Canadian blockchain startup MineHub and London trade finance firm Kimura announced they will form a joint venture to create a solution for syndicate financing of commodity supply chains. One of the project’s goals is for the syndicate to verify the ESG credentials of the commodities supplied, enabling the investment to be classified as sustainable. MineHub previously processed trades with the likes of BHP and Baosteel and has a relationship with ING, a former employer of its founding CEO. It first partnered with Kimura in 2019.
Syndicate financing involves multiple financiers providing joint funding for the commodities transaction. Inevitably many transactions get amended along the way, which becomes messy when multiple financiers are involved. Digitizing the process by using blockchain should help.
MineHub was founded to reduce paperwork in mining supply chains enabling digital transactions and supply chain traceability. ESG tracking is particularly important in mining, as it allows companies to be transparent about their processes, emissions, and other environmental impacts. Late last year, MineHub launched its ESG solution, which digitally captures ESG certifications and credentials, allowing the data to be included in all transactions whether that’s a sale, purchase or funding.
“This venture is a natural expansion of our partnership with Kimura. We have a shared vision for how blockchain technology will transform commodity trade finance,” said Arnoud Star Busmann, MineHub CEO. “The real-time transparency and immutability will reduce credit and ESG compliance risk.”
Many other companies have the same vision and technologies for ESG solutions using blockchain. UK-based Circulor has already implemented ESG processes with multiple vehicle manufacturers, such as Volvo, Jaguar Land Rover and Mercedes. MineHub’s technology partner IBM also has the Responsible Sourcing Blockchain Network, including Ford, Volkswagen, Fiat Chrysler, and Volvo.