Blockchain venture development group ConsenSys has teamed up with cloud-based metal mining exchange platform Open Mineral to form Minerac, a blockchain consortium aimed at disrupting mineral commodities trading and supply chains.
According to a press release Tuesday, a number of mining companies and financial institutions will be stakeholders and collaborators in the joint venture, which will address operational and commercial practices creating inefficiencies in the industry. These can lead to critical data omissions, security vulnerabilities, and even corruption, the companies said. But the inefficiencies can be eliminated with blockchain.
Minerac said it will allow stakeholders to securely exchange critical trade documents, such as bills of lading and letters of credit, via the use of smart contracts. “Commodity trading transactions involve multiple parties, located in different jurisdictions. Logistics are complex, financing is difficult to acquire and the entire process is very paper heavy,” said Boris Eykher CEO of Open Mineral, in a statement. “Thus, the industry is primed for blockchain disruption to simplify the trading process, increase efficiency and profitability.”
According to the consortium partners, they are developing blockchain solutions applicable to all stakeholders connected in the value chain, spanning the metals and mining sector — from ship operators and financial institutions to surveying laboratories and warehouses.
“At ConsenSys, we are dedicated to building the Ethereum ecosystem and committed to supporting new use cases across all industries,” said Joseph Lubin, co-founder of Ethereum and founder of ConsenSys. “We look forward to collaborating with Open Mineral to build blockchain solutions for mining and mineral supply chains. Minerac will offer a solution where all parties involved in the supply chain will benefit from digitization, secure data collection, the seamless exchange of data and immutability of their records, made possible by the Ethereum platform.”
The joint venture partners also said that Minerac stakeholders will benefit from increased compliance, transparency and ease of audibility. “Minerac will be structured within a private network and will offer the most sophisticated levels of encryption, ensuring complete privacy while also benefiting from the vast interconnectivity possibilities of the Ethereum ecosystem,” said Max Weiland, CEO of Minerac.
The company will also address sustainability and security issues by creating processes that would require sealed bags or containers to be stamped with a unique, tamper-proof, identifying ID that will be logged on the Minerac ecosystem. The ID will contain specific information related to each parcel of ore and will also be continually updated with location details and movements. This will provide clients transporting high-value minerals with increased security and help validate that the commodity being purchased is from compliant and conflict-free regions.
Minerac plans to develop its own enterprise platform based on the industry standards established by the Enterprise Ethereum Alliance (EEA). Minerac will also integrate Consensys' cloud-based TMS logistics platform. The consortium believes this will reduce the amount of data entry points and reconciliations during the supply chain process.