Companies have started using blockchain technology to track the supply chain minerals to ensure those from conflit-hit Democratic Republic of Congo are blocked.
Dorae Inc, a global supply chain accountability firm, has deployed the technology to track cobalt, coltan and diamonds mined in DRC, while IMPACT of Canada has teamed up with technology firm Consensas to track gold from small mines.
This will also benefit the DRC, as royalties paid to the government rose from 2 per cent to 10 per cent when DRC President Joseph Kabila on March 9, signed new mining code into law.
Dorae said it obtained approval from President Kabila to deploy technology to store data about minerals from origin to end-user. When ore is first sold, the information on place of origin, extraction method, inspection details and quality is logged in system.
Each time materials change in transit and processing, details of transaction are logged to create a permanent record from origin to final use.
"Each time a unit of material changes hands from point of extraction to finished product, a key data set will be hashed onto an immutable blockchain," said Dorae founder Aba Schubert.
"Companies face increasing pressure from governments, media and consumers to know where minerals come, address risks such as corruption and human rights abuses," said IMPACT executive director Joanne Lebert.
Cobalt, coltan and diamonds illegally mined are associated with human-rights abuse or financing of conflict in eastern DRC. Smuggling networks comprise Congolese citizens and foreigners.
Vast mineral deposits in eastern DRC are a catalyst to conflict with numerous militias and warlords vying to control resources creating cycle of bloodshed. The proceeds from minerals are used to buy guns and bullets.
DRC's strong industrial mining sector gave way in 1990s to widespread artisanal and small-scale mining (ASM) activities as a consequence of prolonged conflict, profound economic mismanagement and corruption.
The informal and largely unregulated nature of ASM poses myriad social risks including forced labour, sexual violence and child labour.