Blockchain is a notable buzzword, and while the technology is being rapidly adopted by many industries, the mining sector has been criticized for staying stuck on old models.
“The world has been transformed by new technologies such as the internet and the blockchain, mining has continued to do business slower and more expensively than is necessary,” said Grant Lenaarts, CEO of Mineral Assurance – an Australian start-up aiming to bring the power of blockchain to the global mining industry media statement late last year.
Miners are explorers to the core, so why are they underexploring blockchain?
Blockchain is still a baby in mining, and a topical issue, as specialists weigh the possible risks and opportunities for the industry.
“There’s certainly no shortage of discussion, just little action,” Lenaarts said.
For experts, it’s not a matter of if the industry will adopt blockchain, but when.
Deloitte’s 2018 Tracking the Trends report reaffirms that growing reliance on data in the mining sector introduces the potential to use blockchain technology to create fully transparent, secure, and traceable transaction histories.
“Blockchain is often thought of for finance applications like enhancing accounts payable processes by eliminating the need to reconcile purchase orders and invoices or streamlining trade finance by supporting the creation of smart contracts to automatically execute payments,” the report reads.
Vince Sorace, CEO of Kutcho Copper, a veteran of the mining space and founder of Vancouver- based MineHub Technologies, was looking for a way to make a blockchain-based impact on the industry.
MineHub and IBM (NYSE: IBM) recently 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.
IBM is collaborating with MineHub to develop the MineHub Platform, utilizing IBM’s Cloud and blockchain infrastructure tools.
“IBM has been pushing into the blockchain space for a couple of years, they have missed all of the other big technology moves over the years, so they have actually been pushing hard on blockchain and cloud services,” Sorace told MINING.com.
“As far as Minehub goes we wanted to build a platform that we can obviously make available and give license to anybody and everybody in the ecosystem of the mining world and the supply chain,” Sorace said. “To do that right we wanted to pull in on the corner points called key stake holders within the mining supply chain and obviously those are the miner itself [and] whoever owns the supply chain.”
Sorace emphasized that blockchain is an underlying technology with many uses other than creating cryptocurrency tokens.
“This is where you see its not a tendency for everyone in the world but high frequency transaction businesses. This is where you see the adoption starting to come from banking, security, healthcare any platform where you want to control what information is going to who, insurance companies etc. all those kinds of companies have been the early adopters of it,” he said.
“The reason why no one [in mining] has been paying attention to this…the reason why digitizing the supply chain hasn’t really become front and center is because we were never able to achieve the level of efficiencies that you can utilizing blockchain.”
“There is no amount of tech in that past that would have been able to give you the amount of transparency and real time data sharing, up to date information as blockchain is giving you right now,” Sorace said.
Sorace asserted that mining is the slowest industry to adapt to new technology.
“There is Goldcorp using AI for resource modelling and there’s these other pieces that are coming together that help, but there is no other digital nerve center. Anything with high frequency trading and transaction type of system you can cut the middleman and basically do things more efficiently. That is where blockchain thrives,” Sorace said.
“The miners had their day in the sun, but now you have declining rate curves and increasing costs so how are they going to start adapting to this and how are they going to drive the bottom line now?” Sorace asked.
For now, the first collaboration with IBM’s first use case will be built on the MineHub platform and will manage concentrate from Goldcorp’s Penasquito mine in Mexico throughout its path to market.