MARCUS SCARAMANGA Prevailing lack of trust prevents much-needed products and services from flowing to supply sites
Small-scale miners require market access, capital and expertise to continue to mine and grow their operations, while buyers require traceability. The lack thereof often results in buyers not trusting small-scale miners, which creates a barrier to entry.
UK-based technology startup Minexx notes that blockchain traceability and trading platforms offer miners the ability to increase transparency and trust in the marketplace.
Minexx CEO and cofounder Marcus Scaramanga explains that the company
evaluated how it could create trust between stakeholders to allow for the flow of goods and services that could lead to the formalisation of the sector, which, in turn, was critical to supplying the minerals needed in the future.
Consequently, Minexx successfully exported 11.62 g of gold from the Obeng mine, in October last year. For the first time in Ghana’s mining history, the company’s blockchain platform was used to make the exported gold fully traceable.
The traceability and trading platform consists of three sections – Minexx Trace, Minexx Capital and Minexx Expertise.
A major challenge is reaching miners that are based in rural areas.
To mitigate this challenge, Minexx partnered with international civil society organisation Solidaridad Network, which allows the platform to access the mines with which Solidaridad has already engaged.
It
also collaborates with partners such as governments, private sector entities and nongovernmental organisations.
Scaramanga explains that governments that want to launch national buying programmes to sell gold on the international market must adhere to the international market’s traceability requirements. By partnering with governments in particular, the platform can be used to monitor and regulate employment-creating small-scale mining and, potentially, prevent illegal mining, as well as meet other challenges, such as detrimental environmental impacts and social unrest.
The demand for traceability is increasing globally as new regulations are introduced to address changes in the mining sector and align with corporates’ environment, social and governance (ESG) goals and values.
Further, the data, and the mine site itself, is assessed against a range of ESG risks and the blockchain platform can make certificates of the data entered at source.
The platform can be used to record daily transactions, including information such as when the minerals were produced, the quantity produced and where it was sold.
It
also records and digitalises payments.
The platform can capture offline data, which will be uploaded once there is an online connection, and
miners can use it to access offtake and equipment financing.
Minexx
is currently working towards having the platform accredited with the Organisation for Economic Cooperation and Development, as part of its responsible minerals’ initiative.