Minspider has partnered with Rwandan tin producer LuNa Smelter and Google to develop a blockchain-based tool, OreSource, to help miners and smelters track data about the mineral’s production process. The platform will enable compliance with the new EU Conflict Mineral Regulation for European tin importers. Google’s participation is for its own responsible supply chain.
Tin is a conflict mineral. In politically unstable areas, its trade can be used to finance armed groups and support government corruption. The new EU regulation aims to ensure that EU importers of tin and other conflict minerals meet responsible sourcing standards set by the OECD that also help prevent the minerals trade from financing human rights abuse practices. It will require EU companies in the supply chain to import the minerals covered by the regulation from responsible and conflict-free sources only.
The new regulation, which should come into effect in January of 2021, will directly apply to 600 to 1000 EU importers and indirectly affect an additional 500 smelters and refiners of tin, tantalum, tungsten and gold.
To comply with the new laws, the EU will implement a five-step system of due diligence work that must be followed by the minerals importers. OreSource aims to facilitate importers’ compliance with the system’s requirements.
Through the platform, smelters can upload relevant data into a digital blockchain certificate. A QR code that enables access to the information in the certificates is annexed to mineral shipments or invoices. With the QR code, importers can verify all the data needed to comply with the EU regulation.
“The industry is still unsure about how to comply with the EU Conflict Minerals Regulation. OreSource will give us a tool to provide the information that is required and help European importers collect the required data,” said Olena Wiaderna, Director of Sustainability and Supply Chain Due Diligence at LuNa Smelter. The smelter is getting support from the Responsible Minerals Initiative (RMI) and the Rwandan Mines, Petroleum, and Gas Board (RMB).
Minespider uses Etherum and decentralized file storage solution IPFS to create and separate digital certificates into three layers, depending on whether the data should be public, available only for members in the supply chain, or private between customer and company.
LuNa Smelter and Minespider expect OreSource to be implemented as early as this month.
The project is being developed under a grant awarded to Minespider by EIT Raw Materials earlier this year. In turn, this is backed by the EU’s European Institute of Innovation & Technology (EIT). The startup also raised €2.8m in April, part of which came from the Horizon 2020 program, where the European Commission selects businesses to invest in and support as part of the SME Instrument.
Google will offer industry expertise to ensure OreSource complies with importer and manufacturer requirements. Google had previously worked with Minespider in an end-to-end mineral traceability consortium in the tin supply chain. The project officially began in 2019 with Cisco, SGS, Volkswagen, and Peruvian mining company Minsur as partners, and due to its success, Minespider is planning to incorporate new members. The project earned a mention in Google’s 2019 Responsible Supply Chain Report.
Blockchain traceability for responsible sourcing of minerals is a prominent and expanding industry. Many startups and corporates are developing solutions that support an ethical supply chain for conflict minerals. Circulor recently received an investment from Volvo, and the two companies have been working together on cobalt traceability. German engineering firm DMT launched CERA, a blockchain-based certification system for the mining industry. The platform also received financial support from EIT Raw Materials and includes Volkswagen among others and the UN sits on its advisory board.
Meanwhile, IBM, Ford, Volkswagen and Volvo are part of the Responsible Sourcing Blockchain Networks consortium. The initiative aims to ethically source minerals used in electric cars.