Minerac, a new blockchain consortium, has been established with the aim of changing the way mineral commodities trading and connected supply chains operate.
Blockchain venture studio ConsenSys and cloud-based metal concentrates exchange Open Mineral set up the joint venture, and said that a number of mining companies and financial institutions will also join as stakeholders and collaborators.
In a statement announcing the JV, the partners stated: “The mining and metals industry is a critical component of the global economy. However, many operational and commercial practices remain inefficient and antiquated, leading to critical data omissions, security vulnerabilities, and even corruption.
“These inefficiencies can be eliminated with blockchain, an immutable and cryptographically secure archive of records stored on a distributed ledger, by using smart contracts built on the Ethereum platform. Minerac will allow stakeholders to securely exchange critical trade documents, such as bills of lading and letters of credit, via the use of smart contracts.
Boris Eykher, CEO Open Mineral, commented: “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. Thus, the industry is primed for blockchain disruption to simplify the trading process, increase efficiency and profitability.”
Beyond mining and metals, blockchain solutions are applicable to all stakeholders connected to the broader value chain, from ship operators and financial institutions to surveying laboratories, warehouses and many others.
Joseph Lubin, co-founder of Ethereum and founder of ConsenSys, said: “At ConsenSys, we are dedicated to building the Ethereum ecosystem and committed to supporting new use cases across all industries.
“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 digitisation, secure data collection, the seamless exchange of data and immutability of their records, made possible by the Ethereum platform.”
It is claimed that Minerac stakeholders will benefit from increased compliance, transparency and ease of auditability. Because the Minerac ledger will be shared, it is said that all parties involved in a transaction can be confident that all data is up-to-date, which will reduce errors and create greater overall transparency, eliminating the potential for bad actors to take advantage of loose record keeping.
“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, Minerac CEO.
Minerac is also set on addressing key 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 will also help validate that the commodity being purchased is from compliant and conflict-free regions.
Minerac will 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, a customisable solution designed to support the commodities logistics space by reducing the amount of data entry points and reconciliations during the supply chain process.
The project will be incubated out of Consensys Energy and Natural Resources group, a team within ConsenSys Solutions, in partnership with Open Mineral.