This chapter examines the global state of play for implementation of responsible business conduct standards and related uptake of traceability and other transparency measures in mineral supply chains. This includes an overview of RBC initiatives with traceability and transparency features. Through an analysis of survey data and global implementation, the chapter examines key trends in RBC and traceability in mineral supply chains and different implementation models.
Enhancing Resilience Through Traceability
Insights from Lithium and Nickel Supply Chains in Latin America and Southeast Asia
Abstract
This chapter examines responsible business conduct standards in mineral supply chains, as well as the landscape of traceability systems to help address operational and governance risks. It provides an overview of the key frameworks, initiatives, and regulatory developments shaping responsible sourcing expectations, before turning to evidence from the survey on how traceability is being implemented in practice across the private sector. The aim is to showcase current company due diligence practices that already produce relevant information on mineral supply chains. Lithium and nickel specific risks and standards-based and traceability approaches to address these are discussed in chapters 3 and 4, respectively.
As demand accelerates, the rapid expansion of mining and processing activity may increase operational and governance risks. Such risks may be environmental, social or governance-related. If unaddressed, these can propagate through supply chains, disrupting production, trade and overall supply chain resilience, in addition to the potential economic benefits for communities and countries along the value chain. For example, isolated instances of corruption, regulatory non-compliance, labour disputes and community opposition can impose lengthy and costly delays to projects. Major mining projects have been cancelled due to conflict and the loss of social licence to operate, demonstrating how short-term gains from bypassing governance risks can translate into substantial long-term costs, including investment delays, environmental harm and supply disruptions (Financial Times, 2025[1]; Bloomberg News, 2024[2]; OECD, 2023[3]). Such delays can be costly. At the same time, materials from jurisdictions and sites with differing risk profiles are often blended along the value chain, reinforcing the importance of traceability systems to verify, and potentially reward, responsible production practices.
Risks related to BEPS,1 tax avoidance, and other practices that lead to revenue loss occur along the critical mineral’s value chain. They are present from extraction through to the point of delivery, where pricing, valuation and related-party transactions determine the allocation of profits. BEPS occurs when multinationals shift profits to low or no-tax locations where they have little or no economic activity or erode tax bases through deductible payments like interest, services or royalties. BEPS in the mining sector is estimated to cost Sub-Saharan governments between USD 470 million and USD 730 million annually in lost revenue (IMF, 2021[4]).
Weak governance and limited traceability create multiple points along the value chain where revenues may be eroded, undermining the social contract around resource extraction in producing countries. These pressures may lead to frequent fiscal reforms, creating uncertainty for investors and affecting the stability of supply chains. In turn, fiscal governance, traceability systems and exchange-of-information mechanisms play a critical role in reducing information asymmetries, enabling verification of production, mineral quality and transaction conditions. These dynamics are evident in both lithium and nickel supply chains. For both minerals, unaddressed operational and governance risks have contributed to investment delays, legal challenges and divestment by major institutional investors. In some cases, projects with existing permits and government backing have been suspended where operational and governance safeguards were found to be lacking (OECD, 2023[3]). Both minerals are also characterised by vertically integrated value chains and extensive related-party transactions, which means that these risks may arise at several stages, including the reporting of production volumes, determination of mineral quality and grade, mineral pricing of the cross-border sale, logistics and insurance arrangements, intra-group service charges, capital investment and financing structures. Mitigating these risks and improving the verification of strong operational and governance performance through robust traceability mechanisms is therefore a precondition to derisking investment and achieving greater supply chain resilience and diversification.
OECD RBC standards provide a framework to address risks spanning human rights, conflict, labour, corruption, environment and tax. These include the OECD Guidelines for Multinational Enterprises for RBC and related Guidance, such as the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Minerals Guidance) and the Handbook on Environmental Due Diligence in Mineral Supply Chains (OECD, 2016[5]; OECD, 2017[6]; OECD, 2023[7]). Under these government-backed standards, companies are expected to undertake risk-based due diligence to identify, prevent, mitigate and account for how they address actual and potential adverse impacts in their own operations and supply chains. OECD RBC due diligence expectations currently cover 15 mineral supply chains. They have been integrated into regulations in mineral producing (Democratic Republic of the Congo, Rwanda, Tanzania), processing (Türkiye, United Arab Emirates) and importing (United States, European Union) jurisdictions. Market makers and commodity exchanges, such as the London Metal Exchange, have made OECD standards a requirement for doing business for their members.
The OECD Due Diligence Guidance for Responsible Mineral Supply Chains expects companies to set up a system of supply chain controls and transparency. Of these systems, traceability is the most detailed and intensive, but is expected to be used through a risk-based approach. A system of controls and transparency, including traceability where relevant, should in turn be a starting point for companies’ due diligence, ultimately identifying and addressing risks and adverse impacts linked to the supply chain.
The OECD Minerals Guidance also supports the implementation of the Extractive Industries Transparency Initiative (EITI). The EITI is a multi-stakeholder initiative that promotes transparency, accountability and open management in the oil, gas and mining sector; the Voluntary Principles on Security and Human Rights, which seek to manage risks associated with private and public security in the extractive sector; and the 40 Recommendations of the Financial Action Task Force, which are the key set of expectations to combat money laundering, terrorist financing and financing of weapons of mass destruction.
While individual companies retain the responsibility to conduct due diligence, they also use a variety of multistakeholder or industry-led initiatives to demonstrate responsible business conduct in economic activities or promote collaborative efforts to assess and manage risks. If well designed and governed, these initiatives can drive supply chain transparency, help companies manage supply chain risks, pool knowledge, reduce cost and scale effective due diligence. It is important to note that they differ from national or international legislation as they are voluntary in nature (OECD/ITC, 2024[8]).
Figure 1.2 maps selected multi-stakeholder and industry initiatives against their supply chain tier, thematic and mineral coverage, distinguishing between verification initiatives, which assess or audit RBC and due diligence activities, and facilitation initiatives, which support companies’ implementation of such activities. It shows that coverage varies across the three dimensions with some initiatives appearing across multiple supply chain stages and mineral types while others are more narrowly targeted at specific segments or commodities. Initiatives covering upstream stages, particularly mining and smelting, are more numerous than those focused on downstream processing or manufacturing, reflecting the concentration of due diligence requirements, including through legislation, earlier in the supply chain where many of the operational and governance risks are taking place. In terms of mineral coverage, several initiatives are mineral-agnostic, while others are tailored to specific commodities such as lithium, cobalt, or tin, tantalum and tungsten, highlighting the fragmented nature of the current landscape and the gaps that remain for certain minerals and supply chain stages. The thematic scope of some of these initiatives addresses the most severe risks in the OECD Minerals Guidance, while others go beyond to include broader risks such as occupational health and safety, environmental and broader governance risks. Recent work on voluntary sustainability initiatives in the minerals space points to similar conclusions (Chenhui Zhang, 2026[9]; Programme, 2025[10])
Chapters 3 and 4 provide greater detail on private-sector uptake of multi-stakeholder and industry initiatives on RBC along lithium and nickel value chains in Argentina, Chile, Indonesia and the Philippines.
Note: ASI: Aluminium Stewardship Initiative; CM JDDS: CopperMark Joint Due Diligence Standard; ITSCI: International Tin Supply Chain Initiative; RMI: Responsible Minerals Initiative; RMAP: Responsible Mineral Assurance Process; RMI DAP Downstream Assessment Program; LBMA: London Bullion Market Association; RJC Responsible Jewellery Council; CCCMC – RCI: China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters – Responsible Critical Mineral Initiative; IRMA: Initiative for Responsible Mining Assurance; ICMM: International Council on Mining and Metals; TSM: Towards Sustainable Mining Initiative; ILiA: International Lithium Association; SSI: Solar Stewardship Initiative; RIOS: Recycling Industry Operating Standard. Verification and facilitation initiatives are two kinds of joint RBC initiatives, with those conducting verification involved in checking due diligence or other RBC functions, often through assessments or audits, while facilitation initiatives provide tools, guidance, or other joint activities that help facilitate companies’ RBC and due diligence activities (OECD/ITC, 2024[8]).
Multi-stakeholder and industry initiatives on RBC are a key source of information for companies’ due diligence, as also evidenced by the survey conducted as part of this study. Nearly three in four respondents report using information provided through multi-stakeholder and industry initiatives in some way. Among the most common uses, 54% declare reviewing suppliers’ RBC disclosure gathered through initiatives, while 51% use it to strengthen their risk assessments, for example by reviewing geographic and sectoral risk reports or alerts provided by the initiative. When it comes to risk mitigation, nearly one-third of respondents report using industry initiatives to access individual suppliers’ action plans and update lists of suppliers that have been de-listed. One out of five respondents declare not using multi-stakeholder and industry initiatives as a source of information for due diligence.
Beyond participating in multi-stakeholder and industry initiatives on RBC, individual companies may rely on external providers for activities that require specialised expertise. For example, drafting of RBC reports (33%) and supporting environmental calculations and/or disclosure (32%) are among the functions that are reported as being the most frequently outsourced in the survey. On the other hand, many companies rely entirely on internal capacity for due diligence processes. A third of respondents state they do not use external consultants for RBC-related activities.
Beyond collective industry programmes, companies also undertake activities intended to improve engagement and well-being of local stakeholders. In some cases, these may stem from national or sub-national legal frameworks, which establish specific environmental and social obligations for mining companies towards local stakeholders. In others, as part of the consultation and project approval process, companies agree on specific commitments with local communities. These may involve one-off investments or ongoing support in response to specific local needs. Particularly where mining takes place on Indigenous lands in countries where Indigenous Peoples have recognised land rights and/or the country has ratified the principle of Free, Prior and Informed Consent (FPIC), companies may enter into formal agreements with Indigenous communities. These can include benefit-sharing agreements, service provision and employment agreements, or more advanced co-ownership arrangements.
Traceability of a product is the capacity to establish and verify with a sufficient degree of confidence the origin, geographic path, the sequence of entities that held ownership or control and its physical evolution or transformation. Traceability systems can be used for material and product differentiation and to support better operational performance and governance outcomes, though traceability alone is not sufficient to do this (IEA-OECD, 2025[11]). While the vast majority of traceability systems are implemented by the private sector (often in-house), and rely on private infrastructure, other government-led regulatory measures explicitly establish traceability initiatives for minerals based on government infrastructure. Governments may also decide not to develop and run traceability systems themselves, but to incentivise their uptake in the private sector through dedicated regulations.
Traceability may overlap with, but does not equate to, transparency. Transparency means both supply chain visibility and disclosure. A product may be traceable, increasing supply chain visibility, but traceability information regarding that product may not necessarily be disclosed either publicly or down the supply chain. A company may set up an internal traceability system for its own commercial purposes without communicating the information recorded under this system to its customers or to the public – for example, for business confidentiality reasons. Similarly, a company may be highly transparent when passing on traceability information to its business relationships but may choose not to disclose any traceability information to the public. Also, companies’ claims may choose to focus on certain areas of success and not cover the full spectrum of responsible business conduct expectations where progress may be more limited. Individual companies’ practices may be less visible when they are not transparent or are not monitored by multi-stakeholder and industry initiatives.
Where full traceability is technically not feasible or cost-prohibitive, companies and governments can adopt alternative approaches to prioritise oversight and manage supply chain risks. These include chain of custody, upstream mapping and trade analysis to prioritise high-risk supply chains and allocate resources for traceability accordingly. Such systems enable companies and governments to identify where minerals are produced, processed and traded in order to assess the operational and/or governance risks, and potential anomalies that warrant further investigation or action. While these approaches cannot substitute for direct traceability at the transaction level, they can provide a high-level view of supply chain structure and risk exposure, thus supporting further monitoring of risk as well as diversification objectives. The uptake and choice of traceability models is further investigated below.
To increase consistency and interoperability among many individual companies’ traceability systems, certain certification bodies, multi-stakeholder or industry initiatives and international organisations have sought to introduce chain of custody protocols. These provide a framework for documenting material transfers in supply chains and verifying claims regarding mineral origin. These chain of custody standards typically provide the framework for documenting material transfers in supply chains and verifying claims regarding mineral origin. Some chain of custody standards go beyond traceability information by integrating some information on operational risks and corporate governance at the mine of origin or due diligence practices at processing. For example, these include the Solar Stewardship Initiative’s Supply Chain Traceability Standard, The CopperMark’s Chain of Custody Standard and Initiative for Responsible Mining Assurance’s (IRMA) Chain of Custody Standard for Responsible Mined Materials, and the Responsible Mica’s initiative traceability platform.
Multilateral and multi-stakeholder initiatives can complement private-sector led initiatives. These include the Global Battery Alliance as well as the digital product passport standard being jointly developed by the United Nations Economic Commission for Europe (UNECE) and the International Organization for Standardization (ISO) (see Box 2.1). Such product passport initiatives are emerging as there is increasing demand from manufacturers for supply chain transparency solutions due to regulatory requirements requiring transparent information on the environmental and social impacts of products.
The Global Battery Alliance’s Battery Passport
The GBA battery passport defines a measurement framework for site and facility level performance and sets rules for how data related to GHG emissions, child labour, environmental and human rights, biodiversity, circular design, forced labour and Indigenous Peoples’ rights is passed between entities from mining to manufacturing. The battery passport uses assurance of companies’ site-level management systems (e.g. adherence to other commitments in policies and processes as validated by a third-party certifier) as a proxy for their performance on these issues.
The GBA has conducted ten pilot studies to demonstrate the feasibility of the battery passport concept throughout certain EV battery value chain in countries such as Australia, Chile and China. In these pilots, externally validated information on the functionality and characteristics of the EV battery (e.g. model, battery chemistry, rated capacity) as well as on the origin of raw material inputs (e.g. lithium and nickel) is reported where available.
UNECE and ISO’s joint initiative on Digital Product Passport
The United Nations Economic Commission for Europe (UNECE) and the International Organization for Standardization (ISO) have launched a joint initiative to develop a global framework for Digital Product Passports (DPPs), aimed at improving sustainability, traceability, and circularity across supply chains. Announced in April 2025, the initiative seeks to overcome longstanding challenges such as data standardisation and interoperability, which have hindered cross‑sector adoption of traceability systems. The DPP is envisioned as a decentralised digital “language” that records essential lifecycle information such as product origin, material composition, environmental impacts, and compliance with sustainability standards, while allowing data to remain with its owner and be linked through existing business systems. This work builds on UNECE’s prior traceability efforts, including blockchain pilots and the UN Transparency Protocol, and is being formalised under the new international standard ISO/PWI 25534‑1: Digital Product Passport – Overview and Fundamental Principles.
Note: As part of the pilot studies, not all information has been made publicly available.
Table 2.1 summarises the current state of coverage across the four traceability dimensions, drawing on survey data and site visits, to identify where systems are in place, where gaps are most pronounced and what a targeted response could look like for each. This diagnostic underpins the policy recommendations provided in Chapter 6.
Coverage is uneven across core traceability dimensions, with distinct gaps visible for each
Examples of government-led traceability efforts
Some mineral producing and processing countries have set up government-run traceability systems to improve oversight over the supply chain from extraction until export and ensure proper tax collection. For example, Zambia’s Mineral Output Statistical Evaluation System (“MOSES”) tracks minerals from extraction to export. It monitors companies’ declared monthly production and compares them with customs’ documentation and export declarations. The system generates automated alerts for anomalies or suspicious patterns to ensure timely data sharing with law enforcement. Colombia’s National Mining Agency is setting up a Mineral Traceability Platform with similar aims, integrating information from the unified registry of minerals traders with document compliance at production level. Indonesia’s Sistem Informasi Mineral dan Batubara (SIMBARA) that integrates ten tracking systems across six ministries to monitor mineral flows through a unified supervision framework (see chapter 4 for more information). China’s rare earth traceability system requires companies along the whole supply chain to report product flows and integrate information across mining, smelting and manufacturing with the aim of strengthening oversight of the rare earth sector (See Box 2.3 for more information). The Brazilian government’s traceability project analyses gold’s geochemical, morphological and isotopic signatures to verify document-based chain of custody.
Mineral importing countries introduced traceability requirements to reach specific policy objectives. For example, China’s Interim Provisions on the Traceability and Recycling of Power Batteries for New Energy Vehicles (2018) establish a standardised tracking system for the full lifecycle of a battery, supporting material recovery (see Box 2.3 for more information). The United States CHIPS and Science Act aims to reduce reliance on strategic competitors in semiconductor and advanced manufacturing supply chains, which requires reinforced origin tracing. The European Union included requirements to map the supply chains of lithium, nickel and other critical minerals such as cobalt and graphite in the 2024 Critical Raw Materials Act. The 2023 EU Battery Regulation further requires companies to establish and operate chain of custody or traceability systems and identify upstream actors in the supply chain (European Union, 2023[17]). The regulation introduced a digital battery passport that will become active in 2027 which contains detailed information on battery composition and provenance, including mineral sourcing. Several pilot projects are actively testing traceability systems aligned with European Union regulations.
Launched in 2023, MaDiTraCe is a project funded by the European Union aimed at strengthening traceability, transparency and sustainability for critical mineral supply chains. The 42-month initiative is coordinated by French Geological Survey BRGM and brings together a consortium of 14 partners with geological surveys, universities and industry partners from seven European countries.
The project aimed to develop mineral traceability methodologies based on material fingerprinting and artificial tagging, targeting cobalt, lithium, natural graphite and rare earth elements. Its work spans three pillars: technological solutions for traceability and tagging, the integration of traceability registers into Digital Product Passports (DPPs), and association with certification systems at product, chain of custody or site level.
For material fingerprinting, samples from the main deposits worldwide were analysed using laboratory techniques (e.g. trace element composition, elemental mapping and isotopes) to determine a fingerprint for each deposit. For certain commodities, particularly lithium and neodymium, isotopic signatures were found to persist through processing and manufacturing, potentially enabling traceability from the geological resource to downstream products. For artificial tagging, the project developed solutions such as mineral-based taggants and 3D-printed QR codes in small particles. Both methods were validated under laboratory conditions, with further work required to support cost-effective deployment at scale.
The project also aimed to combine these physical methods with digital traceability tools, including blockchain, decentralised identifiers (DIDs), verified credentials, digital wallets and smart contracts, to support secure and auditable traceability across the value chain. The project tested the CERA4in1 certification scheme, which integrates four standards covering mining exploration readiness, industry performance across mining, refining and smelting, chain of custody, and product level.
MaDiTraCe illustrates the role that policymakers can play in facilitating the development of technical solutions to traceability. The project's results indicate that material fingerprinting and artificial tagging are feasible under laboratory conditions, and further research may extend the range of minerals to which these methods can be applied. Deployment at scale would require additional work, in particular to reduce costs and to integrate physical and digital traceability tools into systems suited to industry use. Continued collaboration between governments, research institutions and industry will be important in taking these solutions from validation towards wider application.
Introduced so far under the EU Ecodesign for Sustainable Products Regulation, the digital product passports (DPP) will improve access to information on product origin, material composition, environmental impacts, and end‑of‑life options for nearly all products sold in the EU. The EU Battery Regulation has already begun reshaping battery industry practices, requiring detailed traceability and lifecycle data through mandatory battery passports from 2027 onward (CEPS, 2024[18]).
China’s Interim Provisions on the Traceability and Recycling of Power Batteries for New Energy Vehicles, implemented in 2018, establishes a standardised tracking system, covering every stage of the battery lifecycle from production to recycling. Vehicle manufacturers must set up recycling service networks and information platforms to trace batteries, while battery producers are required to provide unique codes and technical specifications for each unit. Detailed protocols govern collection, storage, transport, dismantling, and recycling processes to maximise resource recovery.
China’s Rare Earth Management Regulations, effective 1 October 2024, consists of a product tracing system for the rare earth sector. Companies engaged in mining, smelting and separation, metal processing, use, and export are required to establish product flow record systems and input data into a national traceability platform. The Ministry of Industry and Information Technology released draft interim measures to strengthen oversight of the rare earth sector in 2025, including a dedicated framework for product information traceability. The proposed system would require companies in the rare earth supply chain to register and report product flow data monthly. Authorities at national and local levels would have access to integrated data from mining quotas, export permits, customs declarations, and taxation records.
There is no single model for traceability systems. They vary in terms of the information that must be recorded, the technology used to track and communicate this information, and the policy objectives they aim to achieve (IEA-OECD, 2025[11]). Furthermore, how these systems are being adopted in practice across the private sector has remained relatively underexplored. Unlike the landscape of industry-led RBC initiatives, traceability adoption by the private sector does not lend itself to equivalent mapping at the moment. The majority of traceability systems are implemented within individual firms using proprietary tools or internal processes that are not typically publicly disclosed. Similarly, the market for external providers and platforms remains nascent. As such, this section leverages data collected from the survey to identify how traceability systems are currently being adopted by the private sector in practice.
The survey indicates that traceability systems are widespread, but that significant gaps remain. As further explained in chapter 5, the primary drivers for adopting traceability systems are consumer demand, brand reputation, and regulatory compliance rather than proactive risk management. This is reflected in what systems track in practice, with most respondents collecting data on country of origin and mine location compared to far less consistent tracking of physical transformation of minerals, tax payments and ownership structures. Similarly, the level of scrutiny does not appear to respond to the risk profile of a given mineral supply chain. Coverage remains strongest at upstream stages of mining and refining but declines downstream, with manufacturing and recycling less commonly included. This is an important consideration as several critical mineral-rich products start to reach end-of-life at scale in the coming decade and their recycling gains importance. Finally, full end-to-end traceability was largely absent in practice, as most companies rely primarily on a combination of less resource-intensive transparency approaches such as mass balance, chain of custody protocols, supplier mapping and trade data analysis. Each of these dimensions is examined in detail below.
Implementation of traceability systems varies markedly across the four supply chain segments covered by the survey. As shown in Figure 2.3, traders report the highest overall uptake, with the largest share of respondents indicating full implementation and virtually no respondents reporting an absence of systems or plans to adopt one. Smelters/refiners and manufacturers/end-users occupy the middle of the distribution, with partial implementation dominant in both segments, full implementation accounting for a smaller share and a meaningful minority still at the planning stage. Miners show the lowest level of uptake, with fully implemented systems representing only a modest share of responses and the highest proportion of respondents reporting neither a system in place nor plans to adopt one. These differences in baseline implementation should be borne in mind when interpreting subsequent figures in this chapter, as patterns in what is tracked, how, and with what information will in part reflect the varying depth of traceability adoption across the four segments of the supply chain.
Note: This figure presents responses to survey Question 7 (“Does your company currently use, or participate in, any traceability system?”). Based on a subsample of 40 miners, 36 smelters/refiners, 42 manufacturers/end-users and 12 traders. Recyclers and transporters are excluded; manufacturers and end-users are grouped into a single category. Survey data was collected between late 2025 and early 2026. Please refer to the methodology section for further detail.
Source: OECD-IEA Survey on Traceability in Critical Mineral Supply Chains
2.5.1. Diversity in traceability models
While full traceability consists of tracking minerals’ origin, geographic path, chain of custody and physical evolution, the term is also used as shorthand for a range of supply chain transparency approaches that may track some, though not all, of these criteria.
The survey shows that mass balance is the most widely used traceability model across supply chain segments. Under this approach, the volume of material entering an operation is reconciled with the volume leaving it, accounting for conversion and losses along the way. It allows for blending of different materials but requires the operator to make claims that correspond to the volume of responsible material that was used as an input. It strikes a practical middle ground: more rigorous than simple document-based systems, but less costly and infrastructure-intensive than identity preservation, which physically segregates material from specific sources throughout the supply chain. Identity preservation comes closest to complete traceability, but its high cost means it is rarely applied at the processing stage unless clients are willing to pay a premium for it — fewer than 30% of smelters in the survey report using it. At the other end of the spectrum, bulk commodity systems, which track certified or geographic origins in aggregate while allowing significant mixing of material from different sources, appear to be seldom used among respondents. Book and claim - completely decoupling physical supply from origin and performance through credits system – is reported to be rarely used.
The uptake and choice of traceability models vary markedly across supply chain segments. Traders stand out as the industry segment most frequently reporting implementation of some form of traceability in mineral supply chains (see Figure 2.4). While typically outside the scope of regulations incentivising traceability, commodity traders’ function is to match clients’ geographic, mineral grade and time needs. As they base their business model on arbitrage and hedging risks along these dimensions of transport, blending/processing and storage, it is likely that they need to collect traceability information on origin, geographic path, supply chain actors and mineral form (Trafigura, 2018[23]). The biggest traders are also vertically integrated into other supply chain stages, which may expose them to regulatory requirements in the countries of production or export.
Note: This figure presents responses to survey Question 12 (“What traceability model does the system use?”). Based on a subsample of 40 miners, 36 smelters/refiners, 42 manufacturers/end-users and 12 traders, irrespective of whether they reported implementing a traceability system. Recyclers and transporters are excluded; manufacturers and end-users are grouped into a single category. “None” and “Other” response options are not shown in the figure. Respondents could select multiple traceability models; therefore, percentages may sum to more than 100%. Survey data was collected between late 2025 and early 2026. Please refer to the methodology section for further detail.
Source: OECD-IEA Survey on Traceability in Critical Mineral Supply Chains
2.5.2. Diversity in supply chain coverage
Traceability systems’ supply chain coverage may vary widely. Traceability systems can cover the entire mineral supply chain from manufacturing to mining and recycling, or only cover selected segments of the supply chain to respond to the needs of a specific tier or group of companies in an industry association. Insights from the survey suggest that upstream segments of the mineral supply chains, namely mining and refining, are more commonly covered by existing traceability systems (Figure 2.4). This is consistent with industry practice, whereby downstream companies cascade traceability demands up the supply chain to cover information about origin, geographic path, chain of custody, transformation and conditions of extraction and trade. Downstream tiers in the supply chain are therefore less frequently covered. While typically providing rather than requesting traceability information, companies at the mining stage still have a supply chain for mining equipment, as well as chemical and energy inputs they may track both further upstream (procurement) and downstream (reselling) as in certain regions these may be used in illegal operations. Survey results indicate that, although the majority of respondents performing recycling/reusing activities have at least a partial traceability system in place, the majority of them also report that their traceability system primarily addresses upstream operations, but not the recycling/reuse tier of the supply chain. It is also noteworthy that all survey respondents performing recycling/reusing activities operate in at least one additional supply chain tier.
Upstream segments are most commonly covered by traceability systems, while downstream stages such as final manufacturing and recycling are tracked less frequently, with notable differences across company types and minerals.
Note: This figure presents responses to survey Question 9 (“Which supply chain tier(s) are covered by the traceability system that you implement or participate in? Select all that apply”). Multiple responses were permitted. The response option “We do not track beyond tier-1 suppliers” (selected exclusively by four manufacturers) is not shown in the figure. Based on a subsample of 36 smelters/refiners, 42 manufacturers/end-users and 12 traders, irrespective of whether they reported implementing a traceability system. Miners, recyclers and transporters are excluded; manufacturers and end-users are grouped into a single category. Survey data was collected between late 2025 and early 2026. Please refer to the methodology section for further detail.
Source: OECD-IEA Survey on Traceability in Critical Mineral Supply Chains
Traceability systems vary not only in their design and supply chain coverage, but also in the proportion of a company’s mineral inputs they actually track. Among survey respondents with traceability systems in place, coverage varies widely: while almost 40% trace more than 90% of their mineral input, the remaining majority trace significantly less, with roughly half of all respondents covering less than 60% of their mineral input.
Complete, end-to-end traceability and verification of material origin for all mineral input may not be fully achievable, nor necessarily desirable. Manufacturing companies may have several thousand suppliers across their supply chains, and tens of different raw materials (Murphy, 2022[24]; Abel Ortego, 2020[25]). Upstream companies, including small-scale producers, may face difficulties in setting up traceability systems and passing on verifiable information without adequate support.
Under OECD RBC standards, the scope and level of detail of information collected through traceability systems should be proportionate to the risk profile of the supply chain. The higher the risks, the more detailed and structured the traceability system is expected to be. However, survey results point to another dynamic: nearly half of respondents with existing traceability systems reported that their systems collect the same information regardless of risk level. The remainder indicated some degree of differentiation, either by covering additional tiers or risks for high-risk areas (25%), or entailed some additional verification measures (18%), such as field assessments and audits. The share of respondents reporting risk-differentiated systems is higher for supply chain segments located in the middle of the supply chain (recyclers and traders with 50% and 45%, but with a smaller sample size) and those that have been more exposed to supply chain requirements, such as smelters and refiners (31%).
2.5.3. Diversity in information collected by traceability systems
Traceability systems capture more than material origin data. Beyond core country of origin data, most respondents collect a broad range of information on environment, governance, and human and labour rights through their traceability systems, largely driven by existing due diligence and compliance processes. However, as shown in the four graphs below, collection of information such as forced labour risks, tax payments, and supplier affiliations remains inconsistent.
While the majority of respondents report collecting basic types of traceability information such as the country of origin (93%), location of mine of origin (82%), upstream actors who handled the product (70%) and locations of consolidation, trade and processing (63%), information on the source of mineral - whether primary or scrap (72%) and method of extraction (58%) also tends to be collected (Figure 2.5). Physical evolution of mineral input is the least collected type of information across the different segment groups.
Information on the country and mine of origin is most commonly collected, while data on transportation routes and the physical transformation of minerals is reported less frequently.
Note: This figure presents responses to survey Question 13 (“What information is collected under the traceability system that your company uses?”). Percentages refer to the share of respondents selecting each category (multiple responses permitted). Based on a subsample of 40 miners, 36 smelters/refiners, 42 manufacturers/end-users and 12 traders, irrespective of whether they reported implementing a traceability system. Recyclers and transporters are excluded; manufacturers and end-users are grouped into a single category. “Other” response options are not shown in the figure. Survey data was collected between late 2025 and early 2026. Please refer to the methodology section for further detail.
Source: OECD-IEA Survey on Traceability in Critical Mineral Supply Chains
Survey responses also indicate that close to 80% of companies with at least a partial traceability system in place collect some kind of environmental information. Only a small share report they do not collect any environmental information at all. This trend is consistent for different supply chain segments. The most commonly collected information across company types includes:
Environmental information from audits;
Environmental impact assessment of the mine of origin;
Scope 1 and 2 GHG emissions.
This result is unsurprising, as such information is typically gathered through existing due diligence processes, audits of operational and governance risks, or compliance requirements, making it relatively straightforward for companies to have such information readily available and report it.
Environment-related information is collected by the majority of respondents.
Note: This figure presents responses to survey Question 14 (“What environment-related information (if any) is collected under the traceability system that your company uses?”). Based on a subsample of 40 miners, 36 smelters/refiners, 42 manufacturers/end-users and 12 traders, irrespective of whether they reported implementing a traceability system. Recyclers and transporters are excluded; manufacturers and end-users are grouped into a single category. Respondents could select multiple response options; therefore, percentages may sum to more than 100%. “Any” refers to respondents selecting at least one type of environment-related information collected under their traceability system. “Other” response options are not shown in the figure. Survey data was collected between late 2025 and early 2026. Please refer to the methodology section for further detail.
Source: OECD-IEA Survey on Traceability in Critical Mineral Supply Chains
In contrast, information related to mine closure and rehabilitation plans, chemicals management systems at the mine of origin, and REACH/RoHS compliance is collected less frequently. This highlights the role of robust due diligence and operational practices as well as environmental legislation in enabling and strengthening traceability.
Additionally, about a third of respondents report tracing the share of recycled materials in products and material feedstock, i.e. their recycled content. Those reporting not tracing the recycled content either do not have a traceability system in place or do not track this information, likely because they do not handle recycled materials or products with established recycled content requirements. Unsurprisingly, miners largely report not tracking this type of information compared to other types of companies. This is a relatively high share given that the EU's mandatory recycled content requirements for minerals, which set a minimum share of recycled metals in batteries and permanent magnets, are not yet in force. These requirements aim to facilitate the development of markets for secondary materials.
Survey respondents employ a range of methods to trace recycled content, with simpler approaches far outweighing advanced techniques in adoption. Regarding methods used to trace recycled content, information collection, recording and sharing with direct customers and suppliers is most common, followed by the use of a chain of custody method. The use of recycled content certification schemes appears to be the least commonly used method. To verify information related to recycled/scrap material, among respondents tracing such information, most common approach seems to be simple methods such as analysing digital information or document paper trails. Advanced methods such as geochemical tracking or mineral fingerprinting to compare with mine of origin mineral data, X-ray fluorescence (XRF) or laboratory assay of a randomised sample of minerals from the batch, or smart contracts to identify inconsistencies are very rarely used. The use of artificial intelligence and machine learning to identify inconsistencies is also rare but slightly more common.
Regarding governance-related data, as shown in Figure 2.7, more than half of respondents collect such type of information. The information reported the most through traceability systems are background and sanctions checks on all upstream actors, as well as the ownership and the corporate structure of the mine/exporter. This is not surprising, as this covers basic information typically collected when opening a business relationship. Information related to supply chain due diligence, such as political or military affiliation of suppliers, taxes and other payments to security forces or any other armed groups, or to governments is collected by only 40% of the smelters, whose management and data collection systems are typically audited on an annual basis. Contracts between the mine of origin and the host governments are not commonly reported as collected through traceability systems, despite global efforts led by the EITI (EITI, 2026[26]). The use of traceability systems to track the collection and payment of taxes appears to be low for mineral production and downstream entities. Miners report lower rates of traceability as they are the supply chain segment which usually discloses information rather than collecting it. Downstream companies may not have the systems in place to directly track the extracted minerals to tax ultimately paid.
Note: This figure presents responses to survey Question 16 (“What governance-related information (if any) is collected under the traceability system that your company uses?”). Based on a subsample of 40 miners, 36 smelters/refiners, 42 manufacturers/end-users and 12 traders, irrespective of whether they reported implementing a traceability system. Recyclers and transporters are excluded; manufacturers and end-users are grouped into a single category. Respondents could select multiple response options; therefore, percentages may sum to more than 100%. “Any” refers to respondents selecting at least one type of governance-related information collected under their traceability system. “Other” response options are not shown in the figure. Survey data was collected between late 2025 and early 2026. Please refer to the methodology section for further detail.
Source: OECD-IEA Survey on Traceability in Critical Mineral Supply Chains
Similarly, as shown in Figure 2.8, around 60% of respondents collect at least some human and labour rights information, with traders reporting the highest overall uptake (the sample is composed of 12 respondents). With regards to information related to human and labour rights, most of the respondents focus on policies on decent working conditions, health and safety, human rights and modern slavery. Despite the emergence of legislation requiring companies in key importing markets to publish annual statements on forced labour and modern slavery, only around one-third of manufacturers in the survey sample report collecting this type of information through their traceability systems. Smelters are typically subject to human rights supply chain due diligence through both government regulations and market makers expectations, but only half of surveyed smelters report they collect information on human rights risks and suppliers’ actions to identify and mitigate these risks through traceability systems.
Note: This figure presents responses to survey Question 15 (“What information related to human and labour rights (if any) is collected under the traceability system that your company uses?”). Based on a subsample of 40 miners, 36 smelters/refiners, 42 manufacturers/end-users and 12 traders, irrespective of whether they reported implementing a traceability system. Recyclers and transporters are excluded; manufacturers and end-users are grouped into a single category. Respondents could select multiple response options; therefore, percentages may sum to more than 100%. “Any” refers to respondents selecting at least one type of human or labour rights-related information collected under their traceability system. “Other” response options are not shown in the figure. Survey data was collected between late 2025 and early 2026. Please refer to the methodology section for further detail.
Source: OECD-IEA Survey on Traceability in Critical Mineral Supply Chains
The patterns identified in this chapter play out differently across mineral supply chains and producing regions, shaped by the specific governance frameworks, ownership structures and operational contexts of each. Chapters 3 and 4 examine how these dynamics manifest in practice for lithium in Argentina and Chile and nickel in Indonesia and the Philippines respectively. In lithium supply chains, relatively formal production structures and concentrated upstream ownership create conditions that are comparatively amenable to traceability, though midstream concentration in China and data gaps remain significant constraints. In nickel, complex and often opaque ownership structures, diverse processing pathways and significant operational and governance risks present a more demanding environment, where the gap between traceability ambition and implementation is wider and the stakes of inaction higher.
Base Erosion and Profit Shifting (BEPS) refers to strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in tax rules to:
Shift profits to low- or no-tax jurisdictions;
Erode the tax base of countries where real economic activity occurs.
The OECD/G20 BEPS Project introduced 15 Actions to address these risks by aligning taxation with value creation, improving transparency, and strengthening international coherence of tax systems.
BEPS Action 4 introduces rules to restrict excessive interest deductions, a common profit-shifting mechanism in the extractive sector. Multinational groups frequently capitalise local subsidiaries in resource-rich countries with high levels of intra-group debt, allowing profits to be shifted through excessive interest payments. Effective enforcement of these rules requires visibility over intra-group financing arrangements, reinforcing the importance of integrated data systems that can track financial flows alongside operational activity.
BEPS Actions 8–10 form the core of the BEPS framework for the extractive sector, ensuring that transfer pricing outcomes reflect the location of real economic activity and value creation. These actions are particularly critical for commodity transactions, where pricing can be manipulated through under-pricing of exports, inappropriate comparables, or the use of marketing hubs. The OECD Transfer Pricing Guidelines2 emphasise the use of the Comparable Uncontrolled Price (CUP) method and accurate delineation of transactions when pricing commodities. However, effective application depends heavily on access to reliable data on production volumes, quality, transport, and sales. This is where traceability systems become essential, as they enable tax authorities to verify the integrity of transactions across the value chain.
BEPS Action 13 contains revised standards for transfer pricing documentation incorporating a master file, local file and a template for CbCR. CbCR is a tool to enhance transparency by requiring multinational enterprises to report on revenue, profits, taxes paid, and certain measures of economic activity. For tax administrations, CbCR provides a high-level risk assessment tool to identify discrepancies between where profits are reported and where substantive activities occur. Importantly, CbCR can be understood as a form of macro-level traceability of profits, complementing physical traceability systems that track minerals and transactions along the value chain. Both are necessary: while CbCR identifies risk patterns, traceability systems provide the granular data needed to investigate and enforce.
The Global Minimum Tax (GMT), applies to multinational enterprise (MNE) groups with consolidated annual revenues of EUR 750 million or more. Its core objective is to ensure that such groups are subject to a minimum effective tax rate (ETR) of 15% in every jurisdiction in which they operate. By doing so, the rules aim to reduce harmful tax competition, limit the “race to the bottom” in corporate income taxation, and encourage investment decisions based on real economic substance rather than tax differentials.
Under the GMT rules, when the ETR in a jurisdiction falls below 15%, a top-up tax may be imposed, either by the source jurisdiction or by other jurisdictions within the MNE group. Therefore the implementation of the GMT will have a pronounced impact on the effectiveness of tax incentives (particularly those that are income based). Tax incentives that are successful at attracting economic substance, such as investment in people and tangible assets, are less likely to be affected by the GMT than income-based tax incentives such as corporate income tax holidays, exemptions or reduced rates, when they are not tied to economic substance, which often do not provide value for money in terms of investment generated per dollar of tax cost. This distinction is critical when assessing national investment regimes that are designed to attract large-scale capital-intensive projects, including in the mining sector and in particular traceability systems.
The central policy question is whether tax incentives can be economically effective to promote certain activities across the mining value chain. For Nickel and Lithium producing countries, income-based incentives that directly reduce the ETR below 15% in their jurisdiction are the most exposed. Incentives linked to real investment, tangible assets and employment are more consistent with the policy direction encouraged by the OECD.
The strategic value of tax incentives more broadly especially in the mining sector must now be assessed considering the GMT rules. Jurisdictions relying heavily on income-based tax incentives may have to review the effectiveness of their tax incentives. To support the development of traceability systems by MNEs, countries could consider expenditure-based incentives that reduce the cost of developing these systems and encourage companies to invest in traceability systems across the mining value chain.
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← 1. Domestic tax base erosion and profit shifting (BEPS) relates to tax planning strategies that multinational enterprises use to exploit loopholes in tax rules to artificially shift profits to low or no-tax locations as a way to avoid paying tax. The OECD/G20 BEPS Project equips governments with rules and instruments to address tax avoidance, ensuring that profits are taxed where economic activities generating them take place and where value is created.