Engineering & Mining Journal

SEP 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 59 of 75

58 E&MJ • SEPTEMBER 2018 OPERATING STRATEGIES consumables stock when supplies run low, with payments being made auto- matically upon delivery. Shabir Ahmed, mining industry advi- sor at SAP Africa, suggested other bene- fi ts as well: • Automatic registration of mineral rights and IP: Blockchain can automate the registering process and replace the rush to government mineral rights depart- ments when mining companies make a discovery. • Visibility of ore inventory at ports: Ports receive ore from several different sourc- es and owners. Blockchain can be used to declare and provide visibility for all the reception of ore. • Automatic cargo hire process: Block- chain can bring more fl exibility to the freight hiring process and create an Uber-like automatic cargo hiring pro- cess. Specialized systems could hire the ship and register the contract in a distributed ledger system automatically, reducing freight costs and saving sig- nifi cant time. The announcements referred to above were both focused on maintaining the provenance of metals that are commonly included in the "confl ict" category. Ear- lier this year, Emergent Technology Hold- ings LP announced a partnership with Yamana Gold Inc., which operates seven mines scattered throughout Canada, Bra- zil, Chile and Argentina, and which ex- pects to produce 900,000 ounces (oz) of gold, 8.15 million oz of silver and 120 million lb of copper in 2018. Emergent said Yamana is the fi rst to license its blockchain technology supply chain solution, which traces the prove- nance of confl ict-free gold from mines to refi neries, and through to vaults. The solu- tion uses blockchain technology to admin- ister smart contracts among the parties involved in the delivery of gold-bearing material, including miners, refi neries, logistics providers and insurance compa- nies. Yamana has made an investment and is a founding partner in Emergent. Peter Marrone, Yamana's chairman and chief executive offi cer, said, "While our conformance with the Confl ict-free Gold Standard is independently attested to each year, we see signifi cant effi ciencies, value, and potential for greater assurance by tracking title and provenance of gold on a blockchain data network throughout the gold value-chain. We began working with Emergent in early 2016, and the platform they have developed proves provenance, assuring buyers and investors that the gold they buy is from responsible sources. A digitized supply chain process will im- prove effi ciency and transparency." Emergent said its Responsible Gold platform is the only permissioned block- chain that tracks responsibly sourced gold from its origin to vault. Miners, in- cluding Yamana, and other supply chain participants will use Emergent's mobile application that scans smart chips in tamper-proof seals and records transfer of custody and other data on the Responsi- ble Gold blockchain. Emergent Technology is also launching G-Coin, a digital token backed by physical gold sourced from the Responsible Gold supply-chain platform. Yamana expects G-Coin will enhance and expand the ben- efi ts of the Responsible Gold platform by providing a credible investment product to investors and individuals. G-Coins were made available as a means of exchange and a new investment class in the second quarter of 2018. In August, Canada-based Cobalt Block- chain Inc. and DLT Labs Inc. reported that they had fi nalized a joint venture (JV) agree- ment to commercialize Mintrax, described as a fully functional blockchain platform providing secure and transparent methods for tracking the provenance of metals and minerals through the entire mining supply chain from source to end-user. The JV partners said Mintrax is the fi rst enterprise-grade blockchain plat- form built from the ground up to ensure compliance with the Organization for Economic Cooperation and Development (OECD) due diligence framework for the provenance of ethically sourced minerals. The transactional fl ow of Mintrax is based on COBC's operational experience trad- ing certifi ed-confl ict-free metals in the Democratic Republic of the Congo and work with due diligence program design fi rm BetterChain, as well as DLT's supply chain and logistics experience with IBM's Hyperledger Fabric blockchain. These announcements follow up on the July 2017 startup of Open Mineral, a cloud-based B2B platform for facilitating concentrate sales between producers and smelters that employs blockchain technol- ogy. Open Mineral, according to its found- ers, former metal traders for Glencore, is designed to eliminate the middleman in concentrate transactions and provide both a higher level of trust for both parties in a transaction and a more effi cient method of conducting business in an area that tradi- tionally has short-changed both producers and smelters while benefi tting interme- diaries. Open Mineral said it will initially cover zinc, lead, copper, gold and silver concentrate markets and plans to expand to other raw materials in the future. Other major mineral producers also have been dabbling in blockchain tech, according to press reports. The Financial Post mentioned in late March that Gold- corp had sent a small amount of gold — 3,000 oz, worth about $4 million — to the Royal Canadian Mint in Ottawa where it will be used to back a new digital trad- ing currency. The trading platform, Vault Chain, will be managed by New York- based Tradewind Markets and will use blockchain to record transactions. Also, during an interview in February, Newmont Mining Corp. Chief Executive Gary Goldberg told Reuters that Newmont was interested in trialing blockchain tech- nology this year as a method to confi rm eth- ical and sustainable production. And, BHP has been using blockchain to enhance data sharing between it and the company's ex- ploration and mineral analysis contractors. Yamana Gold, operator of the Canadian Malartic mine, shown here, and six others, has licensed Emergent Technology Holdings' blockchain-based system for tracing provenance of confl ict-free gold from mines to vaults.

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