Tag Archives: Blockchain

MineHub adds commodity trade finance expert to blockchain platform

Environmental, IoT, Mining finance, Mining services, Sustainable mining, , , , , ,

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

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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.

MineHub Platform ready for first blockchain transactions

Automation, Environmental, IoT, Mining finance, Mining services, Mining software, Sustainable mining, , , , , ,

MineHub Technologies says it has completed development of its technology platform to improve efficiency in trading operations and environmental and social governance (ESG) compliance in mining and metals supply chains.

The company has been working on this project 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.

The MineHub Platform is now live, with initial usage and transactions with consortium members anticipated to commence within the next few weeks as well as the addition of new industry participants to the platform.

“MineHub’s first release offers comprehensive functionality that enables miners to capture mineral production and digital contracts with buyers, streamline the post-trade operations (including document flow), financing and logistics,” MineHub said.

The platform is aimed at a wide variety of company types and sizes including SME and large corporate miners, trading houses, financial institutions, alternative financiers, streamers, logistics companies and assayers, the company said. It can provide benefits across industry verticals including mineral concentrates, bulk metal and fertiliser, according to MineHub.

The company continued: “The $1.8 trillion global mining and metals market has traditionally suffered from inefficiencies due to manual, paper-based processes and a lack of transparency among supply chain participants. By digitising the supply chain, increasing levels of automation and providing greater traceability, MineHub Platform users are expected to be able to streamline their operations, improve profit margins and contribute to sustainable supply chains and responsible sourcing.”

Arnoud Star Busmann, CEO of MineHub, said delivering the MineHub platform on schedule would not have been possible without the support from all its partners and IBM.

“We are excited about having the first trades going through the platform in the coming weeks and from there start demonstrating the benefits of the solution, in particular the cost savings from streamlining operations, improving access to finance and enabling mineral provenance.”

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.

By providing an immutable record of transactions, MineHub is already helping its members streamline operations, improve key process efficiencies, and bring a new level of trust and transparency, according to Manish Chawla, General Managing Director, IBM Energy & Natural Resources.

“We anticipate considerable reduction in disputes on assays and logistics events by automating the capture of mineral provenance data,” he said. “This is an exciting advancement that will pave the way for traceability reporting as well.”

MineHub is expected to lead to transformative efficiencies, the company says, by:

  • Streamlining operations, automating coordination and bringing trust and transparency to the process;
  • Minimising the risk of document loss or delays;
  •  Integrating the banks and lenders more directly with their customers’ operations;
  • Helping to standardise, structure and digitalise marketing and trading administration, including contracts, trade confirmations, assays, letters of credit, logistics and shipping documents;
  • Reducing disputes on assays and logistics events;
  • Increased security through strong authentication of users and document origination, and reducing opportunities for bad actors;
  • Automating reporting for treasury, lenders, royalty-holders and streamers, with real-time visibility of the production output and receivables; and
  • Automating the capture of mineral provenance data, paving the way for traceability reporting and improving ESG compliance.

Finboot and Minexx collaborate to improve mineral supply chain transparency

Communications in mining, Mining industry recognition, Mining services, Sustainable mining, , , , , , , ,

Finboot has partnered with UK-based startup Minexx to help certify mineral production and tokenise credentials for improved transparency across the supply chain.

The announcement will see Finboot’s enterprise-grade SaaS platform, MARCO, combine with Minexx’s MineSmart mineral sourcing platform.

Finboot said: “With demand for electronics and electric cars constantly increasing, technology companies are coming under growing pressure to prove to consumers and regulators that the metals they use in these products are ethically and responsibly sourced.”

The company said a significant proportion of the world’s supply of cobalt and tantalum, both used in smartphones, for example, is produced by artisanal miners in African countries such as the Democratic Republic of Congo, Zambia and Mozambique, where regulations can be “lax or non-existent”.

“Origin data from the mine site passes through seven stages from mine to manufacturer and can be changed along this journey, damaging its credibility,” Finboot said. “This is particularly problematic for EU and US companies, which are subject to legal requirements for traceability and responsible sourcing.”

Minexx’s MineSmart platform aims to address this issue by giving technology companies transparency on the mineral origin to avoid funding conflict or child labour, while also giving them the control to make contracts with the miners directly. “In turn, the miners benefit from a fair price for their minerals and access to mining equipment and life-changing services, such as electricity and insurance,” Finboot said.

Finboot’s MARCO platform, meanwhile, delivers blockchain capability within value and supply chains across the globe.

“By integrating this into its MineSmart platform, Minexx is now able to certify mineral production and tokenise the credentials, allowing these to be sent across the digital value chain to bring trust to the process,” Finboot said.

Nish Kotecha, Chairman and Co-Founder of Finboot, said: “The ability to verify products’ credentials and communicate these in an auditable, immutable and trusted way is blockchain’s core strength, and our innovative middleware solution MARCO can deliver these capabilities to the Minexx MineSmart platform.”

Marcus Scaramanga, CEO and Founder of Minexx, said: “Approximately one in eight people in sub-Saharan African countries is dependent upon artisanal mining, yet the industry is poorly regulated and often lacks transparency and fairness.

“By integrating Finboot’s MARCO technology into our MineSmart platform, we can now harness the power of blockchain to track and record mineral origin data securely. This mutually benefits both the artisanal miners who produce the materials and the technology companies that require them, and consequently we see a huge amount of growth potential in this market.”

Volkswagen signs up blockchain specialist Minespider to track lead supply

Base metals, Mining industry recognition, Mining services, Mining software, , , , , ,

Beginning in April, Minespider says it is to partner with Volkswagen in an initial pilot focusing on tracking the carmaker’s lead supply, working with suppliers and sub-suppliers accounting for more than two-thirds of the group’s total lead starter battery requirements.

Volkswagen’s ultimate aim, according to the blockchain specialist, is to ensure all of its raw materials are sourced in a socially and environmentally sound manner.

“In the automotive sector, like in many other industries, supply chain transparency is a major issue, and to ensure sustainable mobility, responsible procurement is essential,” Minespider said. “Minespider and Volkswagen are working together to make procurement both more transparent and secure. Blockchain allows participants to trace the supply chain from the point of origin to the factory.”

Marco Philippi, Head of Strategy for Volkswagen Group Procurement, said sustainability in the supply chain is one of the company’s top priorities. “We see blockchain technology as part of the solution to ensure compliance with environmental and social standards along the entire supply chain,” he said.

Minespider is an open source, public blockchain protocol that offers stakeholders the opportunity to track the origin of their raw materials and present a complete chain of custody from certified mine to end manufacturer, according to the company. It was originally founded to address increasing global conflict mineral legislation, including the Dodd-Frank Act Section 1502 and the EU’s Conflict Minerals Regulation, which require companies to know who is supplying their gold, tin, tantalum, and tungsten.

“With industry interest turning toward increased transparency, the Minespider team are also launching initiatives into other key materials,” the company said. “The public protocol approach is a departure from previous supply chain tracking initiatives that used private, permissioned blockchains. This avoids the risk of a large player with a private blockchain creating a monopoly on the global mineral supply chain. By using a token-driven design, they provide the mechanism for decentralising protocol governance.”

Minespider’s Founder, Nathan Williams (pictured), said: “Ultimately, we would like to see an industry-wide transformation, a public protocol that any responsible supplier can join.”

Minespider’s protocol uses nested encryption to ensure a company’s data remains private on a public blockchain, it says. Digital “certificates” are created at certified mineral sources, such as mines or recyclers, which are then encrypted with the company’s public key and posted in a publicly accessible database.

As mineral shipments are sold, responsibility data of the new owner is added to the certificate which is re-encrypted with the public key of the new owner, creating a layered encryption like a “Russian doll”, Minespider says. “This ensures that only the owner is able to access the supply chain data, even though it is in a verifiable, immutable public data store, enabling supply chain transparency without sacrificing data security.”

Miners need to spell out future value drivers to survive, Deloitte says

Automation, Environmental, High tech minerals, Mineral commodities, Mineral project development, Mining services, Mining software, Mining techniques, Power supply for mines, Sustainable mining, Water management, , , , , , , , , , , ,

In Deloitte’s Tracking the Trends 2019 report, the company has urged mining companies to clarify how they plan to drive value into the future how they intend to respond when prices inevitably drop again.

The report highlighted disruption and volatility as two key issues the mining sector is facing that made long-term planning and decision making more important.

“In this new world order, miners must go beyond communicating the value that they currently bring to communities and will need to articulate what they stand for by developing differentiated business models designed to drive long-term value,” Deloitte said in the report.

Deloitte’s ten trends to watch for 2019 included:

  • Rethinking mining strategy;
  • The frontier of analytics and artificial intelligence;
  • Managing risk in the digital era;
  • Digitising the supply chain;
  • Driving sustainable shared social outcomes;
  • Exploring the water-energy nexus;
  • Decoding capital projects;
  • Reimagining work, workers, and the workplace;
  • Operationalising diversity and inclusion programmes, and;
  • Demanding provenance.

On rethinking mining strategy, Deloitte said: “Mining companies have typically anchored their strategic planning on producing the highest volumes of ore at the lowest possible cost. However, in today’s environment, companies must take an ever-expanding range of issues into account when setting corporate strategy.

“Consumers, governments, and communities are becoming more vocal and irrevocably altering industry dynamics. As a result, corporate social responsibility initiatives are now morphing into stakeholder engagement programmes, and social license to operate is becoming a pivotal strategic issue that will either differentiate mining companies or derail them.

“Looking at these factors alone – consumer awareness, social license to operate, geographic risk, and access to input commodities – it becomes clear that mining companies must take an ever-expanding range of issues into account when setting corporate strategy if they hope to create competitive portfolios robust enough to generate value across multiple scenarios. This is especially critical as the industry shifts into a new stage of growth.”

On the frontier of analytics and artificial intelligence, Deloitte said: “Although mining companies are exploring and investing in analytics and AI, there is still a long way to go. Three horizons in AI are emerging and, to date, most organisations are working in Horizon One, where machine intelligence requires human assistance and interpretation.

“To move up the analytics maturity curve into Horizons Two and Three, organisations must answer progressively complex questions. The first is ‘what happened?’ The second is ‘why did those things happen?’, this allows organisations to identify the root causes.

“Only with this foundation in place can organisations answer the third question: “what will happen?” This is the key that empowers organisations to predict variability, mitigate emerging risks, and manage stakeholder expectations.”

On managing risk in the digital era, Deloitte said: “The current risk landscape is characterised by a host of issues such as mounting tariffs and sanctions, potential trade wars, cyber threats, uncertain tax and royalty regimes, rising input costs, heightened scrutiny from the investment community, environmental disasters, and infrastructure breakdowns.

“To stem this tide, mining companies must take their cue from organisations that take a more holistic view of risk. Increasingly, these leaders are moving towards the next generation of internal audit, Internal Audit 3.0.

“This approach should help mining companies address risk at an enterprise-wide level, rather than assessing isolated risks at the functional or mine site level and develop appropriate controls to both mitigate and manage the expanding array of risks they face.”

On digitising the supply chain, Deloitte said: “The mining supply chain is ripe for transformation, as supply chain improvements remain incremental instead of delivering innovations designed to optimise mining operations.

“To create a more interconnected and responsive supply chain, mining companies need to stop thinking in linear terms and imagine instead a circular system that we call the digital supply network.

“The ultimate goal is to leverage advanced algorithms, AI, and machine learning to turn data into insights that allow companies to reduce their capital expenditures, respond to changing project requirements quickly, and optimise mine planning to integrate real-time changes.”

On driving sustainable shared social outcomes, Deloitte said: “Until recently, mining companies’ social spend has been seen as a cost of compliance, rather than a way to deliver measurable and sustainable benefits to host countries and communities. If mining companies hope to drive different social outcomes, that dynamic has to change. A social enterprise is an organisation whose mission combines revenue growth and profit making with the need to respect and support its environment and stakeholder network.

“Finding value beyond compliance is no easy task. It requires miners to listen more closely to their constituents to determine what stakeholders truly want, and then to shift their operational processes in response.

“To deliver on the social breadth of these programmes, mining companies cannot work in isolation. Instead, they should look for opportunities to collaborate with other companies working in the region.”

On exploring the water-energy nexus, Deloitte said: “True value from energy management can only be derived by addressing the triple bottom line of social, environmental, and financial performance. This requires companies to approach energy management as an integrated corporate initiative.

“Yet energy isn’t the only input at risk. Mining companies must now contend with water scarcity as well as risks associated with excess rainfall, which can result in flooding.

“With a constant knowledge of how every drop of water is being used, and an understanding of all the parameters associated with its use, mining companies can manage water in the way they have begun to manage electricity, as a valuable resource.”

On decoding capital projects, Deloitte said: “Burdened by years of sub-par returns, cost overruns, and impairment charges, many mining companies opted to concentrate on maximising output from their existing operations rather than investing in new mine supply and exploration.

“This resulted in supply shortages for commodities such as copper, zinc, cobalt, lithium, and gold. But with the cycle turning, mining companies will need to engage in a wave of new capital projects to offset production declines and meet demand.

“To overcome these challenges, mining companies must build their maturity in five key areas: delivery models, data and technology, project controls, license to operate and collaboration.”

On reimagining work, workers, and the workplace, Deloitte said: “The mining industry is facing a changing talent landscape, with digitisation necessitating new skillsets, a massive generational shift when considering C-suite succession planning and a younger generation of workers who measure loyalty to an employer in months instead of years.

“To prepare for this imminent future, organisations need to clarify not only their business goals and aspirations, but also the role that their talent strategy should play to deliver on them.

“They will also need to identify the workers of the future by considering what the employee experience will look like, and the role that innovation will play in that experience. Finally, they must reconceive how employees will interact with each other and conduct their work, be it in a physical location or remotely.”

On operationalising diversity and inclusion programmes, Deloitte said: “The mining industry is not attracting sufficient numbers of diverse candidates and, to shift this balance, companies will not only need to change their talent attraction and retention policies, they will also need to change historical perceptions about the mining industry.

“Instead of approaching the issue by adopting point initiatives, they must design integrated programmes to tackle the challenge holistically. This extends into the area of talent retention, because when companies do attract women, they often struggle to retain them.

“In tandem with shifting the way they operate, mining companies must take steps to amend their public image. This starts with the image they portray on their reports and in their advertisements.”

And, finally, on demanding provenance, Deloitte said: “Rising demand for electric vehicles (EVs) is increasing demand for EV battery materials such as cobalt, lithium, graphite, and copper.

“However, socially-conscious consumers are now questioning the provenance of raw materials. As a result, downstream customers, such as automotive manufacturers and technology giants, are demanding ethically-sourced minerals.

“This is putting unprecedented pressure on mining companies to create a more transparent interface with their customers and driving the adoption of technologies such as blockchain to enhance the traceability of commodities.”

To download the full report, go to deloitte.com/trackingthetrends

ERG trials IBM Blockchain Platform to support Clean Cobalt Framework

Base metals, Energy minerals, Mine operation news, Mining services, Mining software, , , , , , , , ,

Eurasian Resources Group says it will pilot a blockchain-based solution built on the IBM Blockchain Platform at its Metalkol RTR operation in the Democratic Republic of the Congo to help enhance the provenance and traceability of cobalt in the metal’s supply chain.

Metalkol RTR is ERG’s hydrometallurgical plant in the DRC and has a target capacity of 24,000 t/y of cobalt.

ERG said: “While cobalt and other metals such as copper, nickel and lithium drive the global battery sector, their extraction may come at high cost for the surrounding ecosystem, including the use of child labour and pollution which is compounded by the current dearth of viable reuse and recycling systems. The blockchain-based solution helps to ensure that the material is traceable.”

The blockchain supports ERG’s Clean Cobalt Framework at Metalkol RTR, a reprocessing plant for historic copper and cobalt tailings from previous mining operations, which is nearing operation, according to ERG.

Niels de Jongh, Executive Partner IBM Global Business Services, said: “ERG’s initiative to implement a blockchain solution to bring together stakeholders across the cobalt supply chain can help transform entire business processes in the mining industry and help bring new levels of trust. Leveraging IBM’s digital capabilities enables parties to develop the solution through an interactive approach with clear business focus.”

Benedikt Sobotka, CEO of Eurasian Resources Group and co-chair of the Global Battery Alliance, said: “This blockchain-based solution will aim to enable manufacturers to confirm that the cobalt was sourced at Metalkol RTR by aggregating the necessary data and information on the raw material.”

Leveraging IBM’s blockchain platform and expertise, the platform will aim to determine the provenance of cobalt throughout the supply chain, from extraction to production, a process that is currently complex and costly. Using blockchain will allow individuals to track the origins of cobalt across the supply chain, including once it’s been to a smelter and blended, and reduce costs through efficient information sharing, tracking and transparency according to the highest standards.

Sobotka added: “As a founding member of the World Economic Forum’s Global Battery Alliance, ERG aims to create new standards in the industry. We are therefore pleased to be piloting this innovative blockchain-based solution on the IBM platform. This way we can guarantee with certainty that the material that customers buy is not tainted by artisanally-produced material.”

Last week, MineHub Technologies and IBM announced a collaboration to use blockchain technology to help improve operational efficiencies, logistics and financing and reduce costs in the high-value mineral concentrates supply chain — from mine to end buyer. Goldcorp, ING Bank, Kutcho Copper, Ocean Partners and Wheaton Precious Metals are working with MineHub to build the new mining supply chain solution on top of the IBM Blockchain Platform.

Blockchain trading software could lead to golden future for miners

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A new blockchain software platform is allowing miners to trade on the future value of their unprocessed materials, according to industry-backed research organisation Mining3.

Julian Wise, a Software Engineer at Mining3 and RMIT University Student, said the software used financial algorithms along with transparent blockchain “smart contracts”, to enable the trading of derivatives.

Derivatives are financial contracts where buyers agree to purchase an asset, in this case unprocessed ore containing gold, on a specific date at a set price.

Unprocessed ore is often stockpiled if not profitable to process or extract at current market rates. But Wise said fluctuations in commodity prices and advances in mining technology meant ore previously deemed unprofitable often becomes profitable to process in the future.

“This simply harnesses that future value of unprocessed materials today to give miners immediate cash flow and royalties from their stockpiles, whilst enabling market traders to profit on future price increases,” he said.

“But while people are already trading on the future value of processed metals and minerals, no-one has applied the same pricing mechanisms and exchange styles higher up the supply chain to unprocessed minerals.”

The team’s pioneering project was presented this week at the 3rd Symposium on Distributed Ledger Technology on Queensland’s Gold Coast.

To develop the prototype software, RMIT University students worked with Mining3, which had a vision for a next-generation blockchain-backed platform.

Mining3 senior mining researchers provided the mining industry context, technical detail and know-how on mineral price calculations while the RMIT Software Engineering and IT students developed the pricing algorithm, blockchain ecosystem and website interface, according to Mining3.

Mining3 Chief Operating Officer, Susan Grandone, said the technology was built through interdisciplinary co-operation, with the solution combining mineral technologies and finance, deployed as a software service.

The technology is currently set up as a prototype on a demonstration website for internal use and testing. Another iteration of development is necessary to carry the proof of concept through to a platform that can be utilised in a production environment for real value transactions.

BNP, HSBC, Cargill and Rio Tinto complete iron ore blockchain transaction

IoT, Mining finance, Mining services, Steel and iron ore, , , , ,

BNP Paribas and HSBC Singapore have completed Singapore’s first fully digitised end-to-end letter of credit transaction between two different companies. The deal involved Rio Tinto selling a bulk shipment of iron ore originating from Australia to China to its trading customer Cargill.

It represents a move that will take the digitisation of trade finance a step closer to becoming a commercial reality, according to BNP and HSBC.

As part of the transaction, BNP issued a letter of credit (LC) over the blockchain on behalf of Cargill to HSBC Singapore acting on behalf of Rio Tinto.

Both BNP and HSBC enabled a transfer of electronic bill of lading (eBL) over traded goods using a digital LC for the first time in Singapore, by integrating the Voltron trade finance solution (through R3’s Corda blockchain platform in the back-end) with Bolero’s eBL system.

Benefits of the system include:

  • Digital transactions ensure trade flows are faster, simpler and more efficient;
  • The LC issuance was completed in less than two hours compared with one to two for traditional, paper-based LCs;
  • More counterparties were engaged in this transaction, compared to previous blockchain transactions with full digital integration, indicating there is increased interest across the industry to digitise cross border transactions;
  • The faster documentation turnaround for each shipment can potentially lead to increased flexibility in liquidity management resulting in working capital optimisation.

Zoran Lozevski, Head of Global Trade Solutions, Asia Pacific, BNP Paribas, said: “Blockchain technology is an important pillar in our innovation agenda and we believe that transactions like this one will help achieve greater efficiency and transparency in trade finance for the benefit of all players in this space.”

Iain Morrison, HSBC Singapore Head of Global Trade and Receivables, said: “The transaction represents a significant advancement of this solution since our first transaction earlier this year, which further validates its commercial and operational viability to establish a new era of digital trade. Together with banks and the trade finance industry we will continue to improve this solution by adding new features and functionality as we move towards a commercial launch.”

Rio Tinto Head of Commercial Treasury, Abel Martins-Alexandre said blockchain offers efficiencies and greater transparency, while also creating a viable new offering to Rio’s customers and stakeholders along the supply chain.

“This pioneering transaction demonstrated our commitment to partnering with our customers to meet their needs, to stay agile and responsive to opportunities for improving efficiencies, and make our respective businesses stronger,” he added.

Lee Kirk, Managing Director for Cargill’s Metals business: “What was previously a complex process is now accessible via a more modern, digitally-based approach and a secure platform. At Cargill, we are transforming our supply chain with digital technologies like blockchain in trade finance, commodity trade operations and traceable food programs to better serve our customers across the globe.”

MineHub looks to solve industry problems with blockchain technology

Base metals, High tech minerals, Mineral commodities, Mining services, Mining software, Precious metals, Steel and iron ore

Vancouver-based exploration company Kutcho Copper has confirmed it and a number of mining and metals-related firms have launched a new hub aimed at leveraging blockchain technology.

Kutcho is joined by a senior mining company, one of the world’s largest streaming companies, an international base and precious metals and concentrates trading company specialising in trading and financing solutions for miners and smelters, and a global financial institution offering banking services to the industry in developing the hub.

Kutcho, itself, is working on its copper-zinc-silver-gold project in British Columbia, Canada, where concentrates would be produced. It believes it could realise cost savings at the project through using the hub.

The initial application of MineHub focuses on supply chain and asset management to create a secure, traceable and streamlined journey of assets from the mine site to the smelter and beyond, according to Kutcho.

“The MineHub application looks to significantly reduce cost and solve issues around lack of transparency and create visibility and accountability with real-time asset information available at every step of the supply chain worldwide,” the company said.

Vince Sorace, CEO of Kutcho Copper, said each syndicate member brought a unique perspective and knowledge to the hub that will assist in developing applications around solutions to real problems in the mining industry.

“Working together, MineHub will be exposed to the vast knowledge and experience of the syndicate that will drive application development to become adopted and useable by industry as a whole,” he said.

Each member will appoint a person to a product steering committee and to MineHub’s advisory board around a multi-year commitment. Syndicate members will receive a founder’s equity position in MineHub and are entitled to pre-emptive rights to participate in equity financings.