Combating Illegal Mining and Mineral Theft with Blockchain Technology

Thanks to data encryption, blockchain technology will bring transparency, scalability, and traceability to the mining sector. Read to learn how this technology will help combat illegal mining and mineral theft in the industry.

Illegal mining is an activity that's undertaken without state permission. Illegal miners conduct explorations on lands without mining licenses or other necessary permits. This act can be artisanal or large-scale mining, led by mining syndicates. Illegal mining is arguably the most talked-about issue in the mining sector. Billions of dollars have been lost to mineral theft. Approximately 80% of small-scale mining activities are illegal. This act is common in Sub-Saharan Africa and Latin America.

Illegal mining in Sub-Saharan Africa is spurred by poverty and a lack of income-earning opportunities. Although government opportunities for small-scale mining are available, the lack of bureaucratic structures can make it more appealing for workers not to comply. As a result of this non-compliance, not only will the government lose money, but communities will be affected by the effects of illegal mining.

In Latin America, illegal gold mining is the case due to organized crime and other mining syndicates that want to capitalize on government lapses in remote areas to extort. These actors falsify documentation to ease transportation to the international marketplace. The effect of their actions is environmental degradation.

Environmental degradation isn't the only effect of illegal mining. Trafficking precious metals can affect stability, security, and peace. Besides, illegal mining is often accompanied by human rights abuses, tax evasion, and corruption. Due to the lucrativeness of mining and trafficking precious metal alongside the low risks of being arrested, criminal groups and syndicates are exploiting the industry.

International governments and organizations have stepped up efforts to combat these crimes. For example, the Economic and Social Council (ECOSOC) adopted a resolution in 2019 to combat illicit mining by enhancing security across supply chains through technology. ECOSOC believes that strengthening law enforcement and prosecutorial support will curb trafficking. However, this strategy can only do so much. To effectively enforce this strategy, you need to integrate blockchain technology.

Blockchain's encryption and digital ledger make it relevant to mining. These features are ideal for combating illegal mining and trafficking. Due to its immutability, it is secure and transparent. This is why many industries are adopting blockchain technology. The mining industry could use blockchain technology to enhance security, ease transactions, track minerals, and ensure compliance.

How Blockchain Can Combat Illegal Mining

1. Ease Compliance

Social irresponsibility is still prevalent in the industry despite the policies employed to ensure compliance. A CNN report reveals that child labor is still prominent in DR Congo. Illegal miners leverage the loopholes in government policies to mine minerals using children. Blockchain will make mining companies responsible, adhere to government regulations, and make compliance less complicated. All companies will stay updated with all the rules. Because the regulations are embedded on a blockchain as data, it eliminates the possibility of circumventing the law. All parties involved in mining can be confident the data will stay updated.

2. Traceability

Illegal miners are prominent for falsifying documents to help traffic the minerals to the international marketplace. Due to the amount of paperwork involved in the mining process, sorting it manually will leave room for forgivable errors. The players in this illegal mining understand that scanning and verifying documents are cumbersome. With blockchain, sorting through papers is easy because paperwork is reduced drastically.

Blockchain's most significant growth potential is to help the industry improve transparency, especially across mineral supply chains. Through blockchain, the government can effectively monitor the transaction process from the extraction process to the transportation point. One way the government can achieve this is by engaging in data sharing. For example, it can partner with as many shipping companies as possible and enable them to have a unique identifier that will be used to label minerals shipped through them. Blockchain can track the number and verify the source of the ore or mineral.

The government can pass a bill requesting that any mined mineral be stamped with a unique identifying ID that will be logged onto the blockchain. The ID will contain all the necessary information about each one. Forged identifiers will quickly be exposed, thanks to blockchain adoption.

The Role of Metallika in Combating Illegal Mining

Metallika is a blockchain-based mining company focused on covering the lapses in the mining industry and bridging the gap between mining and investing. Metallika seeks to enhance supply chain transparency and ensure that participating in the industry is not influenced by moneybags alone. This means everyone will be allowed to invest in the industry. This will be fostered through the Metallika token.

As a blockchain solution, Metallika will certify all mined raw materials for the industry and store all data regarding the mine. This makes it difficult for illegal miners to traffic materials. Because it's paperless-based, the chances of manipulation are reduced. Fewer errors are recorded, which increases the security level significantly.

Currently, Metallika has partnered with some mines in different locations. The company focuses on mining granite, graphite, and beach sand - three minerals that have huge earning potential. In addition, the company provides data and insights about each mineral and facilitates tracking. These partnered mines make it near impossible to smuggle minerals or carry out illegal exploration, which provides investors with peace of mind.

Metallika is exploring more territories to create a sustainable business model through its partners like GeoActiv & IDC Drilling. It will create more avenues for investments, which we are certain will please investors and the community. To bring more transparency to the mining sector, governments can collaborate with Metallika. The synergy will end illegal mining and generate more money for the government. Money lost will go into the government's purse when illegal mining is curbed.

Conclusion

For the mining industry, blockchain can create transparency and streamline transaction processes between parties. Illegal miners have long trampled on the government's intelligence to make money trafficking minerals through child labor. With blockchain, not only will illegal mining be curtailed, but better practices will be ensured.