later in the year. The next step would be to integrate the program into the blockchain platform the company is developing for the diamond industry.

It’s a similar story with cobalt in the DRC. Prices for the material, a key ingredient in lithium-ion batteries, have skyrocketed during the past 12 months as major automotive firms and Chinese processors seek to lock down supplies ahead of the predicted surge of electric vehicle sales over the next few years.

Around 60% of the world’s cobalt supply originates in the DRC, and of that around 20% comes from the artisanal sector. Exploding demand means it will be hard for brand owners to avoid smaller producers where the reputational risks are greater, explains Harrison Mitchell, a director of RCS Global, a responsible sourcing audit and advisory firm.

In April, RCS Global started the Better Cobalt pilot in the country’s Katanga province. Focused on five artisanal and semi-mechanized mines, it operates on a similar basis to De Beers’ trial, with an electronic tagging system providing data visibility via a web-based dashboard for several consumer goods and car manufacturers. Again, the intention is to use blockchain technology in the next phase of the program.

A New Daisy Chain

Apple, which has been a leader in driving greater traceability of conflict minerals and cobalt, is now also using technology to expand their recycling. It recently unveiled its latest robot, Daisy, which can disassemble 200 iPhones an hour and separate components such as logic boards, speakers and vibration modules. This, in turn, enables the metals within them to be made available for reuse in new devices or fed back into the secondary market.

Such innovations represent the creative application of the latest technologies to difficult, and in some cases pre-industrial, scenarios. While they can’t actually eliminate human rights abuses, they do offer new possibilities for companies that are serious about addressing the risks buried deep in their extended supply chains.

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Author Geraint John

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