Sustainable Sourcing in the Mining Industry

Transcript

wonderful okay thank you so much for coming uh welcome everybody to day two of the crypto Valley Conference uh we have four short Keynotes uh here today so an hour uh now on mining and sustainability uh and the first one here we have Ella from mind spider welcome [Music] hi all right good morning everyone I'm Ella I'm co-founder and CMO of Mind spider and what we do is essentially blockchain traceability for the mining industry so that's tracking from M to manufacturer things like gold Cobalt and tent and tungsten all the stuff that goes essentially into your devices into your electric vehicles into your

jewelry and we've been doing this well more or less for about five years um and in that time like any startup we've had our fair share of mistakes fair share of pivots um but today I want to kind of walk you through our thinking about how to make Supply chains more sustainable and maybe a little preamble to this Supply chains in themselves are incredibly complex right they're opaque um they you know everything that we consume comes from a supply chain and they've been kept opaque for a reason that's because middlemen are obviously benefiting from that opacity so working with Supply chains is a bit of a headache to start with and we'll we'll go into that in more detail and the second word I want to focus on here is is sustainability um which is obviously a word you probably hear thrown around

nonstop what does that mean you know what does it mean to you if I would ask any one of you what what is sustainability I'm sure you would come up with an answer that would be somewhat correct and um and sorry have I got some mic interference here earring that's my earring should we pop that out not to annoy you oh now it's stuck there we go cool all right now it's peaceful um so yeah what I was trying to say is that um when we think about sustainability you probably think about EST so some parts environmental some parts social some parts governance so everything from deforestation to human rights to lobbying and Corruption and the the truth is it's

it's even more complex than that you know it varies on the vertical the industry that you're in and um and companies are on a spectrum they're not unsustainable and sustainable most of them have parts that are sustainable and we're helping them to be higher on that spectrum of sustainability essentially oops flip that one yeah so three years or four years a go now we built a blockchain um a very nice blockchain to capture and communicate data uh it was a side chain of ethereum now we built our own using GI nodes and we capture company level information and product level information and basically just transfer it down the supply chain so that you have this chain of custody um by the in manufacturer generally we connect it to the to the physical world using QR codes but obviously with like high value

materials like gold we actually use more advanced tracking tracking me mechanisms so so we had this beautiful technology this uh this blockchain um but obviously we know technology is no good without an application so we wanted to figure out who is the key stakeholder in sustainability who should we be worrying about who should we be thinking about when when we're starting to to use this application and at the time we thought sustainability starts with governments or maybe more specifically government regulation now my co-founder actually started mind spider with the idea of the Dodd Frank act in mind so there was a section 1502 that basically said if you were sourcing from the Democratic Republic of Congo the DRC you had to do your due diligence so you had to go

there you had to figure out that your minerals weren't coming from a conflict mind and uh essentially instead of doing that companies just stopped sourcing completely from Congo so there was this embargo essentially and Nathan my co-founder was like there must be a better way there must be a way of doing this that we can capture the information that these companies need so we don't you know stop supporting and buying from some of the most poverty-stricken areas in the world um and we also last year we have the EU conflict mineral regulation that came into effect in January so basically the same thing for for 3tg minerals so here's me down in Rwanda at a tin mine well at a at a cidate mine which is one of the elements that goes into tin and what we did here is is basically track um tin with all the due

diligence requirements to um Google and to many of their clients of of Luna's clients in the EU so that was you know I went there for a month we we understood what information they actually already collect we collected a lot more a lot more due diligence documents and then connect it to the um to their ten ingots using these QR codes on the these basically uh on the blockchain so that was a success you know the product they still check all this information to this day but we were left thinking okay these guys they have to provide the compliance data but they're not actually the ones who use it who uses it well that's the downstream Brands that's your your Google's your system goes your Volkswagen so we

decided to Target them next and actually we went into Volkswagen Volkswagen was having a couple of issues um at the time one of them was lid and essentially we went into their lid Supply chains and we tracked well we we've discovered 1,000 supply chain participants and just to give you an idea of the scale they have 40,000 minerals so this lead is just one of them um and we tracked that lead through 13 different Supply chains and most of those Supply chains were about 14 t is deep now le is also a mostly recycled material so about 90% of those were like circular Loops um but you can imagine now you start to see some of the complexity that you have to deal with when you're thinking about these these kind of traceability projects the next one was um was tin from Menor s raire

mine in Peru so this is actually the third biggest Tin Mine in the world and we track that to to Google Cisco Volkswagen um and we worked with SS which is like a an assur verifier of the data so again that was a in in all ways a success and and we kind of started coming up with these things in the in the software like a certificate history tree so they could see exactly where the minerals were coming from and and understand you know if you see the little exclamation marks here this is meaning that it comes from a Cara region so a conflict affected or high-risk area so you know companies could start to have an overview of of their supply chains and where the risks were but we still now we now we were doing compliance right and and we wanted

to move move to the core of companies businesses like how do we become integral to the operations and we thought actually on the world stage producers are very much invisible so they produce Commodities and we wanted to give them an opportunity to decomod their products so if they attach information like traceability carbon emissions and so forth and responsibility audits to their minerals that they could actually sell them at a premium you know at the moment gold produced in a conflict m in Africa is sold for exactly the same price as gold from a actually a nice Community run project say in Peru so we wanted to decomod their products and for this we we packaged it as a product passport so actually you

don't have it on these screens but in a product passport you also have like a profile of a company you have videos you have photos it's like a beautiful overview of um of the producer end so the Mind smelter end and they can track these down the supply chain um to Downstream clients now the success for us is seeing that some of our clients actually get new clients so Min sorry Luna smelter which I mentioned before all their products go out with a product passport now and they actually have gained two or three new clients because of them offering this information to Downstream clients for instance one of them is a a recycler that uses the tin slag which is like a remnant of production in um other refining processes in Germany and the same from meno so now

all their Tim shipments go to Germany with with these product passports and we also have Pro projects for instance for copper in Chile gold in Peru tin tantum tungsten in Liberia DRC and um and Rwanda okay but we got to the point here and actually on the on the right side just as a side note you can see um a battery passport so that's also evolved to support the automotive industry um which we know has a lot of pressure on it to you know track everything at the moment and understand how to recycle batteries better but yeah we we'd got compliance we'd finally understood how why people want to track things you know why they want to showcase sustainability but the question was for me then to who why who are they capturing all this data

for and as a marketer I um I use a methodology called jobs to be done so it's basically instead of looking at a target market and thinking like okay male 45 likes to watch movies at this time of night that kind of thing you look at what job they do and you think about what metrics they have to perform on um and basically help them to perform on those metrics and you think about what their actual job is so I was thinking okay all these all these people that we work with these head of sustainability these CEOs who are they reporting to and the answer is actually investors and we know that money talks right we know that that any change that you know truly comes around is probably bought around by money um and I think it would be n to ignore that and we also

know now that um that the big change makers for instance Black Rock one of the the biggest um asset management companies in the world has kind of you know said that all of their investments will be ESU friendly moving forward so we see this en entire shift taking place globally which is really to one of of a sustainable world and not just a greenwash sustainable world but one of a fully tracked you know with complete data um sustainable world but there is still some issues um when it comes to sustainable investment you'll hear a lot of discussion about ESG metrics um and people you know in effect saying that they're again greenwashing a different form of greenwashing um but probably the biggest

discussion at the moment in terms of sustainable investment is around scope three carbon emissions so scope one is is the the direct emissions from your actual operations as a company scope two kind of takes into account like your NG cost and so forth and scope three is actually tracking along your entire supply chain and very very few companies I would say if any in the world actually know the scope three emissions um um but you can think of this as probably the biggest threshold that we have to overcome to reach carbon neutrality because if most of production in the world happens in developing countries right because of it it's a cheaper cost base so usually production is pushed to these developing nations and yet they are not you know doing a great job of offsetting and yet

companies in in developing countries aren't taking responsibility for their entire Supply chains and helping along with that with that process so we really see that as as the frontier of um of of sustainability essentially yeah so nowadays our focus is very much on not only tracking the the products and the origins of the products and ESG metrics but really on on scope three carbon emissions and helping Innovative companies essentially be at the Forefront of this this world where we have fully tracked sustainable data I think that is all from me I still have four minutes so if anyone has any questions for me I know I don't know if for do Q&A okay anyone

yes so the the cost of putting data on blockchain is actually not high at all um you know I mean essentially most of these Minds will will capture information anyway and are we actually digitizing it most of the time they're usually doing it in in like in Rwanda at least they're doing it in pen and paper so we're actually also improving this the efficiency of the processes we haven't yet calculated like the ROI or the premium at which they can charge it's a bit abstract right um but we definitely see it and that they're winning new clients but I I really hope one day we can actually say you will earn a million dollars more a year from having this this technology it's my goal at least yes sure sure sure so the question was if

we're linking um basically like our carbon em scope three emissions to carbon credits um generally we don't um at the moment um it's something we could do in the future I think there's a lot of amazing startups who do that excuse me in some format already and we could probably just connect it um with them with na but it's you know you only want to tackle One Challenge at one time to be honest and traceability is already a big one thank you anybody else y I really love the IDE toate orins differents on what level will I mean really difficult how do you enable that

on what level do you do level great question so saying what like kind of on what level do you enable product passports so originally we actually did this kind of linear you know A to B tracking um or ABC let's put it like that but we found if like party B would drop out then you know the the chain is broken um so now we actually focus more on kind of like a hub and spoke model we capture information at company level for companies who participate and at a product level you know to get that traceability but we believe that like all data is is good data so it's actually more about like just trying to get as much as possible um and less about the super strict linear traceability like a lot of our competitors I would say focus

on y great question so how do I how do we confirm that the material leaving the mines is the actual material going into the blockchain um so this is called chain of custody so usually this is actually already done by um providers such as ity for instance in Africa um they've come come under a bit of fire recently for product laundering um for laundering minerals into the system from the DC for instance what you generally do is you bag and tag at this stage so you take minerals out the ground um you put them immediately in a bag you tag it with like a firm tag that can't be removed and then that's all noted down that's uh well at the moment we we scan a barcode and that goes into the system

and then it's weighed at the mindsight um and made sure that it's the same um grade of mineral as well so it goes to the lab and you check the yeah the mineral composition because every mine has a very different mineral composition so you can actually tell very quickly if it's come from another area so those are some but obviously it depends on the mineral for gold for instance you have to track it even more thoroughly because it's it's obviously you know got a high price so that's just for tin for considerate cool okay then I'm going to take my earring back and thanks for having me wonderful Ella thank you so much