Switzerland-based online metal concentrates exchange Open Mineral is looking to join the blockchain revolution with a decentralized system for minerals trading and logistics. Called Minerac, the project will come alive as a result of Open Mineral’s partnership with the U.S. blockchain start-up ConsenSys, as well as a consortium of mining companies and financial institutions.
What Minerac is all about
Simply put, Minerac aims to rely on blockchain to streamline global mineral trading operations. As explained on Minerac’s website:
Minerac’s vision is to create a secured, trusted, and seamless global mineral trading ecosystem on blockchain. Minerac brings the mineral and metals industry together by helping to develop smarter processes to better share information, increasing efficiency and profitability.
According to Joseph Lubin, co-founder of Ethereum and founder of ConsenSys, Minerac will offer a solution “where all parties involved in the supply chain will benefit from digitization, secure data collection, the seamless exchange of data and immutability of their records, made possible by the Ethereum platform.”
The system would rely on sealed bags of minerals, stamped with tamper-proof identification to allow them to be traced and help ensure that they are coming from compliant and conflict-free regions.
Key benefits of Minerac
Thanks to the use of blockchain, Minerac will enable parties that do not know each other to efficiently swap information in confidence. The system will keep all communication records, connecting them to a corresponding transaction.
Furthermore, Minerac users will be able to manage their post-trade operations through a single platform, while optimizing logistical operations.
The system will deliver a single, secure source of validity; thus reducing time spent on data exchanges, manual reconciliation, and 3rd party verification through a synchronized and decentralized network.
In addition, Minerac will provide full trade finance solutions by interconnecting with leading trade finance platforms on the Ethereum network, to ultimately deliver significant post-trade efficiency gains and trade finance savings to stakeholders.
“Logistics are complex, financing is difficult to acquire and the entire process is very paper heavy,” Open Mineral’s Chief Executive Boris Eykher said in a statement. “Thus, the industry is primed for blockchain disruption to simplify the trading process, (and) increase efficiency and profitability.”
Things are rolling…
Since launching last year, Open Mineral was able to relatively quickly engage users, offering them an online platform that cuts out the middlemen and saves money on deals for concentrates. The organization was created by a group of former traders from commodity house Glencore, who obviously know the market and key players.
Unsurprisingly, some mining firms have already signed up to the consortium while discussions are underway with other miners and financial institutions.
On the other hand, ConsenSys — which uses the Ethereum blockchain platform — knows how these sort of services work; it has already set up consortiums for the oil industry and trade finance…