Anglo American has gone public with a bid to buy Sirius Minerals and its North Yorkshire polyhalite project in the UK.
The all-cash bid, which values Sirius at £386 million ($507 million), comes shortly after Sirius announced a strategic review for the project that included a broader process to seek a major strategic partner for the asset.
Anglo says it identified the project as being of potential interest some time ago, given the quality of the underlying asset in terms of scale, resource life, operating cost profile and the nature and quality of its product.
The North Yorkshire polyhalite project, which is spilit into two stages, will see product extracted via two mine shafts and transported to Teesside, in the northeast of England, on a conveyer belt system in an underground tunnel. It will then be granulated at a materials handling facility (MHF), with the majority being exported to overseas markets.
Infrastructure development on the project includes sinking the shafts at the Woodsmith mine to access the polyhalite deposit (using Herrenknecht’s Shaft Boring Roadheader); developing a 37 km-long underground mineral transport system using tunnel boring machines; constructing a MHF in Teesside for granulating or chipping the mined material into the final product; and harbour facilities comprising an approximately 3.5 km-long overland conveyor, a ship berth and a ship loader located adjacent to the harbour on the River Tees.
In its announcement this morning, Anglo said: “The project has the potential to fit well with Anglo American’s established strategy of focusing on world-class assets, particularly in the context of Anglo American’s portfolio trajectory towards later cycle products that support a fast-growing global population and a cleaner, greener, more sustainable world.”
Anglo is not new to the fertiliser market having, until 2016, a phosphates business in Brazil. It sold the mine, beneficiation plant, two chemical complexes and two further mineral deposits that made up this business that year to China Molybdenum in a $1.5 billion deal that also included its niobium assets.
Sirius announced its strategic review back in September 2019 after it had to terminate a $2.5 billion revolving credit facility stage 2 financing for the project (to get it to 20 Mt/y capacity) due to a worsening of market conditions for a required bond raising.
This led to the company slowing development across the project in order to preserve funding to allow more time to “develop alternatives and preserve the significant amount of inherent value in this world-class project”, Chris Fraser, Managing Director and CEO, said at the time.
This saw the company lay out a pathway that would still see first polyhalite production in the June quarter of 2022, but could see the ramp-up to stage one 10 Mt/y polyhalite capacity reached in the September quarters of 2025 or 2026, depending on if there was a 12 or 24 month deferral of the planned development scope.
Anglo said, during the first two years after an offer is successfully completed, development work on the project is expected to be broadly in line with Sirius’ revised development plan “although Anglo American intends to update the development timeline, optimise mine design and ensure appropriate integration with its own operating standards and practices”.
It added: “Anglo believes that the project has the potential to become a world-class, low-cost and long-life asset. Sirius has progressed the development of the project to an advanced stage, with construction now under way for over two years.
“Sirius has indicated that this is currently the world’s largest known high-grade polyhalite deposit with a JORC reserve of 290 Mt, with a grade of 88.8%, and a resource of 2,690 Mt. The resource indicated by Sirius has the scale, thickness and quality to be mined efficiently using bulk mining methods through a relatively simple, low-energy, non-chemical production process.”
In addition, Sirius has indicated the project could operate at an EBITDA margin potentially well in excess of 50%, according to Anglo, leaving the project well positioned for strong through-the-cycle profitability with a long anticipated asset life.
“At this stage, the project requires a significant amount of further financing to develop and commission the operation that has proven challenging for Sirius to procure on an economic basis,” the diversified miner said. “Anglo American, as one of the world’s leading mining companies, has the resources and capabilities to help build on the achievements of the Sirius team. Anglo American remains committed to its disciplined capital allocation framework.”
Anglo explained that there is potential long-term benefits in applying its technical expertise in both the development and operational phases, as well as utilising its recognised Operating Model to drive safety and productivity to “world-leading standards”.
“Integration into Anglo American’s global marketing network would provide full mine-to-market capabilities and build on Anglo American’s institutional experience in the world’s major fertiliser markets,” it added.
Sirius’ polyhalite product, POLY4, is a multi-nutrient fertiliser certified for organic use and has the potential to generate demand at a competitive cost that supports a strong margin, according to Anglo.
“POLY4 is an attractive low-chloride alternative to traditional potassium-bearing mineral products on a cost-effective basis. It includes four of the six key nutrients that plants need to grow – potassium, sulphur, magnesium and calcium,” it said. “The use of fertilisers is one of the most effective ways to improve agricultural yields and therefore help to address the anticipated future imbalance between food, feed and biofuel demand and supply caused by a fast-growing global population and limited additional land availability for agricultural use.”
Anglo American says it has received an important licence for the tailings facility at its Minas-Rio iron ore mine, in Brazil, that will help the long life operation reach its full potential.
The company received the next phase of its operating licence for the facility following the work to raise the dam as part of the Step 3 licence area of the mine. The regulatory authorities in Brazil granted the installation licence for this work in January 2018 and the construction work was completed in accordance with that licence in August 2019, Anglo said.
Seamus French, CEO of Bulk Commodities at Anglo American, said: “This is an important milestone for our Minas-Rio iron ore operation in Brazil towards reaching its full potential. Minas-Rio has a long asset life of 48 years and produces a high grade, premium quality product for our customers, supporting lower emissions in the steel industry.”
He added: “We expect Minas-Rio to produce 23 Mt in 2019, with an FOB unit cost of circa-$24/t.”
The Minas-Rio tailings dam uses a downstream construction design and is an embankment dam structure, built using compacted imported earth-fill material, with carefully selected granular materials for the drainage and filter zones, Anglo explained. Tailings are not used to build the dam, and instead construction materials are placed in controlled layers.
“This is a conservative and high quality design for a tailings dam, being designed and built as a water-retaining type of dam,” the company said.
When the International Council on Mining and Metals (ICMM) launched its Innovation for Cleaner, Safer Vehicles (ICSV) program just over a year ago, some industry participants may not have realised how much progress could be made so quickly by taking a collaborative approach.
The ICMM has proven influential across the mining industry since its foundation in 2002 in areas such as corporate and social governance, environmental responsibility, and stakeholder relations, yet it has rarely, until this point, engaged directly as an industry group with original equipment manufacturers (OEMs) and service providers.
Close to 12 months after being established, it’s clear to see the program and the council itself has been successful in bridging a divide.
It has been able to corral a significant portion of the mining and mining OEM market players into a major industry discussion on core focus areas set to dominate the sector for the next two decades.
Now 27 of the world’s leading mining companies and 16 of the best-known truck and mining equipment suppliers are collaborating in a non-competitive space “to accelerate the development of a new generation of mining vehicles that will make vehicles cleaner and safer,” the ICMM says.
The ICSV program was created to address three of the most critical safety, health and environment performance issues in the ICMM’s mission towards zero harm and decarbonisation. Achieving this goal would involve the industry introducing and adopting the next generation of equipment to respond to the challenges.
More specifically, the program aims to:
Introduce greenhouse gas emission-free surface mining vehicles by 2040;
Minimise the operational impact of diesel exhaust by 2025; and
Make collision avoidance technology (capable of eliminating vehicle related collisions) available to mining companies by 2025.
In all three, it seeks to address the industry’s innovation challenge of ‘who motivates who’ or the chicken and egg analogy, according to Sarah Bell, Director, Health, Safety and Product Stewardship for the ICMM.
“You can imagine a mining company saying, ‘we can’t adopt technology that doesn’t yet exist’ or an OEM saying, ‘we can’t invest in development because we’re getting mixed market signals’. This is, of course, why this program has been set up in the way it has,” she told IM. “Bringing both the mining company and OEMs together, they have been able to work through these normal innovation challenges and align on defining the direction of travel and critical complexity to be solved for each of the ambitions set.”
The list of companies the ICMM has been able to involve in this program is impressive.
It is being guided by a CEO advisory group of six; three from the mining community – Andrew Mackenzie (CEO, BHP), Mark Cutifani (CEO, Anglo American) and Nick Holland (CEO, Gold Fields) – and three from the mining equipment supply side – Denise Johnson (Group President of Resource Industries at Caterpillar), Max Moriyama (President of the Mining Business Division at Komatsu) and Henrik Ager (President of Sandvik Mining and Rock Technology).
On the mining company front, ICMM membership makes up around 30% of the total metal market share, with some 46% in copper, 27% in gold and 42% in iron ore. Participating OEMs and third-party technology providers, meanwhile, include the three majors above, plus Cummins, Epiroc, Wabtec Corporation (formerly GE), Hexagon Mining, Hitachi Construction Machinery, Liebherr, MacLean Engineering, MTU, Modular Mining Systems, PBE Group, Nerospec, Future Digital Communication and Miller Technology.
Bell says the high-level participation builds the “widespread confidence” needed to accelerate investment in these three key areas”, while the ICMM’s focus on the leadership side of the technology integration equation and change management has proven “absolutely key”.
She clarified: “This collaboration operates under anti-competition and anti-trust rules. Our role is to convene the parties, motivate action and promote solutions.”
The program offers a “safe space for the OEMs and members to work openly in a non-competitive environment”, she added, explaining that the aim is not to come up with “preferred technologies”, but define the “functional and operational pathways required to meet the ambitions set”.
Vehicle interaction (VI)
Some of the ambitions look easier to achieve than others.
For instance, collision avoidance and proximity detection technology has made huge strides in the last decade, with the ICMM arguing its 2025 target is like a “sprint”, compared with the “10,000 m race” that is minimising DPM underground by 2025 and the longer-term aim to introduce GHG-free surface mining vehicles by 2040.
“There are regulations that require implementation of collision avoidance and proximity detection technology by the end of 2020 in South Africa,” Bell said. This will undoubtedly provide a catalyst for further developments to speed up.
The ICSV program is also leveraging the work of the Earth Moving Equipment Safety Round Table (EMESRT) in its development of fundamental functional/performance requirements for operators and technology providers.
These requirements were updated and released by EMESRT in September and are known as ‘PR5A’.
Bell delved into some detail about these requirements:
“The EMERST requirements are designed around a nine-level system that seeks to eliminate material unwanted scenarios such as – equipment to person, equipment to equipment, equipment to environment and loss of control,” she said.
“The fundamental change with this newly released set of functional requirements by EMESRT is that the mining industry users have defined the functional needs for levels 7-9 (operator awareness, advisory controls, and intervention controls). That stronger level of collaboration hasn’t necessarily been there.”
EMESRT and its guidelines have been given an expanded global platform through the ICMM’s ICSV, with the program, this year, providing the convening environment for users and technology providers to help finalise these updated requirements, according to Bell.
With all of this already in place, one could be forgiven for thinking the majority of the hard work involved with achieving the 2025 goal is done, but the working group focused on VI knows that while OEMs continue to retrofit third-party vehicle collision and avoidance systems to their machines the job is not complete.
“Let’s think about the seatbelt analogy: you don’t give buyers of vehicles a choice as to whether they want a seatbelt in their car; it just comes with the car,” Bell said.
“At the moment, by design, vehicles don’t always have this collision and avoidance systems built in, therefore there is a big opportunity for collaboration between OEMs and third-party technology providers.”
Underground DPM goals
“The DPM working group have recognised that, in the case of the DPM ambition, ‘the future is already here, it’s just unevenly distributed’,” Bell said.
“Bringing together the OEMs and the mining companies this year through the ICSV program has enabled the group to explore the variety of existing solutions out there today,” she added.
These existing solutions include higher-tier engines, battery-electric equipment, tethered electric machinery, fuel cell-equipped machines for narrow vein mining and solutions to remove DPMs and other emissions from the environment like Johnson Matthey’s CRT system.
And, there are numerous examples from North America – Newmont Goldcorp at Borden, and Glencore and Vale in Sudbury – South America – Codelco at El Teniente Underground – and Europe – Agnico Eagle Mines at Kittilä (Finland, pictured) – to draw from.
Bell also mentioned some examples from Australia where regulatory changes have seen miners apply existing technology and carry out changes in their work plans and maintenance practices to minimise DPM emissions.
Haulage and loading flexibility, battery charging and mine design have all come under the spotlight since these new generation of ‘green’ machines have emerged, so achieving the 2025 goal the ICSV stated is by no means a foregone conclusion.
“There remains more work to do in achieving diesel-free vehicles underground,” Bell said.
The interested parties are aware of this and the program’s DPM maturity framework is helping miners and OEMs plot a course to reaching the target, she explained.
“The DPM maturity framework promotes existing solutions available today that would enable a mining operation to reduce their DPM emissions to a level that would meet the ambition level (shown as Level 4 – transition to zero),” she said.
These frameworks are useful for starting a “change conversation”, Bell said, explaining that mining companies can assess within their organisations where they currently sit on the five-level chart and discuss internally how to move up the levels to meet their goals.
These same frameworks look beyond minimising “the operational impact” of DPM emissions underground, with Bell explaining that Level 5 of the maturity framework involves “non-DPM emitting vehicles”.
GHG-free surface mining vehicles
Even further in the distance is the longer-term target of introducing greenhouse gas emission-free surface mining vehicles by 2040.
This ambition, more than any other, is less clearly defined in terms of technological solutions across the industry.
While battery-electric solutions look like having the goods to reach DPM-free status underground with expected developments in battery technology and charging, the jury is still out on if they can create a GHG-free large-scale open-pit mining environment.
The ability for industry to pilot and validate technology options like this “within the boundaries of anti-competition” is crucial for its later adoption in the industry, Bell said.
She said a key enabler of industry decarbonisation is access to cost competitive clean electricity, which would indicate that regions like South America and the Nordic countries could be of interest in the short and medium term for deploying pilot projects.
It is this goal where the industry R&D spend could potentially ramp up; something the ICMM and the ICSV is aware of.
“For the OEMs and mining companies to effectively minimise capital expenditure, optimise R&D expenditure and reduce the change management required by the industry, there needs to be a careful balance of encouraging innovation of solutions, whilst managing the number of plausible outcomes,” Bell said.
In terms of encouraging the development of these outcomes, carbon pricing mechanisms could provide some positive industry momentum. Vale recently acknowledged that it would apply an internal carbon tax/price of $50/t when analysing its future projects, so one would expect other companies to be factoring in such charges to their future mine developments.
Industry-wide GHG emission caps could also provide a catalyst. In countries such as Chile – where up to 80% of emissions can come from haul trucks, according to ICMM Senior Programme Officer, Verónica Martinez – carbon emission reduction legislation could really have an impact on technology developments.
While 2019 was a year when the three working groups – made up of close to 50 representatives in each work stream – outlined known barriers or opportunities that might either slow down or accelerate technology developments, 2020 will be the year that regional workshops convened to “encourage first adopters and fast followers” to move these three ambitions forward take place, Bell said.
A knowledge hub containing the previously spoken of maturity frameworks (delivered for all three groups) will allow the wider industry outside of the ICMM membership to gain a better understanding of how the miner-OEM-service provider collaboration is working.
Bell said the ICMM already has a number of members testing these group frameworks on an informal self-assessment basis to understand “how they are being received at an asset level and feedback insights to the group in an effort to understand how we may portray an industry representative picture of where we are today”.
Such strategies bode well for achieving these goals into the future and, potentially, changing the dynamic that has existed between end users and suppliers in the mining sector for decades.
Bell said: “The feedback that we got from OEMs is that mining companies had completely different objectives, but they have now greater confidence that we are aligned on the direction of travel towards the ambitions set.”
Anglo American has signed a multi-year agreement with design, engineering, and system development firm First Mode that could see the Seattle-based company develop new systems and technology for the diversified miner.
First Mode, well known for its work adapting the tools and technologies developed for the robotic exploration of the solar system, will be supporting projects across Anglo American’s FutureSmart Mining™ program as part of the $13.5 million contract, it said. FutureSmart Mining is an innovation-led approach to address mining’s major sustainability challenges.
This work will include technology trade-off studies, engineering design, prototypical developments, technology demonstrations, delivery of integrated systems, and deployment to sites around the world, First Mode said.
Tony O’Neill, Technical Director of Anglo American, said the miner looked forward to developing and implementing innovative technologies over the coming years in tandem with First Mode.
“This work supports our trajectory towards our carbon and energy targets for 2030 and, ultimately, our vision of carbon-neutral mining,” he said.
Chris Voorhees, President and Chief Engineer of First Mode, said: “Mining produces the resources needed for a cleaner, more sustainable planet. Development of the world’s largest hydrogen-powered mine truck is an important step in making the natural resources sector carbon-neutral from start-to-finish.”
Rhae Adams, VP of Business Development at First Mode, meanwhile, said Anglo was the “perfect partner” to help fulfil the company’s vision of a future based on renewable energy.
Back in October, First Mode confirmed it had been selected by NASA to develop a pioneering lunar mission concept with Arizona State University (ASU), to be funded through NASA’s Planetary Mission Concept Study program. The mission, called Intrepid, would develop and deploy the Intrepid rover to traverse the furthest distance of any rover in NASA’s history, examining the geology of the lunar surface over an area of some 1,800 km.
Nel Hydrogen Electrolyser AS, a subsidiary of Nel ASA, is to deliver a 3.5 MW electrolyser to ENGIE as part of a project to deliver the world’s largest fuel cell haul truck for Anglo American.
The electrolyser, which splits water into hydrogen and oxygen using electrical energy, is scheduled to be installed during 2020, fitting in with Anglo American’s plan to complete “first motion” of the haul truck next year.
Henning Langås, Sales Director of Nel Hydrogen Electrolysers, said: “We are of course delighted that ENGIE has chosen our electrolyser to integrate the renewable hydrogen solution, which will fuel the truck. When scaled up, more than 100 MW of electrolyser capacity will be needed for this mine alone, representing an attractive new market opportunity.”
The ENGIE-Anglo American project involves retrofitting a mining haul truck operating at Anglo American’s Mogalakwena platinum group mine (pictured), in South Africa, to become a 100% zero-emission fuel cell electric truck, Nel said.
“Electricity for hydrogen production will partly come from local solar power and the grid, and the electrolyser capacity surpasses the daily demand of the truck, enabling storage for fuelling during night time or moments when solar radiation is poor, maximising the renewable share of the hydrogen,” it said.
“If successful, the long-term target is to convert the entire fleet of haul trucks at the mine to hydrogen, as well as at Anglo American’s other mining operations around the world.”
Plug Power Inc is to provide a custom refuelling system for the world’s largest hydrogen-powered mine haul truck, set to begin operating next year as part of a project between Anglo American and ENGIE.
Plug Power, a leading provider of hydrogen engines and fuelling solutions enabling e-mobility, was selected by ENGIE following the signing of a global partnership agreement between the two announced in September.
To support the refuelling project, Plug Power has been tasked with building a full compression, storage, and dispensing system to service the new hydrogen-powered vehicle. Plug Power’s system will be the first of its kind, and the largest refuelling system built by the company to-date, with an expected output of 1,000 kg/d, it said.
Andy Marsh, CEO of Plug Power, said: “The incredible scope of this project reaffirms not only Plug Power’s commitment to facilitating the global adoption of hydrogen as a clean energy source, but also our position as the world leader in hydrogen refuelling.
“Our partnership with ENGIE is opening the door to exciting new opportunities outside of both the US, and the material handling market, where we have continuously demonstrated our expertise.”
While cybersecurity is today considered a major threat to all industrial companies, a recent report out of Australia has concluded it will take a catastrophic event for it to be taken seriously in the mining industry.
Through interviews, survey and analysis of Australia’s largest mining and service companies, including BHP, Rio Tinto, South32, and Anglo American, the ‘State of Play: Cyber Security Report’, from researchers at State of Play, has uncovered that 98% of top-level executives think a catastrophic event is required to drive an industry response to cybersecurity in mining.
This is despite State of Play Chairman and Co-founder, Graeme Stanway, saying the risk of cybersecurity failures in mining could be severe.
“In an increasingly automated and interconnected world, the risk of rogue systems and equipment is growing rapidly,” he says.
“If someone hacks into a mining system, they can potentially take remote control of operational equipment. That’s the level of risk that we are facing.”
Global Head of Cybersecurity at BHP, Thomas Leen, agreed and said the mining industry is up against archaic processes when it comes to evolving on the cybersecurity front.
“Mining as an industry has a low level of cybersecurity maturity, mainly due to legacy environments that lack basic capabilities,” he says.
The report went on to find that the second most likely driver to instigate change, after a catastrophic event, will be government led initiatives and responses.
Michelle Price, CEO of independent, not-for-profit organisation, AustCyber, believes public-private partnership is the key to driving change in the way the mining industry approaches cybersecurity.
“AustCyber has collaborated with METS Ignited and State of Play to conduct this survey as we see the potential to improve cybersecurity across the mining environment,” she says.
“There are several challenges specific to the mining sector as documented in the Australian Cyber Security Industry Roadmap, developed in conjunction with CSIRO – such as operational technology, connected equipment and sensors, availability of data, anomaly detection and the volatility of markets.
“There are plenty of growth opportunities – especially when the sector collaborates with organisations like AustCyber to have a coordinated voice on the kind of support it needs to push forward cyber resilience.”
South32 Head of Cybersecurity, Clayton Brazil, sees this collaboration as a strength of cybersecurity in the mining industry. “Cybersecurity is incredibly collaborative in mining, we know it’s a critical industry for our nation and we all want to be safer,” he says.
Brazil sees a strong cybersecurity capability as a strategic opportunity for South32. “Done properly, cybersecurity can be a competitive advantage for us,” he said.
Interestingly, when asked what is the most likely motivation for cyber attacks, 50% of responses identified extortion and theft as the most likely cause, followed by competition with 21% and politics with 19%.
METS Ignited CEO, Adrian Beer, says industry growth and sustainability will come from collaboration and the implementation of standards. “Mining operations are still made up of legacy closed systems that have customised integrations between them,” he says.
“However, the modern technology vendor community is trying to overcome these systems with new models; building collaboration and trust between mining and the technology sector will create a secure sustainable future.”
Beer also believes standards have a two-prong role to play. “There is clearly a need for both a strong set of standards to define what good looks like in terms of cybersecurity more broadly, and a set of industry standards to ensure that the specific needs are met to deliver those secure outcomes.”
Mastermyne Group has had its Moranbah Region Umbrella contract with Anglo American’s Metallurgical Coal division renewed for a three-year term, it said.
The contract extends the existing contract at Moranbah North and Grosvenor mines, in Queensland, Australia, and commences from November 15.
Mastermyne said the pact includes an option to extend for an additional two years at Anglo American’s discretion, with work under this contract estimated to contribute revenues of around A$250-$300 million ($170-204 million) over the three-year term.
The scope of work includes design, supply and installation, recovery and maintenance of ventilation structures and devices; installation of secondary support; outbye support and maintenance activities; conveyor belt installations and recovery; and development services.
Moranbah North is an underground longwall coking coal mine that began operating in 1998, while Grosvenor, also a longwall coking coal mine, produced its first longwall coal in May 2016.
Mastermyne said the revenue and earnings from the contract extension have been included in the company’s current 2020 financial year guidance.
Mastermyne CEO, Tony Caruso, said: “The company is very pleased to see the continuation of this long-term relationship, built with Anglo American over the past 17 years. Moranbah North and Grosvenor mines supply high-grade metallurgical coal to the international market for steel production, and we are pleased to support their successful operation.”
The coarse particle flotation technology being explored as part of Anglo American’s FutureSmart Mining™ platform is gaining traction after the company announced it was to carry out a prefeasibility study on applying it at the Minas-Rio iron ore mine, in Brazil.
During the seminar, Anglo said the application of coarse particle flotation technology could see 20% of feed rejected as silica sand, improving the product quality and consistency at Minas-Rio. It also said it could potentially provide a circa-$500 million net present value uplift at the operation, on top of a 15% water saving and 20-30% mill energy reduction.
The coarse particle flotation technology is expected to play a key role in the company’s aim to ultimately eliminate tailings dams, according to Anglo American Technical Director, Tony O’Neill.
It should allow the company to coarsen grind size while maintaining recoveries – thereby reducing the energy required to grind ore, as well as reducing water intensity by more than 20%. When combined with dry-disposal technology, the company is targeting a reduction in water intensity of more than 50%.
The company previously said it was set for trials of the technology at its Amplats operations in 2020.
The flowsheet at Minas-Rio currently includes crushing, screening, milling, desliming, grinding and flotation, with 38% Fe grade ore upgraded to a 67% Fe pellet feed product.
Seven leading mining and metals companies have partnered with the World Economic Forum (WEF) to experiment, design and deploy blockchain solutions that will accelerate responsible sourcing and sustainability practices, the WEF reports.
The Mining and Metals Blockchain Initiative will pool resources and cost, increase speed-to-market and improve industry-wide trust that cannot be achieved by acting individually, according to the forum.
“It aims to be a neutral enabler for the industry, addressing the lack of standardisation and improving efficiency,” WEF said, adding that the intention was to send out a signal of inclusivity and collaboration across the industry.
Among the seven companies represented in this initiative are Antofagasta Minerals, Eurasian Resources Group, Glencore, Tata Steel Limited, De Beers and Anglo American.
The group will look to develop joint proof-of-concepts for an inclusive blockchain platform, which, over time, could help the industry collectively increase “transparency, efficiency or improve reporting of carbon emissions”, it said.
The WEF explained: “In many cases, blockchain projects to support responsible sourcing have been bilateral. The result has been a fractured system that leaves behind parts of the ecosystem and lacks interoperability.”
The new initiative is owned and driven by the industry, for the industry, according to the WEF, with members examining issues related to governance, developing case studies and establishing a working group. Key areas of collaboration and development could include carbon emissions tracking and supply chain transparency.
“They will work to use blockchain technology to increase trust between upstream and downstream partners, to address the lack of industry standardisation and to track provenance, chain of custody and production methods,” it said.
Jörgen Sandström, Head of the Mining and Metals Industry at the WEF, said material value chains are undergoing profound change and disruption. “The industry needs to respond to the increasing demands of minerals and materials while responding to increasing demands by consumers, shareholders and regulators for a higher degree of sustainability and traceability of the products.”
The WEF has offered its platform and expertise to help industry leaders better understand the impact and potential of blockchain technology, it said. “It will provide guidance on governance issues related to the delivery of a neutral industry platform and the expansion of members.”
The move was welcomed by industry partners, including Ivan Arriagada, CEO of Antofagasta Minerals: “We hope this collaboration and pilot will give us practical examples of how blockchain can increase efficiency of the supply chain management and improve interoperability; address certain supply chain management risks such as transparency and consumer trust; and unlock opportunities including integration of key data such on environmental impact such carbon emissions.”
Benedikt Sobotka, CEO of Eurasian Resources Group, meanwhile, said the collaboration around blockchain technology would help industry efforts to enhance responsible sourcing. “By working together, our goal is to develop solutions that can be adopted across the industry and value chain,” he added.
Ivan Glasenberg, CEO of Glencore, said the development of this technology can facilitate industry reporting to improve compliance across the supply chain.
TV Narendran, CEO of Tata Steel, said: “As a responsible player in the mining and metals industry, we are committed to build a sustainable future.”
Jim Duffy, CEO of Tracr (representing Anglo American/De Beers), said the company looked forward to collaborating with the consortium as Tracr begins to roll-out its connected supply chain platform for the diamond industry. “Lessons learned creating Tracr are highly relevant to the sustainable sourcing of all mining and metals,” he added.