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BMW is collaborating with a blockchain startup to apply the technology for tracking the cobalt used in its batteries, Reuters reports. The German car manufacturer will rely on blockchain to ensure its cobalt is ethically sourced. BMW will be assisted by London-based Circulor on this project.

Most electric vehicles have cobalt in their batteries. The problem is that more than 65% of the global supply comes from the Democratic Republic of Congo, where 20% of the metal is extracted in unregulated mines. Since Circulor specializes in supply chain management, it will help BMW ensure that its electric cars do not use cobalt from unregulated mines, where child labor and other illegalities might be present.

According to Circulor, the parties are currently engaged in a pilot test where the car manufacturer tracks the cobalt that is already supposed to be clean since it originates from Canada, Australia, or Congo’s industrial output. However, a BMW spokesperson said the company was not at liberty to comment at present.

Douglas Johnson-Poensgen, CEO of Circulor, said in an interview with Reuters:

“We believe it makes economic sense to start with sources that aren’t a problem. Once the system is proven and operating at scale, one can tackle the harder use cases like artisanal mines.”

According to Johnson-Poensgen, the current experiment demonstrates that blockchain does a great job at tracking cobalt as the shipment gets a barcode at the beginning of its journey.

He added that the new system could help reduce regulatory compliance spending although this hasn’t been proved yet.

Johnson-Poensgen has some first-hand experience in African regions dependent on mining as he was involved in bomb disposal in Sierra Leone. Prior to founding Circulor, he worked for Barclays Bank and BT.

We reported on Monday that Daimler, the company behind BMW’s longtime rival Mercedes-Benz, has launched a pilot to assess its MobiCOIN  - a crypto coin drivers will get as a reward for driving responsibly.