Today, global mining group BHP announced that it signed a nickel supply agreement with Tesla. Additionally, BHP will collaborate with Tesla to make the battery supply chain more sustainable, with a focus on end-to-end raw material traceability using blockchain.
Based in Australia, BHP is the world’s largest mining firm by market capitalization. It will supply Tesla with nickel from its Nickel West operation, which claims to have a low carbon footprint compared to its competitors.
Nickel is a key metal used to make batteries for electric vehicles. In the near future, Tesla is set to spend more than $1 billion a year on battery raw materials from Australia, given its mining firms’ responsible production practices.
Blockchain is used to provide a permanent, immutable supply chain record of metal and mineral production. This means end consumers can trace and verify sustainable and responsible sourcing practices in mining. A blockchain implementation also allows proofs of responsible sourcing to be shared while protecting confidential or competitive information.
Using blockchain for traceability solutions is not news to the mining industry. October 2019 saw seven leading mining and metals companies, including Glencore and Tata Steel, form a blockchain consortium to ensure responsible sourcing, backed by the World Economic Forum. IBM has also partnered with RCS Global to create the Responsible Sourcing Blockchain Network, joined by Ford, VW, and Volvo, to ensure the sustainability of their supply chains. This year saw a new consortium formed for cobalt traceability by Glencore, China Molybdenum Co (CMOC) and Eurasian Resources Group (ERG).
Apart from the consortiums, leading mining firms, like Rio Tinto, have also launched their own blockchain sustainability solutions. And Circulor is using blockchain for cobalt traceability in batteries in conjunction with auto manufacturers.
BHP is working with blockchain technology more generally. Last year it executed a $14 million trade on the MineHub blockchain platform.