Establishing Traceabllity in the Mining Supply Chain with Blockchain

Mining Supply Chain Meets Blockchain for End-to-End Tracking

Posted by : Mudit Kumar | 28-Aug-2020

  • Blockchain mining Solution

    Mining companies are piloting blockchain to track and trace resources like conflict minerals and diamonds as they pass through the supply chain from the mine site. But, how is it going to work in action, and can one rely on catching illicit and unwanted activity? Let’s find out if blockchain supply chain development for the mining industry can make it possible to track mineral from mine to our smartphones.

    What is Blockchain Technology

    Blockchain is an ever-increasing list of records stored in a decentralized, unchangeable and cryptographically encrypted online ledger. All information stored on the network is authenticated peer-to-peer, and thus, nobody can compromise it without others being quickly aware of it.

    One of the main advantages of blockchain – a technology built as a decentralized transaction ledger for bitcoin more than a decade ago – is that it provides a transparent audit trail for all stakeholders. As a result, it builds inherent trust in processes or transactions.

    Introducing Blockchain in the Mining Supply Chain 

    Mining companies can use the technology to document several different information, such as staff entering and leaving a mine site, commodity movement, financial transactions, or even creating smart contracts solutions between two parties.

    However, until now, the most significant transformation that blockchain can ensure is to establish transparency in the mining supply chain. It can enable tracking and identification of valuable gems and essential minerals like diamonds, nickel, tungsten, and cobalt.

    blockchain-powered mining supply chain
    Source: Google

    Can a Transparent Mining Supply Chain be Established with Blockchain

    What we suggest to prove provenance in the mining sector is an industry-specific blockchain. Every stakeholder in the network will see any step taken by any other participant in it. It can lead to improved consistency in the supply chain. As each transaction has an associated digital signature, it also provides auditability by clearly identifying the owner.

    Companies are hoping to leverage the track-trace capabilities of the technology to monitor the lifetime of a commodity to prove its origin and provide guarantees that manufacturing happened sustainably and responsibly.

    Also, Read | A Use Case for Blockchain in Thorium’s Supply Chain Traceability

    Are there any Similar Initiatives

    Diamond giant DeBee rs launched a blockchain project in January to create trust in the supply chain of diamonds and the industry as a whole by ensuring that all registered gems are conflict-free and safe, while also improving sector-wide performance.

    According to a spokesman for the company, The Diamond Blockchain Project enables building a robust, secure, transparent, efficient, and permanent digital record for each diamond recorded on the network as an additional layer of security that was not previously possible.

    Also, Reuters reported on an undisclosed blockchain pilot project that will be used for the first time to track cobalt from mines in the Democratic Republic of Congo to goods used in smartphones and electric cars.

    Such projects follow in the footsteps of Everledger. It is a blockchain-based network built to track diamonds some years ago. The company has revealed its Diamond Time-Lapse Protocol initiative aimed at engaging everyone in the diamond supply chain. It includes producers, suppliers, manufacturers, distributors, and customers, urging them to build and track the entire journey of a gem, making the knowledge available to all.

    The company has recorded more than a million diamonds so far and is going to include strategic metals, alloys, and conflict minerals for the electronic industry.

    Digitizing the Process with Blockchain

    For an efficient supply chain, blockchain technology must record information about what is happening in the real world. It is a challenge when monitoring physical items since the input information must be a representation of events. But how do businesses guarantee that?

    DeBeers states that it is still deciding the information that can be obtained viably from suppliers and displayed on the chain. It employs a two-stage method to verify that the diamond that a customer receives is the same as that reported on the blockchain.

    The first step is to grant a unique ID to each diamond in the form of a barcode on the blockchain corresponding to its digital certificate. The second is a comparison of primary information such as stone characteristics and secondary data like the transaction history to ensure the data stored on the blockchain matches the real diamonds. There may be up to 180 single points of data.

    Since each diamond is unique in its physical composition, as is the path it takes across the value chain, blockchain will help the identification of any replacement diamonds or falsified uploads of data.

    The company claims that the platform will also streamline efficiencies, effectively reducing the time and expense for other consumers to conduct business.

    How Everledger Does it

    Everledger claims it validates details by performing on-site testing and auditing, as well as using artificial intelligence, the Internet of Things, and RFID monitoring to provide the most precise degree of data for device entry possible.

    We need to do it in a way that protects data privacy. It is because it is not acceptable to share information downstream of a supply chain in certain parts of the process. It is crucial to show that the process has got completed so that it fulfills all requirements while being governed by a third party entity.

    Also, Read | Creating a Nexus of Blockchain, AI, and IoT for Business Solutions

    Cobalt Tracking from Mine to Buyers

    However, it is cumbersome to track ores such as cobalt. As reported by Reuters, the Congo-based blockchain pilot project will operate in a process whereby each sealed cobalt bag created by a certified artisanal miner receives a digital tag, which then gets inserted into a mobile phone blockchain network. The log will include the weight, date, time, and probably a photograph of the ore.

    The dealer who buys the bag must record the data on the device, in a cycle that is replicated before the ore enters the smelter, and an unchanging record of the journey of cobalt has been logged and can be viewed for downstream buyers or third parties.

    Conclusion

    We still need to determine how well the system performs to provide real-world solutions to complex problems such as detecting conflict minerals and blood diamonds within a supply chain. Upon getting successful, it will need industry-wide technology adoption for optimum gain. Nevertheless, for an industry not known for accountability, the new emphasis and push for accountability and accessibility that this technology has allowed represent a very positive move forward. Connect with our blockchain engineers to know more about blockchain in the mining industry.


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About Author

Mudit Kumar (Writer)

Mudit has been working with Oodles since 2017. He writes about technologies that not only disrupt the digital space but also influence the physical world. Initially, he explored revolutionary technologies like ERP (Enterprise Resource Planning) and AI (Artificial Intelligence). Now, he focuses on unfolding the elements of blockchain technology, given its potential and edge over others.

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