Blockchain technology has been disrupting various industries, but the mining industry will be one of the biggest beneficiaries. Thanks to its data encryption, immutability, and digital ledger, blockchain can address several issues in the industry by providing security, transparency, and changes to business models. It can fundamentally alter the supply chain model and reduce the industry's vulnerabilities that create room for corruption and the trafficking of minerals. The question is how blockchain can affect supply chains in a paper-based industry.
One of the biggest problems in the mining sector is transportation across chains - how minerals can be transported from point A to point B in less time with minimal paperwork. The commercial and operational aspects of the traditional mining system are costly and time-consuming. Not only is this model expensive, but antiquated and can affect the working conditions of workers as well.
For example, once the ore or mineral is extracted, it moves through various mediums, such as smelting factories, banks, and cargo ships. Each of these mediums must verify the mineral through some documents – a cumbersome process that can leave room for data omission leading to fraud. So, in the end, millions are lost, and there isn't data transparency.
Then there's the trading aspect, which is still archaic. The trading is so elementary that the buyer needs to call the seller all the time to get updated about the current location of his purchased minerals. On the other hand, the seller must always manually check the goods by contacting the intermediaries involved in the transaction. That is after checking if a contract exists between the parties. These processes consume time and won't create much value for everyone. It will only increase the time needed to move minerals from point A to point B.
The involvement of multiple intermediaries and the need to forward several documents in cargo shipping can prolong the delivery process. In some cases, the cargo is held up at port because the documents required to redeem the goods are yet to arrive. When you add this to the finance and surveying certificates needed to certify the grade of a commodity like granite and graphite, there will be further delays in supply chains.
Another prevalent issue with supply chains is that different resources mix, making it difficult to trace the provenance of minerals. Of course, the problem is attributed to the manual process of tracking the minerals. This issue can be solved through blockchain, which provides a platform where tracking of ores will be facilitated, and OECD guidelines are followed. This will build trust and foster greater collaboration amongst industry players.
You will agree that the cumbersomeness of supply chains in the mining industry lies in its manual process, which is entirely paper-based. However, the process will be much quicker if the industry employs automation through blockchain. Blockchains use smart contracts that can automate all these manual processes, which eliminates intermediaries and helps transport more minerals much faster. In addition, automation will reduce the possibility of fraud in trading and increase transparency.
In addition, blockchain will reduce paper documentation and manual processes from the extraction point to the end buyer. This will save costs, lead to more robust security, and expedite the transportation process.
It’s hard to trace the source of minerals like granite because they are scattered across different locations. They are processed through many companies before the end of the supply chain. Blockchain will bring more transparency, traceability, and provenance to the industry.
The following are ways blockchain can positively affect supply chains.
Blockchain will drastically reduce the amount of physical paperwork required to redeem a commodity. In addition, because all the information is uploaded to the blockchain, it will aid in tracking and minimize the chances of omitting vital information.
The nature of the blockchain ecosystem makes it easy for participants to be notified of transactions' developments simultaneously. Moreover, because there's less paperwork and intermediaries, consensus is reached faster on trade terms like shipment schedules and payment details between parties. Besides these, the number of disputes should also be reduced, which makes resolution more convenient.
In a typical broad value chain consisting of mines, smelters, financial institutions, shipping companies, and warehouses, all the players involved will be aware of the current situation of the commodity simultaneously. Blockchain ensures everyone is on the same page, which drives compliance and innovation.
This encrypted technology can be used to develop applications that provide end-to-end tracking of minerals from extraction to the end buyer. The process would require the container of bags of minerals to be stamped with a unique identifier that will be uploaded and tracked by the blockchain. The ID will have all the information about the mineral, including its current location. This will eliminate future conflicts and reduce the risks of mixing the mineral with other commodities.
The future of blockchain in the mining industry is still undetermined. The industry is still observing the potential impact of the technology on its supply chains. However, blockchain has compelling use cases for mining and supply chains. Early adoption of blockchain will save costs and improve value in supply chains. This is why the mining industry should wait no further in integrating blockchain.
A blockchain solution focused on addressing the issues in supply chains is Metallika. This company uses smart contracts to ensure the traceability of ores and enforce compliance. In addition, it provides all participants access to all the information regarding the mine for better transparency and increased security.
Besides tracking commodities, Metallika also ensures equal participation in the industry. Investing in mining is capital-intensive – only the affluent can afford to venture into this profitable business line. Still, the blockchain solution wants to change the narrative by allowing everyone to invest in the industry and enjoy profits. This will be done by purchasing the Metallika token.
The company has collaborated with several mines globally to ensure sustainable and profitable mining. Currently, the company is developing its granite, graphite, and beach sand mines. These commodities have huge earning potentials due to their wide range of uses. So, investing through Metallika allows you to earn passively.
Invest in any of Metallika’s mines by purchasing METALLIKA today!