Blockchain For Traceability In Minerals and Ore Supply Chain

The issues that need to be addressed

• 1. How can a massive amount of data be recorded for daily work?
• 2. How can they be securely kept from any tampering or destroying?
• 3. How can they be updated and accessed based on a real-time frame?

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Barriers to traceability in the metals and minerals supply chain

As a first part of its research series on traceability, ICMM conducted a study on the challenges and opportunities for traceability of materials in metals and minerals supply chains. Through its own research, RCS Global has identified further challenges to robust CoC systems. The following presents a summary of these challenges:

Underlying factors

There are two underlying factors that make it difficult for companies to design robust CoC systems that are able to respond to downstream demands:

• Non-standard, unilateral customer requests for information: Downstream buyers often request specific information from refiners, smelters, traders, and mining companies in an ad-hoc manner with their own forms and questionnaires that is different from information requested by other downstream buyers.
• No broadly accepted material control standard: Furthermore, CoC systems require a material control standard. However, there is currently no broadly accepted material control standard for the mining and metals industry as a whole .

These underlying factors add to the following implementation barriers:

Implementation barriers:

• Points of aggregation: The minerals and metals supply chain features important material aggregation points – primarily at the smelter/refiner level – where minerals and metals from different sources are combined.
• Points of transformation: Minerals and metals also undergo several processing stages along the supply chain, including crushing, washing, grinding, separation, etc. (depending on the supply chain) during which product characteristics such as size, weight, grade, and price change.
• A lack of technical capacity: Technical considerations like language, availability of suitable personnel and non-centralized record keeping can all be obstacles, particularly in smaller and fragmented supply chains.
• Confidentiality concerns: Information about suppliers can have competitive implications for actors in the minerals and metals supply chain. Thus, there may be a reluctance to share supplier information or identities.
• A lack of standardized CoC documentation and digitization: Research found that CoC documentation between supply chains varies. Furthermore, most CoC systems are still paper-based, which means that there is no central digital database that could be accessed by downstream customers. It also makes CoC systems susceptible to fraud or incorrect data entry.
• Administrative and governance costs: Costs for implementing a robust CoC system are also quite high, in part due to responding to unilateral requests for information, but also because implementing a sophisticated system that is able to handle the amount of data required as well as audits are costly.

While technology-based traceability solutions, such as the Geotraceability-enabled Better Sourcing platform, exist, blockchain features several significant advantages.