IT giant IBM and tech firm MineHub Technologies have partnered to use blockchain technology to track high-value minerals across the supply chain.
The platform, built on the cloud-based IBM Blockchain Platform, seeks to improve transparency across the entire supply process, from miner to buyer.
The two companies are also aiming to improve operational efficiencies, logistics and reducing costs, with the blockchain solution.
Currently, the $1.8 trillion global mining and metals market tends to rely on manual, paper-based processes.
The hope is that putting transactions onto a shared, real-time view ledger will improve trust across all areas of the chain.
“By digitising the supply chain, we can increase the level of automation, reduce reliance on intermediaries and increase the speed at which goods are transferred from miners to end buyers,” said Vince Sorace, founder and CEO of MineHub.
“This creates the opportunity for transformative efficiencies and cost reductions throughout all aspects of operations.
“This is a significant advancement for an industry looking to integrate and use data in ways not previously possible."
How will the blockchain supply chain work?
Goldcorp’s Penasquito Mine in Mexico will be the first to use the MineHub platform. Here’s how it will work:
Ore is mined
Company uploads data to the blockchain
Independent regulators verify
Materials loaded for transport
Each transaction in material’s journey logged on smart contract
Companies connected to the Penasquito Mine, such as Wheaton Precious Metals or ING bank will use the smart contracts during this process to verify the ore’s authenticity.
The growing uptake of a blockchain supply chain
Blockchain's digital ledger technology was originally created to facilitate a trustworthy digital currency. But the immutable nature of blockchain has seen it increasingly become adopted in supply chains, including the pharmaceutical, food and diamond industry.
"Blockchain technology can serve as the foundation for transforming entire business processes in the mining industry while creating greater transparency across the supply chain," said Manish Chawla, general manager, Global Industrial Products, IBM.
"By bringing together stakeholders at different points across the mining and minerals supply chain, MineHub is building a platform that has the potential to bring new levels of efficiency and trust to the mining industry."
Minehub plans to roll out the solution to others in the mining industry and is working with IBM to scale the platform and identify new use cases.
Arnout van Heukelem, global head of Metals and Mining at ING said:
“As a global leader in banking in the metals and mining sector, we feel many of the operational challenges that our clients face. Blockchain has the potential to reduce or even overcome these, as shown by our pioneering work in energy with VAKT, in trade finance with Komgo and Voltron, and in the soft commodity sector.
“I am excited to be working together with MineHub and help our clients in metals and mining lower costs, increase transparency and contribute to sustainable production and trading."