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FLSmidth looks for sustainable gains with thyssenkrupp mining buy

The subtleties behind FLSmidth’s acquisition of thyssenkrupp’s mining business appear to have got lost within the financial community.

The company’s Denmark-listed shares, since announcing the transaction in late July, lost 16% of their value to August 20.

This downward move is hardly surprising when focusing on pure financials: FLSmidth is looking to acquire a company for an enterprise value of $325 million that is only expected to return to profitability two years after financial close.

Yet, this narrow train of thought discounts the well-timed strategy behind the move.

A combination of the two companies will undoubtedly create a leading global mining technology provider with operations from pit to plant. It will also see FLSmidth re-geared towards a mining sector on the up at a time when the cement business it serves is exhibiting flattish demand.

While this won’t be lost on analysts, most of them will only be able to factor in short-term profitability projections into their financial models, meaning, as far as they’re concerned, FLSmidth will be weighed down by the transaction until 2024.

Yet, for FLSmidth and mining, 2024 is practically ‘just around the corner’.

In FLSmidth’s recently released June quarter results it registered an order backlog of DKK16.7 billion ($2.6 billion), the majority of which was associated with mining orders. Of the backlog amount attributable to the mining sector, 16% would not be realised until 2023 and beyond.

This could mean many of the orders FLSmidth registered in the most recent June quarter will only be realised (read: delivered) in 2024, the year thyssenkrupp’s mining business is expected to be back in the black.

This is just one of the subtleties that may have got lost by shareholders fixated on the short term.

The second is how the transaction sets the company up as a mining sustainability leader at a time when the industry is calling out for one.

At the top end of the mining industry, the ability to decarbonise operations is becoming as – if not more – important as returning cash to shareholders. Every tonne of copper extracted and processed, and every ounce of gold mined and refined is likely to come with an associated carbon content/price in future years. The battery materials supply chain tied to the likes of lithium, cobalt and nickel will come under even more scrutiny.

Blockchain-type traceability platforms will mean investors and any interested party can interrogate where the raw materials came from and how they were produced.

These same miners will also be judged on how they use water, with freshwater use being rationalised in many regions where such resources are scarce.

FLSmidth, should the acquisition complete next year, is arming itself to compete in this brave new sustainable world.

The company started this journey all the way back in November 2019 when it announced its MissionZero program at its Capital Markets Day in Copenhagen.

Central to MissionZero is FLSmidth’s focus on enabling its customers in cement and mining to move towards zero emissions operations in 2030.

The OEM planned to do this by leveraging the development of digital and innovative solutions tied to sustainable productivity, offering its customers in the mining sector the technological solutions to manage zero emissions mining processes by 2030 – with a specific focus on water management.

For the latter, dry-stack tailings was the order of the day, with FLSmidth’s EcoTails® solution expected to reduce water costs, tailings dam risks and minimise environmental footprint. The development of the largest filter press plate ever built, the 5 m x 3 m AFP, was a signal of just how confident FLSmidth was on this emerging market trend becoming fully embedded across the globe.

Digital products such as SAGwise™, SmartCyclone™, BulkExpert™ and Advanced Process Control would, in the meantime, allow miners to become that more efficient with every resource (water, energy, etc) they used, again, improving their sustainability credentials.

Close to two years after making the MissionZero declaration, Thomas Schulz, CEO of FLSmidth, says the company has been seeing the program’s effects come through in its order book.

“Actually, this has been translated in orders for a few years already,” he told IM.

“When we look into sustainability, we define it as making productivity improvements. If you don’t adopt these sustainability solutions, you effectively have to pay more to keep operating at the same levels, or you have to stop operating – there is a productivity element to it, and quite a big one.

“For us, as a lifecycle provider, it is important that we offer to our customers at any point in time and any point of our offering, the right solution to make more money. That can be with dry-stacked tailings, tailings management, IPCC (in-pit crushing and conveying) systems, electrification of the pit, reducing emissions or dust, etc.”

Many of these solutions will enable companies to produce the same amount of product, or more, with the same input costs and energy draw, according to Schulz.

Coping with further restrictions on the industry’s access to freshwater will require more than step-change initiatives, and that is why the company is working on how its equipment can use “different types of water” and technologies that use less freshwater to ensure operations can abide by incoming legislation.

The company has been working on providing these zero-emission and resource-efficient solutions since 2019 to enable its customers to become sustainable operators by 2030.

“For many people, that sounds very long,” Schulz said. “In the mining industry, it’s not.”

Factor in the two-to-three years to build a pilot plant to prove such technology, two-to-three years to get a full-scale plant approved and the associated construction time, and a decade has passed.
Sustainability represents the ‘long game’ for mining OEMs, and technology is the key to achieving that sustainability, Schulz said.

Which brings us back to the thyssenkrupp mining business acquisition.

One of the big pillars

FLSmidth, in adding thyssenkrupp mining to its portfolio, is providing a whole host of decarbonised options for its mining customers to consider in their own sustainability drive.

It is adding mine planning expertise to its portfolio, ensuring that the IPCC and continuous surface mining technologies it puts forward are optimised for the operation at hand. These technologies are further complemented by semi-continuous and mobile crushing options from thyssenkrupp mining, adapted to the pit profile at hand.

Heavy-duty overland conveyors from thyssenkrupp mining complement other bulk handling solutions FLSmidth might be providing at stockyards or ports to reduce truck haulage and shift the transport dynamic to ‘green’ grid power.

“The culture in project service companies is you are the hero if you come to the table with the next big project,” Thomas Schulz says. “In product service companies, you are the hero if you come with the next big profit”

Then, when it comes to comminution, a crushing (including primary jaw crushers) and screening portfolio, plus smaller milling options and expertise in high pressure grinding rolls (HPGRs) through the globally renowned Polysius business, is bolted onto FLSmidth’s own crushing and grinding (including vertical roll milling technology) portfolio. This puts the combined offering up there with any global OEM around, while also providing the potential ‘dry grinding’ technologies the industry has been on the lookout for.

All these solutions come with sustainability benefits that can be felt throughout the mining value chain.

They also provide options and flexibility to an industry that cannot just suddenly retire a fleet of ultra-class haul trucks at a deep open-pit operation in favour of a fixed IPCC solution, or build a new process plant fitted with HPGRs to replace a typical SAG and ball mill grinding circuit.

Schulz said as much to IM.

“One of the big pillars of the whole acquisition lies in sustainability,” he said. “Normally, the process plants where we play big are all electrified, so if the energy resource coming into these plants is a green one, the process is already sustainable.

“When we look into the pit, in-pit crushing and transporting of material is where we can focus a lot.

“I’m not saying you can replace every truck, but some of the surface mines and the ones underground can be made significantly more continuous and sustainable from a transport perspective.

“thyssenkrupp is leading in that. They are quite big in the pit; we are quite big in the processing plant. Both, together, are complementary.

“If we can integrate the offering – and we will do – and make it more sustainable, that is a big step towards the 2030 MissionZero target.”

This increased spread of solutions will also provide FLSmidth with more opportunities to refine the entire flowsheet, providing further sustainability benefits to its customers.

“When we design solutions, or offer replacement equipment or a new process, we can now rely on expanded competences to look at what the best overall system for the entire flowsheet is,” Schulz said. “For instance, if we change the gyratory on a mine site and then look into the pit, we know how to size the equipment in the pit and the concentrator upstream.”

This increasing flowsheet focus must be complemented by an aftermarket approach that ensures the process remains efficient and sustainable throughout a product’s, solution’s or mine’s lifetime.

This was one of the obvious disparities between the two companies when the announcement was made in late July. It is also one of the biggest opportunities that comes with the planned transaction, according to FLSmidth.

Whereas capital business represented 37% of mining revenue in 2020 for FLSmidth, it was 66% of revenue for thyssenkrupp’s mining business. Services represented 63% and 34% of the two businesses’ 2020 revenue total, respectively.

Schulz has seen such a contrast – and opportunity – before, referencing his arrival at FLSmidth in 2013.

“When I came here to FLSmidth, it was actually quite similar,” he said. “I was at Sandvik for 16 years where the aftermarket was actually seen as the most important. They realised the importance of the customer relationship: the capital equipment sales team may meet the customer for a few hours per year, but the service technician has that interaction over weeks and months in terms of aftermarket.”

He also recognises the cultural shift needed to capture many of the profitable aftermarket dollars that the company is forecasting with the planned acquisition.

“The culture in project service companies is you are the hero if you come to the table with the next big project,” he said. “In product service companies, you are the hero if you come with the next big profit.

“You need both – we need profit, and our customers need profit to invest, while you need the projects to spur these aftermarket opportunities.

“We calculated what the aftermarket potential of the thyssenkrupp mining business is and understood it was not covered as they were all looking for the next big project, which we understand.

“But this is not what we will accept in the future. We have to have a strong aftermarket and strong customer link.”

Which all comes back to MissionZero.

“If you focus on MissionZero, then you invest there where you can impact MissionZero. Wherever you have aftermarket, you impact MissionZero. Where you don’t have aftermarket, you don’t impact MissionZero.”

At the same time, Schulz is not losing sight of the company’s end goal with all the business it coordinates in the mining sector.

“Whatever we do with the customer, they have to be more efficient, more productive and make more money.”

It just so happens that in doing this, the mining sector will become that much more sustainable.

Rio Tinto and Schneider Electric partner on decarbonisation initiatives

Rio Tinto and Schneider Electric have signed a memorandum of understanding (MoU) for a “first-of-its-kind” collaboration to develop a circular and sustainable market ecosystem for both companies and their customers.

This multi-product partnership will see Schneider Electric use responsibly-sourced materials produced by Rio Tinto. These include low-carbon aluminium and copper produced with renewable power, iron ore and borates. Rio Tinto will, in turn, use energy and industrial services from Schneider Electric, as the companies work together to develop digital platforms, technologies and solutions to be deployed across the metals and mining supply chain to drive further decarbonisation, they said.

Rio Tinto Chief Commercial Officer, Alf Barrios, said: “This unique partnership will help accelerate decarbonisation and renewable energy solutions by combining low-carbon materials with cutting-edge digital technology. Working together will allow Rio Tinto and Schneider Electric to pursue opportunities beyond what is possible for either company on its own.

“This collaboration also opens doors to consider strategic initiatives such as expanding the use of artificial intelligence and predictive analytics to reduce downtime in our plants, digitisation of our supply chains, and a host of other transformative technologies.”

Schneider Electric Executive Vice-President Industrial Automation, Barbara Frei, said: “We are excited to work with Rio Tinto to develop clean and pioneering solutions to meet industrial decarbonisation challenges. As the world’s most sustainable corporation and a manufacturer with a global network of smart factories and smart distribution centres, Schneider Electric is on a mission to make industries of the future eco-efficient, agile, and resilient through open, software-centric industrial automation and sustainable energy solutions. This new partnership demonstrates that Rio Tinto is as passionate as we are about bridging progress and sustainability for all.”

The partnership will draw on Schneider Electric’s Energy as a Service expertise to evaluate the use of innovative solutions, including microgrids, to supply energy from low-carbon sources, and artificial intelligence and advanced analytics to help meet sustainability goals at Rio Tinto sites and throughout its supply chain.

Rio Tinto’s START traceability and transparency initiative, the first sustainability label for aluminium using blockchain technology, will be deployed with Schneider Electric to unlock value for customers, suppliers and partners, it said. The companies will work to expand this transparency, offering START in combination with Schneider Electric’s EcoStruxure™ platform, an IoT system architecture that connects everything in an enterprise to deliver enhanced safety, reliability, efficiency and sustainability.

The companies will also partner to evaluate emerging innovation opportunities, such as the efficient production of critical materials for renewable technologies and advances in low-carbon, green steel manufacturing, both of which will play a significant long-term role in industrial decarbonisation.

Nornickel backs responsible sourcing and production practices with blockchain agreement

Norilsk Nickel says it is joining the Responsible Sourcing Blockchain Network (RSBN), an industry collaboration among members across the minerals supply chain using blockchain technology to support responsible sourcing and production practices from mine to market.

The move to join RSBN comes after Nornickel announced a broad strategy to use sophisticated digital technologies to create a customer-centric supply chain, which would include metal-backed tokens on the global Atomyze platform, a tokenisation platform that represents physical assets in digital form. Both the Atomyze and RSBN platforms were developed by leveraging Hyperledger technology, with IBM’s participation, the PGM and base metal miner said.

With Nornickel joining the RSBN, a series of its supply chains will be audited annually against key responsible sourcing requirements by RCS Global. The audits cover each stage of the company’s vertically integrated operations from mines in Russia to refineries in Finland and Russia.

Once audited against responsible sourcing requirements, each supply chain will be brought on to the RSBN and an “immutable audit data” trail will be captured on the platform, proving responsible nickel and cobalt production, its maintenance and its ethical provenance.

“Integration with RSBN is yet another step for Nornickel towards achieving greater business sustainability by creating a permanent record of minerals on the blockchain,” the company said.

At a later development stage, data such as upstream carbon intensity and other ESG attributes will be tracked, it added.

Built on IBM Blockchain technology and powered by the Linux Foundation’s Hyperledger Fabric, the RSBN platform helps improve transparency in the mineral supply chain by providing a highly secure and immutable record that can be shared with specified members of the network, Nornickel says. Additionally, RCS Global Group assesses each participating entity both initially and annually against responsible sourcing requirements set by the Organization for Economic Cooperation and Development and those enshrined by key industry bodies, including the Responsible Minerals Initiative.

Anton Berlin, Nornickel’s Vice President, Sales and Distribution, said: “As one of the largest industry groups globally and the producer of the minerals essential for the transition to a carbon-free world, Nornickel is well aware of its responsibility to make the metals supply chains sustainable and highly transparent. We believe that the digital technologies of RSBN and Atomyze will create the path for Nornickel and its partners to participate in a circular value chain, tracing commodity flows in near real time as well as replacing cumbersome paperwork.”

RCS Global CEO, Dr Nicholas Garrett, added: “The RSBN has proven that responsible sourcing can be traced and documented using blockchain technology. Assuring Nornickel’s supply chains is another milestone engagement for RCS Global and Nornickel’s commitment to the RSBN and demonstrates momentum for blockchain backed responsible sourcing platform in the metals sector.”

Manish Chawla, Global Managing Director, Chemicals, Petroleum & Industrial Products, IBM, said: “Norilsk Nickel is an important addition to the Responsible Sourcing Blockchain Network and we look forward to their contributions to help advance the assurance for responsible sourcing and the group’s sustainability goals that have a direct impact on successful and accountable development for entire industries.”

RSBN is designed to be adopted across industries by original equipment manufacturers in automotive, electronics, aerospace and defence as well as their supply chain partners such as mining companies and battery manufacturers.

WEF’s MMBI makes progress on emissions traceability with blockchain proof of concept

The World Economic Forum’s Mining and Metals Blockchain Initiative (MMBI) has released a proof of concept that uses distributed ledger technology to track embedded greenhouse gas emissions.

A collaboration between seven leading industry players and the World Economic Forum, the initiative has hit an important stage of development following its launch in October 2019, the WEF said.

The successful completion of the proof of concept, named the COT, which is a Carbon Tracing Platform, will be critical in helping to ensure traceability of emissions from mine to the final product. With a focus on end-to-end traceability, the COT platform uses distributed ledger technology to track CO2 emissions.

The founding members of the MMBI – Anglo American, Antofagasta Minerals, Eurasian Resources Group, Glencore, Klöckner & Co, Minsur, and Tata Steel – joined forces in October 2019 to design and explore blockchain solutions to accelerate responsible sourcing in the industry. By pooling resources and costs, the mining and metals companies aim to accelerate future adoption of a solution for supply chain visibility and environmental, social and governance requirements.

Developed in collaboration with industry experts, supported by the Dutch blockchain champion Kryha and Consortium Advisor Susan Joseph, it not only tests the technological feasibility of the solution, but also explores the complexities of the supply chain dynamics and sets requirements for future data use, the WEF said. In doing so, the proof of concept responds to demands from stakeholders to create ‘mine to market’ visibility and accountability.

Jörgen Sandström, Head of Mining and Metals Industry, World Economic Forum, said: “There is an increasing demand for metals and minerals, and an increasing demand for sustainable and responsible and traceable supply chains. There is a potential to create a full value chain view with downstream visibility, and, in partnering with regulators and aligning our work with robust ESG standards, sustainability certification schemes and assurance frameworks.”

This work lays the foundation for the next phase of the development and reinforces comprehensive feedback sessions with stakeholders. It also supports the MMBI vision to enable emissions traceability throughout complex supply chains and to create ‘mine to market’ visibility and accountability, it said.

Nadia Hewett, Blockchain Project Lead, World Economic Forum, added: “The distributed nature of blockchain technology enables cross-enterprise collaboration and makes it the ultimate networked technology. This opens exciting new possibilities that organisations otherwise would not have the capability to deliver on their own.”

Peter Whitcutt, Marketing CEO of Anglo American, said: “By leveraging cross-industry collaboration and the increasingly important role played by technology innovation, MMBI’s Proof of Concept can help to unlock the potential of blockchain to support a greater level of reporting transparency and drive responsible sourcing.”

Minespider wins EIT Raw Materials funding for supply chain transparency app

Minespider, a blockchain protocol for responsible mineral tracking, has been awarded a grant of over €180,000 ($213,732) from the EIT Raw Materials Booster Programme.

The program aims to support start-ups and SMEs in creating innovative products and services that will positively impact the raw materials sector, according to Minespider.

The grant will help Minespider develop OreSource, a due diligence product that helps mines and smelters capture key information that importers in the European Union need to comply with EU Conflict Mineral Regulation. The regulation, which comes into force in January 2021, requires EU importers of 3TG (tin, tungsten, tantalum and gold) to perform due diligence to determine whether their material comes from a conflict affected or high-risk area.

Minespider Founder and CEO, Nathan Williams, said: “European importers need to have better access to data to operate in this new regulatory environment. They require certain data to be included with the materials they purchase.”

The OreSource product extends the capabilities of Minespider’s open, public blockchain protocol, which allows companies to track their raw material shipments, demonstrating where the materials come from and the conditions under which they were produced, the company says. This blockchain creates digital certificates that separate data into three different layers, depending on whether the data should be publicly visible, transparent between members of the same supply chain, or private between a company and their customer.

“This allows their clients, including Volkswagen and Google, to share sensitive transparency information with their customers and other supply chain participants securely,” Minespider says.

The OreSource app allows mines and smelters to provide information to distinguish their products from the rest of the market. Mines and smelters who use the app upload key data such as bills of lading, invoices, company policies, and third-party certifications, which are assembled into a digital certificate and linked along the supply chain.

By affixing a QR code to a mineral shipment, or on an invoice, the recipients of the materials have all the data they need to ensure their compliance with the EU regulation, secured on Minespider’s public blockchain protocol, the company claims.

Williams continued: “Responsible producers are often at a disadvantage in the global market. OreSource is a solid first step toward making responsibly sourced material the norm instead of the exception.”

Companies importing material into Europe benefit from this information, as they have all they need to conduct due diligence. “This means they can view transport routes, analyse production site responsibility, and demonstrate a chain of custody for their raw materials,” Minespider says.

OreSource will also offer analytical tools that allow material importers to identify potential conflict areas and other red flags, the company says, enabling them to ask further questions when needed and ensure all of their imports have been sourced responsibly.

Williams concluded: “The EU and other government agencies are spearheading a new global era of sustainable sourcing. OreSource will support these efforts by ensuring that key data from mineral producers is captured in a transparent manner, and communicated along the supply chain. We are moving away from a world of anonymous commodities, to one of trusted products.”

Vale leverages Contour platform for first iron ore blockchain trade

Vale says it has completed its first sale of iron ore using blockchain technology with Nanjing Iron & Steel Group International Trade Co Ltd, a subsidiary of Nanjing Iron and Steel Co Ltd (NISCO).

The transaction, for a cargo of 176,000 t of Brazilian Blend Fines from Teluk Rubiah Maritime Terminal, in Malaysia, to China, is aligned with Vale’s strategy of becoming a more “innovative and customer-centred company” through greater integration with clients and partnering for the development of new solutions, it said.

“It is an important milestone towards the digitalisation of the sales and trade process, bringing innovation to the traditional paper-intensive trade transactions and offering a better service to the clients as well as predictability in the steel value chain,” Vale said.

The Letter of Credit was issued through the Contour blockchain platform while the shipping documents and the electronic Bill of Lading were handled via essDOCS’ CargoDocs solution – with all actions carried out through a single, interfaced platform consolidated in Contour. The transaction also had support from DBS Bank Ltd and Standard Chartered Bank Malaysia Berhad.

“The integrated transaction enabled end-to-end security and transparency with real-time visibility of the documentation to all stakeholders, drastically reducing the amount of emails and paperwork exchanged among the parties and providing enhanced user experience through access to a single solution to execute the trade,” Vale said.

MineHub adds BHP, China Baowu to blockchain-based supply chain platform

BHP and China Baowu have completed their first iron ore trade on MineHub Technologies’ blockchain-based platform, according to the Vancouver-based digital supply chain company.

This is the first of a series of transactions with various industry partners, guiding the next evolution of functionality on the MineHub platform that will ultimately provide commodity supply chains with a fully digital end-to-end fulfilment process, MineHub said. “It also reflects MineHub’s development approach – hands-on collaboration and continuous validation with industry – to ensure that the platform delivers on the value and user experience expectations.”

The MineHub platform is built on the IBM Blockchain platform using the open-source Hyperledger Fabric standards. MineHub allows its customers to benefit from several innovations, according to the company, with the parties involved in selling, buying, delivering and paying for a cargo of minerals now able to collaborate securely in real-time, “working in an integrated cross-company workflow, sharing electronic information rather than couriering or emailing paper documents that are subject to interception, fraud and cyber threats”, MineHub said.

Arnoud Star Busmann, CEO of MineHub, said working with the world’s biggest miner and one of the world’s largest steel producers on “designing the digital future of critical supply chains” like iron ore is incredibly exciting.

“This series of transactions, each focusing on different aspects of the post-trade process, will allow MineHub to incrementally expand the platform’s functionality and scalability into the iron ore and other mineral commodity markets, incorporating real-life user experience,” he added.

MineHub is also developing and validating digital solutions in complementary settings and in collaboration with other industry partners, it said, adding that work was underway, for instance, in base metals concentrates, structured finance and emissions tracking.

Star Busmann continued: “We will incorporate these learnings into the next MineHub release, planned for Q4 (December quarter) 2020, which will start to provide a solution to the increasingly urgent need for industry-wide digitalisation, by boosting both safety, transparency and resilience of critical supply chains. Especially as current pandemic events and fraud cases in the commodity trading industry are causing a step change in the adoption of digital solutions.”

MineHub says its blockchain-based platform helps the parties in a mineral transaction to virtually integrate their trade operations processes like contracting, logistics, specifications and financing services. This streamlines communication channels and also provides the transaction participants with security and certainty via a reliable, real-time single source of truth.

“The underlying blockchain technology ensures that each party can control the privacy, integrity and geographical residence of their data, whilst allowing trading and financing partners to use or verify the integrity of shared information,” MineHub says.

Minespider looks to scale blockchain platform following fundraising

Minespider says it has raised a total of €2.8 million ($3.05 million) to continue developing its open blockchain protocol for supply chain tracking.

The money came from combined sources, including the EU Commission’s H2020’s SME Instrument Phase 2 program.

Minespider Founder and CEO, Nathan Williams, called the successful fundraising “an immense step forward” for the company and its “vision of a future where supply chains are transparent and sustainable”.

Minespider is an open blockchain protocol founded in 2018. As a team of 10, Minespider is based in Berlin, Germany, with operations in both Switzerland and Brazil. Its platform allows companies to create digital passports for their raw materials that keep track of where the materials come from and the conditions under which they were produced. The passports contain data that allows companies to verify that the materials they receive were produced in environmentally and socially sustainable ways, according to Minespider.

“Minespider passports separate data into three different layers, depending on whether the data should be publicly visible, visible to members of the same supply chain, or private between a company and their customer,” the company explained. “This allows companies to share sensitive transparency information with their customers and others further down the supply chain securely.”

Minespider makes this possible without a single trusted company running the system, using an advanced encryption system. This means that companies using Minespider retain total control over their own data.

Since its founding, Minespider has launched several traceability projects with industry players.

In 2018, Minespider partnered with Google to create a multi-stakeholder end-to-end mineral traceability consortium for the tin supply chain. The project formally commenced in 2019, with the addition of Cisco, SGS, Volkswagen, and Peru mining company Minsur (pictured at the San Rafael tin mine here), and has successfully tracked tin end-to-end and is now planning to incorporate new members.

In spring 2019, Minespider announced a joint project with Volkswagen to track its lead battery supply chain. This ongoing circular economy project involves two-thirds of the company’s global lead supply, according to the company. “Volkswagen intends this as a first step to employ blockchain technology for additional raw materials and supply chains,” the company said.

Williams added: “It has been an amazing experience to bring together so many industry leaders to work together on traceability. Now, with the backing of the European Commission and our investors we can scale the platform, bringing on many more participants who believe in the vision of transparent and responsible products.”

Part of funding came from the Horizon 2020 programme, where the European Commission selects potentially disruptive businesses to invest in and support as part of the SME Instrument. Minespider says it was chosen as a highly innovative SME and awarded ‘Very Good to Excellent (4.5 – 5)’ for all three key assessment criteria.

Williams said: “This funding shows how ready the EU Commission is to invest in these emerging and future technologies.”

MineHub adds commodity trade finance expert to blockchain platform

MineHub has added London-based asset management company Kimura Capital to its growing consortium of industry participants.

The news comes just a few weeks after the technology platform to improve efficiency in trading operations and environmental and social governance (ESG) compliance in mining and metals supply chains confirmed it was ready for its first blockchain customers.

Kimura, a specialist in commodity trade finance with expertise in financing complex logistical operations, is a member of the Alternative Investment Management Association.

“Kimura’s experience in finance will provide another important source of financial liquidity within the mining and metals ecosystem,” MineHub said. “The partnership with MineHub will be instrumental in driving the innovation within the industry.”

The company continued: “With financial institutions adapting to a changing regulatory environment, the provision of alternative finance plays an increasingly important role in facilitating the availability of credit, not just for trade finance, but also project and institutional finance. Improving access to capital is therefore a core part of the MineHub value proposition and a key area of focus is on enabling an integrated mix of institutional and alternative finance actors to provide new financing structures.”

MineHub has been working on this technology platform in collaboration with IBM and leaders across the mining supply chain including ING Group, Wheaton Precious Metals, Ocean Partners USA, Kutcho Copper, Capstone Mining and White & Case LLP. It went live earlier this month, with the company saying initial usage and transactions with consortium members was anticipated to commence within the next few weeks.

Arnoud Star Busmann, CEO of MineHub, said having Kimura on board as a consortium member is very strategic for MineHub.

“Offering optionality in financing sources is core to our strategy and Kimura is a clear leader in this sector, both in size and diversity, as well as their commitment to innovation, technology and sustainability.”

He added: “Working with Kimura and their peers, in conjunction with commercial banks and other financial institutions, MineHub will improve the working capital options and costs for miners, traders and other users. Our solutions will serve both large corporates and SMEs within the market, whilst contributing to responsible supply chains by linking risk pricing to ESG profiles of minerals.”

Kristofer Tremaine, CEO and Founder of Kimura Capital, said digitisation is the future for the market.

“Kimura has developed its business by selecting best-in-class partners in order to strengthen its overall offering. We are delighted to begin a partnership with MineHub whom have outstanding potential and represent Kimura’s first cooperation in the digitisation of commodity trade flows.”

MineHub added: “Digitalisation, transparency and automation will help reduce operational and fraud risks, thereby lowering the barriers to entry for alternative financing sources. Increased operational efficiencies and automation of ESG compliance will enable alternative financing houses to serve more clients without increasing operations and overheads.”

Metal and mining companies collaborate with WEF on blockchain solutions

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.