On January 16, IBM announced partnerships with Ford, LG, and MineHub to launch two separate blockchain pilots focused on improving efficiency and transparency in the mining industry.
The first project is a collaboration with six companies that represent vital links in the mining supply chain: MineHub Technologies Inc., Goldcorp Inc, ING Bank, Kutcho Copper Corp., Ocean Partners USA Inc., and Wheaton Precious Metals Corp. The goal is to "help improve operational efficiencies, logistics and financing and reduce costs in the high-value mineral concentrates supply chain – from mine to end buyer."
Much of the mining industry's processes are still manual and paper-based, which creates inefficiencies and blind spots in the mining supply chain. The pilot program is meant to address this issue by creating a permissioned blockchain platform that participants can view in real time.
The pilot program's first use case will utilize the MineHub blockchain platform and test the technology's ability to "manage concentrate from Goldcorp's Penasquito Mine in Mexico throughout its path to market." Once the ore is mined, the data will be uploaded to the blockchain platform. It will include data about sustainability and ethical practices. The data is then verified by "independent regulators," and the ore can then be loaded for shipping. The MineHub platform records each transaction and lets participants "view and reconcile" this data as the product moves through the supply chain. EDCCs (better known as smart contracts) will be used by companies such as ING Bank and Wheaton Precious Metals for "trade finance, streaming and royalty contracts."
Manish Chawla, general manager of global industrial products at IBM, expressed his excitement for the pilot program:
"Blockchain technology can serve as the foundation for transforming entire business processes in the mining industry while creating greater transparency across the supply chain. By bringing together stakeholders at different points across the mining and minerals supply chain, MineHub is building a platform that has the potential to bring new levels of efficiency and trust to the mining industry."
On January 16, IBM separately announced it was partnering with Ford Motor Company, Huayou Cobalt, LG Chem, and RCS Global in an ongoing blockchain pilot program to "trace and validate ethically sourced minerals."
That pilot focuses on the cobalt supply chain. Cobalt is a mineral used in lithium-ion batteries that power electric cars, laptops, and mobile devices. Based on the growing popularity of electric cars and the high demand for consumer electronics, the demand for cobalt is expected to exceed 120,000 tons per year by 2020, a 30 percent increase from the 93,950 tons mined in 2016.
The pilot program is intended to demonstrate blockchain technology's potential to make sure cobalt is mined, produced, and traded responsibly and ethically by providing a transparent, immutable, and verifiable record of the cobalt supply chain from "mine to end manufacturer."
Typically, audits conducted by third parties are responsible for ensuring that miners, smelters, and consumer brands are adhering to industry standards. The conglomerate hopes to use blockchain technology to help industry participants govern one another and make sure each company is conducting business in a responsible and ethical manner.
Although many companies are experimenting with blockchains to improve the efficacy and transparency of supply chains, using the technology to ensure ethical practice is a fairly new use case, though not unprecedented. In October of last year, the Rwandan government announced its collaboration with blockchain startup Circulor to create a blockchain platform designed to track the supply chain of the conflict metal tantalum.
Nathan Graham is a full-time staff writer for ETHNews. He lives in Sparks, Nevada, with his wife, Beth, and dog, Kyia. Nathan has a passion for new technology, grant writing, and short stories. He spends his time rafting the American River, playing video games, and writing.
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The first project […]