MineHub has formed a consortium to revolutionize the way an old industry is doing business. The list of initial participants is rather impressive: Goldcorp Inc., ING Bank, Kutcho Copper Corp., Ocean Partners USA Inc. and Wheaton Precious Metals Corp. While the technology is being built by IBM. The stated goal of this initiative is to “to significantly reduce cost and solve issues around lack of transparency and create visibility and accountability with real-time asset information available at every step of the supply chain worldwide”.
We have interviewed Hugh Halford-Thompson, VP of Business Development at MineHub, Sai Yadati, IBM’s Leader – IoT, Analytics & Blockchain for Industrial Markets and Max Nelson, IBM’s Global Business Development Executive – Industrial Products to get a deeper understanding of the project.
The initial members of the consortium encapsulate the industry as a whole as it includes a mining company, a streaming company, a trading company, and a financial intermediary. Also, it’s important to note that the platform is open to all the players in the industry, there is an understanding that the more companies participate, the greater the impact.
The most impressive achievement of MineHub thus far is the ability to create this consortium in the first place. When one mentions “mining” and “blockchain” in the same sentence, a different kind mining comes to mind… Thus, we had to ask how they were able to convince all these companies to join? –
“It’s a $1.8 trillion industry, yet the quality of deposits is declining, thus to stay competitive, mining companies have to look for ways to cut costs,” said Mr. Nelson, adding “it’s for early adopters”.
According to Mr. Halford-Thompson, through the increased visibility of the entire supply chain, “the participants can free up cash flows” and this makes it an easy sell when you talk to the CFOs. Having this platform in place will significantly cut down on the paperwork, lower docking fees, and overall lower OpEx. In addition, as consumers become more conscientious of the provenance of the goods including natural resources (child slave laborers, destruction of indigenous lands), it puts pressure on the producers to come up with solutions which allow traceability and blockchain is a perfect technology for this purpose.
The platform has been in development for several months and the first real transactions are expected to take place by mid-2019. “The biggest challenges with the platform are not technological (IBM has built hundreds of blockchain platforms already), but rather understanding all the business processes involved and transferring it into software” mentioned Mr. Yadati. However, it’s an iterative process, the platform will be continuously improved, with new functionality being added over time.
The fact that ING Bank is participating in this consortium from the beginning, broadens its functionality. In addition to streamlining basic supply chain functions, the participants will be able to use it for financial transactions amongst themselves. I had to propose a litmus test to Misters Nelson and Yadati – “Why use blockchain and not a database”?
“It’s much more than a database, blockchain acts as a layer to which you can attach various APIs, automate processes through smart contracts, provide a single view across the industry.“
In terms of access to data, the platform is built on common premises of a permissioned blockchain – access to data will be granted on the need to know basis “all parties agree to disclose the minimal amount of data” that will still allow the participants to benefit from it.
On a side note, the news about this consortium hit the wires on January 16, two days after the announcement of a merger between Goldcorp and Newmont which is to create the world’s biggest gold mining company. According to Maison Placements researcher John Lng, one of the main reasons for the merger is GoldCorp’s lack of free cash flows. Goldcorp’s stock rallied from $9.60 on January 11 to a $10.48 close on January 24, a 9% gain.
Source: cryptoinsider, source link can be accessed here
Special thanks to Hannah Slocum for helping to organize the interviews.