The Organization for Economic Co-operation and Development has released a new report emphasizing that improved traceability of critical minerals such as lithium and nickel is essential for enhancing the credibility and integrity of global supply chains. The Paris-based organization, which represents 38 developed and emerging market economies collaborating on global economic policy and international standards, states that tracking mineral origins, asset ownership, and material movement through the chain of custody can help manage governance risks and increase supply chain resilience. The OECD has recommended a three-stage approach to mineral traceability.
Initially, governments should maximize the use of existing tools including supplier mapping, audit programmes, and bilateral mineral agreements to increase transparency. In the medium-term, governments must address data gaps and engage more actively with traders, exchanges, and smelters to advance ownership transparency and enable independent mineral testing and tracking of recycled content. Long-term efforts require international cooperation to share traceability data across borders and align standards for batteries and related products, with support from organizations including the G7, International Energy Agency, and relevant trade partners.
The report highlights that current traceability systems remain fragmented, with many tools developed within individual companies rather than through comprehensive industry-wide frameworks. According to OECD survey findings, traders demonstrate the highest rates of traceability-system implementation, while miners have the lowest adoption rates. Companies implementing these systems face various challenges including costs, operational concerns related to confidentiality, supplier leverage issues, and data quality problems.
Survey respondents identified regulatory consistency and shared data infrastructure between countries, companies, and the public as top priorities. The OECD analysis examined nickel supply chains in Indonesia and the Philippines, as well as lithium sourcing in Argentina and Chile. The research found that Indonesia's and the Philippines' nickel supply chains are notably complex due to elaborate transnational ownership structures.
Existing initiatives such as Indonesia's SIMBARA system, London Metal Exchange responsible-sourcing requirements, and various sustainability programs and local audits could serve as building blocks for enhanced transparency. For lithium in Argentina and Chile, improved ownership transparency can illuminate foreign entities' involvement in upstream operations. The report notes that significant lithium processing from these countries depends on China, a relationship evident through existing trade data and supplier mapping.
Limited data availability remains the primary obstacle to achieving comprehensive traceability in these jurisdictions. While end-to-end traceability is not yet completely achievable, companies are working to increase transparency through supply-chain mapping, audits, and mass-balance approaches. The report acknowledges that traceability can support brand reputation and customer trust, though concrete commercial benefits remain difficult to quantify.
Existing frameworks including the G7 Critical Minerals Action Plan, the Roadmap to Promote Standards-based Markets, FORGE, RESourceEU, and bilateral critical-minerals agreements could provide structures for implementing these recommendations.
Source: northernminer.com