Sustainable Sourcing in the Mining Industry

Transcript

all right hi everyone i'm ella cullen i'm co-founder and cmo of minespider and gosh it's lovely to see you guys in person it's a nice break from zoom since we're a small group by the way if you have any questions at any time just feel free to raise your hand i'm happy to be interrupted in case i'm not clarifying something enough so minespider is for supply chain tracking in the mining industry um not crypto mining unfortunately like old-school mining like gold cobalt tin these kind of minerals that you dig out the ground but that go into things like your devices your electric vehicles your jewelry and we do this so that you know where your minerals are coming from and how they've been produced and today i just want to have a little session

about you know what is blockchain for good what is our mission how do we build these kind of companies what are some of the many hurdles that we've tried to overcome um yeah and what are the changes we had to make to our blockchain technology to account for some of these changes so we got started back in 2017 as i'm sure a lot of you did and at that time blockchain was very sexy for supply chains so we decided to tackle the the issue of conflict minerals with um blockchain traceability and this actually came about because of the dodd-frank act in the u.s so there was a little section in it 1502 that said that if you're sourcing minerals from the drc from the democratic republic of congo

you actually have to know where they're coming from and like that they've been sourced responsibly and the unfortunate thing is instead of that making company like instead of that making companies go down to the drc and make sure that they know where their minerals are coming from they just stop sourcing from the drc altogether so it had this like exodus um effect which was obviously not the desired effect and we thought okay there's a lot a lot of regulations coming into play and how do we guide companies to actually gather and share the right due diligence information to do this well to make sure that our supply chains do become more sustainable and at the moment the big one that you should probably well probably won't know about but

could know about is the eu conflict manure's regulation and that came into effect this year in january um and it means that if you're in the eu and you're a large-scale manufacturer or importer you have to know where your three tgs come from and that's tin tan to lim tungsten and gold and a lot of people add cobalt onto that because cobalt is typically very much a conflict mineral as well so with all of these ideas in our mind we built a blockchain what was the second layer protocol and ethereum and essentially all it did was create a digital shipment that tracked along with the physical shipment so that by the time you reached the end of the supply chain you had this chain of custody this overview of all the information about where your your minerals came from and the

conditions under which they had been produced and it was a very linear model as you can see we started from the producer we went to the end manufacturer now we were very fortunate to dive straight into some very big pilot projects so we started working with volkswagen on lead and lit is just one of i think 40 000 minerals that volkswagen uses in their production and we actually worked backwards from volkswagen so here we were identifying 1000 supply chain participants that produce that in some way help them produce lead and it was complex i'm not going to lie it was like 12 supply chains 13 tiers deep and a lot of circular loops because the majority of lead is actually recycled

so from that that like pilot we were like damn it's hard to a work backwards when your whole system has been designed to work forwards and track in a linear fashion and also supply chain mapping takes a lot of work and you're not just putting stuff on the blockchain you're actually going out there and trying to talk to companies and find out who's in a supply chain and the second project we did was at a mine in peru the third largest tin mine in the world called minsoon this photo is actually from there from our team there um beautiful mine up in the andes you have to acclimatize for two days to even get there and they are really like world leading and responsibility so they like invest in the community they invest in like responsible production and wages and so forth so we really wanted to support them

by checking their minerals to our end clients which were google cisco folks and volkswagen and then sgs was our auditing company so they're one of the biggest auditors in the world and in this project we realized damn it's hard to keep everyone happy you know you have a consortium like this with many different competing needs people have different ideas of what transparency is they have different ideas of what information they want to share so some people you know want to share a lot some people obviously want to keep a lot of things confidential so that was kind of the second issue that we encountered so after those two huge projects we came to a couple of resounding questions and the first one was how can we sell to just one company at a time

how can we bring value to one stakeholder what can we do so we don't have to onboard an entire supply chain but we can just you know serve one niche and the second one was how can we incentivize upstream production or upstream producers because we know that the majority of the issues in supply chains happen upstream unfortunately you know a lot of production mines and smelters are in developing countries and because of the price pressure that they face from large brands you know it eventually comes back and they then don't have the the money to spend on waste management or they might pay their employees less so how can we make sure that these producers are a being more responsible and be sharing that data and this year we launched product

passports and that's a blockchain secure digital id for your raw materials so this is helping your materials to cross borders to include all the data they need to get into certain zones and to enable a circular economy so greater recycling and so forth and you can see a little snapshot of what our product passports look like today on the right and this in itself was what we were aiming to achieve it focused on just one niche on one market which is upstream producers and allows them to access the world's biggest markets if you are in rwanda and you want to import into the eu you have to be compliant with many regulations and you have to capture that in one place so it allowed them to basically

distinguish themselves as a responsible producer for the first time and unlike your real passport you can actually customize this so depending on the jurisdiction you are and there's a lot of different rules and regulations you know we're working with some potential clients in venezuela for instance and then they need kyc or aml info or if you're looking to get potential esg investment then you want to be positioning your passport to appeal to sustainable investors so we created basically this drag-and-drop system that allows anyone to collect data about different parts of their supply chain now one of the things that i mentioned before was this real struggle between

how much data do we share along a supply chain uh and we actually built this into our blockchain so we decided to segment out the data into three layers first is the private layer so this might just be invoices or bills of lading that you want to send to your to your downstream supplier the next is a transparency layer so this is all along the supply chain um any data that you want to share like iso 9000 or anything that you want your entire supply chain to be aware of and the third one is the public layer so this is real really where the transparency happens this is where people want to share sustainability info all along their supply chain to actually show with their end customers now these days once we've made all these adjustments we actually this

year launched a couple of huge projects or this one was last year but um we work with luna smelter which is one of the leading tim producers in rwanda and now they actually have product passports on all of their tin leaving the smelter so about 10 000 ingots i think so far have gone out um as well as their tin slag so that's all the i guess pre-consumer waste is what you call it or like the the off put from their production and that actually goes to germany and then is used again in other refining processes so as you can see there's an ingot with the qr code that would like link to their product passport and google and the rwandan mining board is also part of that project so here's a little old me down in rwanda

understanding what it takes to actually implement a blockchain project on the site which is basically not as exciting as it sounds it's about understanding what kind of data they have already what you need to collect who needs to collect it what needs to be entered into a product passport and so forth and for luna that was basically about collecting due diligence information they wanted to export into the eu and could be compliant with the eu conflict mineral regulation so that's the majority of the info that they include in their product passports now and the second project we launched is with our original client minsuha from peru to germany so minso produces 12 of the world's tin and now we track all of their shipments as they leave and go to clients around

the world and the ones that we do track to include some huge ones in germany so they use it for a range of like secondary manufacturing like solder or unsexy things but very necessary um and actually the focus on in this project is really on carbon emissions so carbon emissions traceability is the hot topic in supply chain traceability at the moment everybody wants to be able to track not only their scope one but also their scope threes so all along the supply chain can we go a bit deeper we absolutely can so as we start to gather all of this data we are building data analysis tools obviously to help people make better business decisions we have erp integrations uh enterprise resource planning and we

actually also offer our api so people build on top of our api are starting to look to build on top of that which is a use case that we didn't actually foresee until this year probably the most common question i get asked is how do we connect the physical and the digital worlds you know how do we connect these minerals or whatever we're tracking to the blockchain which is a great question and so we are exploring a lot about iot and physical trackers um at the moment we use for instance for things like 10 we just use a qr code because tin is a relatively low price point mineral but if you're tracking something like gold you need like geo locators you might need like a chemical concoction that you can scan at a later point to prove that that gold is the gold it was originally

uh we also do a project in cotton for instance and then we're tracking organic cotton from a farm in turkey and for that you need to know that you know the organic cotton is organic that it is doesn't have gmo cs it doesn't have pesticides it needs to be kept separate from conventional cotton so then you look at things like fluorescent sprays or synthetic dna which can be scanned at a later point and actually we're going to release an academic article so if that interests you keep your eyes on our website in the coming month so this is our little team we were in berlin for the past three years now we're fully remote um and if you're interested if you happen to be a devops or back end developer or head of sales please reach out to me as a side note and you can reach out to

me via email or obviously come chat to me after this talk and i'm happy to answer any questions that you have thank you yes sir why were you passionate about starting this project i think that supply chains were just such a great use case for blockchain you know it was like one of those things that the complexity was like a decentralized system could deal really well with it um and actually a lot of our a lot of our partners were like we've been wanting to do this for so long like google um have like they have a whole department for responsible minerals and now they've been trying different solutions for years and they were desperately searching for something new

and everyone's like can you do this without blockchain many people have tried um but sometimes maybe it's not the technology it's just the the novelty of it that helps to get people on board it helps to get budgets on board um so the reception that we had immediately and that we could see that there were really people desperate for that technology as a tool to help them was kind of yeah it was inspiring thank you so this was yeah when we were consulting a lot of our clients that we recognized that they needed to have different layers of information so

when you go into our software and you're updating and you're uploading a document into the product passport you can essentially choose which layer it's going to go into and they're all hash they're all on the blockchain um we have a block explorer so you can go and you can check out the public layer and make sure that the documents haven't been changed we don't actually use tokens in our system so it's just three layers of data visibility basically cool all right well thank you so much and have a lovely ecc you