WHITE PAPER

BLOCKCHAIN
Understanding the Practical Applications
for Mining
 This whitepaper has been written in association with Mining Journal

Technology has transformed the mining One of these is Blockchain. House Rules, which meant the identities
space and it has been a rough ride for a of those contributing must remain
With this in mind, Mining Journal recruited
sector that has a well-earned reputation as anonymous. However, we are able to
a laggard among industries. Mining may a leading global technology consultant, publish the experiences shared and the
have pedigree, with its roots in the Bronze Infosys, to partner in a blockchain broad round-table findings.
Age, but with direction and momentum round table in Toronto in early March.
Like the round table itself, those reading
established over some 5,000 years it also Contributing to the session were a
this report will have a range of experience
has the turning circle of the QEII. But this is mixture of senior executives from juniors
with blockchain and, so, it is worth taking
changing. Though the sector is still far from to genuine majors, with varied levels of
a few moments to establish the basic
agile, it is embracing innovation, largely blockchain understanding and experience.
principles of blockchain technology.
in the form of new technologies. Process
The idea was to establish the level of
automation and Big Data, which many The most celebrated example of
understanding around blockchain and
predicted would be gradually introduced, blockchain technology is Bitcoin. Its
determine the use cases showing the
have arrived with a bang and are now founder, Satoshi Nakamoto, described the
greatest potential for disruption.
verging on common practice for new technology as a “chain of digital signatures”
mines. Other technologies are emerging The session was run over two hours and but, to the layman, blockchain is essentially
with perhaps equally disruptive qualities. participation was based on Chatham a type of database.

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There are two key differences between happens in real time and so increases encryption sequence becomes and
blockchain and a more traditional transparency, efficiency and security the harder it is to corrupt, or hack. This
database, which make blockchain unique: among network participants. cements the integrity of the data.

1. Transactions entered into the database 2. Entries to the database are secured It could therefore be described as
are copied and distributed to all by encryption and agreed through a far more secure and trustworthy
participating stakeholders on a network consensus mechanisms so the network database, which is shared across network
that have to approve the transaction, flags up false entries, which ‘break participants.
rather than held by a centralized the chain’. The longer the chain of
hub that acts as the regulator. This entries (chain), the more complex the

Distributed Shared Data

Reduces single point of failure, eliminating need to reconcile
Trust &
Transparency
Increased
Collaboration Immutability Of Transactions
Ensures Trust

Faster
Transactions
Improved Permissioned
Compliance & Confidential information shared on need to need
Audits basis, provides enterprise users flexibility

Disintermediated
New Consensus mechanism ensures security and
Business trust by removing intermediaries
Models
Reduced
Costs
Smart Contracts
Reduced Facilitate automated interactions across
Risk functions and processes

There are two types of The second type is private, permissioned

blockchain and followed once business
Blockchain.
acknowledged the potential of the
The most widely known is public technology.
blockchain, which is the basis for Bitcoin
A private blockchain establishes a discrete
and other crypto currencies – the first and
network of known participants, usually
most widely known implementations. “We believe that mining industry will
across a number of organizations related
This allows anyone with the appropriate see accelerated adoption of blockchain
through business. Data uploaded into
software to read or write data into the in 2019 as the technology matures from
the ledger is validated by a set of rules,
database, or ledger. implementations in other industries. As a
usually established by a contract and/or capital intense industry with an elaborate
Public blockchain has its own system confidentiality agreement. This is most partner/supplier network, blockchain
of data consensus or validation that, applicable to mining. can delivery business value in the near/
unhelpfully for those in the mining sector
The uptake of private blockchain in long term with contracts management,
trying to understand the technology, has provenance, supply chain traceability
industry has been primarily as a lubricant
been termed ‘mining’ – despite having and many more use cases for mining.
to make current practices more efficient,
nothing to do with the actual mining Understanding the source of business value,
where multiple parties can transact
industry. Thankfully, the opportunities its distribution amongst participants, and
faster because of real-time data and
most applicable for this discussion do not long term incentives are fundamental to any
transparency. The opportunities, however, project’s success.” – Srikanth (Sri) Challa,
use this type of blockchain.
appear far more expansive. Senior Director, Infosys Blockchain

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 Where is Mining in its Blockchain Technology Journey?
Blockchain technology was introduced relevant and the opportunity was exciting’. Case Study 2
about a decade ago as the basis for crypto Tellingly, however, a third said they didn’t Another major miner trying out the
currency. Most industries looking at private understand what blockchain was. technology across multiples areas.
blockchain applications, meanwhile, are still The greatest near-term opportunity
Several round table participants were able
in the proof-of-concept phase, though there was seen as working with government
to share practical case studies:
have been successful implementations. on land title and tenure pieces, and
These are being led by banking, where environmental projects like a shared
financial institutions have come together to Case Study 1 ledger for water management. This would
form consortiums and are seeing success by A major miner trying out the technology increase transparency as well as improving
integrating blockchain with their existing across multiples areas. administrative efficiencies.
production systems. One core implementation has been to The other opportunity was supply-
The mining industry has the opportunity work with banks and vendors to limit the chain visibility for suppliers of parts and
amount of cash reserves required on hand maintenance, as an efficiency mechanism
to be a fast adopter, and it would appear
at any one point to facilitate payments, to reduce costs. This is similar to the first
the appetite is there.
and therefore increase the company’s case study where bringing parties together
Mining Journal surveyed its readership on a network would increase visibility,
working capital. In theory, a transparent
to understand how relevant blockchain efficiency and accountability. This was
ledger would allow the bank and vendors
was to mining, according to industry expected to have a direct impact on the
to anticipate the need for funds and make
professionals. The volume of responses bottom line.
transition of funds from the company to
received in less than a week – 703 – Both case studies 1 and 2 were in the
the vendor more efficient.
showed that, if nothing else, great interest proof of concept stage and were among
in the technology. The other key application was a customer a number of new technologies the
network so transactions become simpler majors were assessing.
Of those 703, only a quarter said blockchain
and to give them more visibility over the
wasn’t relevant to mining, while 40% said
quality and source of the ore.
it was either ‘quite relevant’ or was ‘very Case Study 3
Junior commodities trader, formerly a
mineral development group.

The company encountered a number

of challenges attempting to implement
blockchain technology in geographies
known for conflict minerals, namely
replacing incumbent paper-based
databases with cloud-based systems.

The company is currently working with

artisanal mine sites on establishing a chain
of custody. This starts with ring-fencing the
site with strict access controls so there’s
identity provisioning. The chain of custody
incorporates GPS data as products are
moved from regional depots to an export
center, before exiting the country.

Combined with what we understand from

media reports, it therefore seems the
number of successful implementations
in the mining space are few compared to
banking, for example, but the interest and
exploratory work is at a level to change this
in the near-term.

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Near-Term Applications parts traceability and maintenance time-stamped life of a piece of equipment,
requirements, and contract management. signed off by network participants makes
The round table made it clear there
the auditing process and liability straight
were areas of the mining industry that Spare Parts Traceability and
forward and irrefutable.
represented low-hanging fruit in terms of Maintenance
obvious areas where blockchain should, At a day-to-day level, having local spares
This is applicable from both an auditing
theoretically, make a big difference and manufacturers, local suppliers, OEM spares
standpoint and in limiting downtime.
the execution should be, relatively, straight manufacturers and OEM suppliers on one
How regularly servicing was completed network database that an operator can
forward.
and by who; which parts have been plug into means the need to replace parts
These core areas centered on improving replaced and how regularly; and which for scheduled maintenance is visible to all
efficiencies of basic business functions faults are registering most often are stakeholders and the people needed to
and transactions to cut costs. Most of important when something goes wrong, do the work are in place to execute. The
these focused on bringing elements of particularly if it is a serious accident
downtime on a parts failure is also reduced.
the supply chain together on a network (particularly fatalities). Having an
and were, in principle, derivatives of immutable database that shows the full,

Example: Inventory visibility for mine and mill maintenance

Operations Parts retrieved Part provisioned for

Maintenance Team Stores in charge from local inventory servicing equipment
Drill jumbo slurry Yes and routed
pump breaks down Defective
Mechanics/ Inventory
spare part
engineer’s check for
reported to Checks with the OEM
inspection done spare part Parts Available
team No OEM manufacturer supplier
In Local
Inventory
Drill umbo/ slurry Stores in charge
pump scheduled
maintenance Checks with the Local suppliers
local manufacturer
Time delay in
communication Checks with commercial department
With Blockchain: for PR/ PO status

Local spares Local Improved inventory visibility with Blockchain

manufacturers suppliers Knows where the required spares are and can connect with the
Stores in charge right person to expedite the process
Parts Available
External Team knows the exact Part provisioned for
In Local Blockchain Network
No sourcing lead time of the spares servicing equipment
Inventory

OEM spares OEM spares

manufacturer suppliers

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 Contract Management smooth the process and resolve or mitigate which can result in poor execution or
objections. Examples include maintenance miscalculations and increase man power
This includes a variety of contracts but is and legal costs. Blockchain technology
contracts, equipment contracts and labor
most advantageous where more people automates the contractual executions to
contracts.
are involved; there are time-sensitive keep the process on track and objections
elements; and delivery is dictated by The challenges in executing on contracts to a minimum, and improves trust between
performance, so an irrefutable ledger can are generally around human intervention, stakeholders.

Contracts management using smart contracts

Employee Attendance Employee hours data Employee Attendance

Records Initiate Records
IoT equipment Payment
availability & work
Maintenance Contract Maintenance Contract
hours data Funds
Management Systems Management Systems
Transfer
Blockchain Payment
IoT equipment Network Gateway
Equipment Contract
Equipment Contract availability/ usage data Management Systems
Management Systems
Payment
Details
Inventory Management
Inventory Management Procurement Details Systems
Systems

Reduced Contracts Automated Contracts Improved Vendor Increased

Verifiable Audit Trail
Management Cost Management Management Transparency

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Provenance though the feeling at the round table One current model being piloted is
was this would spread across the mineral the isolation or artisanal workings and
Provenance was a challenge almost the tagging of samples for GPS tracking,
spectrum and so would soon be more
immediately targeted when blockchain as touched on earlier. Integration with
stringent than US law.
technology emerged but, while the bar-code scanning and GPS needs to get
ambition remains, the application has The other driver is the financial benefit better for full implementation but it’s an
proven difficult so far. of being able to show proof of mineral attainable goal.
integrity, which in the agricultural sector Beyond the industrial applications of this
The main driver of provenance-based
secures a premium for the seller. Those for corporates in proving provenance,
applications is currently US legislation,
close these issues at the round table felt we this has health and safety applications in
namely the Frank Dodd Act, specifically
were some way off this reality in mining. artisanal mining; cost saving applications
section 1502 that requires issuers to
in terms of tracking ore around and
provide a public audit of their supply chain The current database for minerals in many
operation; and revenue raising potential for
on an annual basis if they’re using certain of the places in question is a paper-based governments concerned about corruption.
minerals such as tantalum, tin, tungsten logbook system, which has been tough to
and cobalt. In a similar way – but far more orderly in
dislodge. Downstream participants such
execution – blockchain could be used to
This pressure is being followed closely as smelters have also resisted moving to a
track high-value samples from exploration
by the European Commission, which distributed ledger based on the suspected activity, or monitor samples to potentially
is in the midst of implementing similar overheads of setting it up, while they ensure market-sensitive results are not
requirements for conflict-related minerals, remain skeptical of the benefit. manipulated.

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 Longer-Term Applications stringent compliance requirements. only parties on the network with the right
access codes, with groups from the same
There is plenty of appetite for more The security of blockchain feels like it
organization and other organizations
futuristic and far-ranging uses. Regulators, should have cybersecurity applications,
though, for now, the feeling at the round having access to different data, all of which
for example, could benefit based on
table was current cybersecurity measures is on the blockchain, as applicable. This
the simple fact blockchain is an aid for
were doing the job well when applied would ease an administratively heavy
auditing. Whenever you have a compliance
correctly. process, while keeping sensitive data safe.
challenge, putting data on an immutable
distributed ledger is a huge opportunity. Setting up a blockchain as a secure A common element for the round table
This, in turn, may build the trust needed platform for M&A due diligence corporate participants was an ambition
to allow a relaxation of the administrative procedures, however, felt like it may have to integrate blockchain with other
burden currently weighing down small more potential. In such a case, sensitive technologies, which was in line with the
companies battling with increasingly information would be made available to advice from the Infosys experts present.

Systems Of Engagement Imperatives

• Content Aware & Intelligent
• Conversational Human-Machine & M2M
• Mobile First communication
• Augmented / Virtual Reality
Web Mobile IoT Chat AR/VR • IoT Enabled
Regulations

Systems Of Intelligence
Consumer Choice
• Machine Learning
• Vision, Speech, Natural Language
Processing
AI Automation Cognitive Knowledge • Knowledge Services Cost Pressure & Resource Constraints

Systems Of Records Business Opportunities

• Cloud Native, Big Data

• Software-Define Networks Enablers
• Internet of Things
Virtual Big Data SDN IoT DLT • Distributed Ledger Technology DLT, AI, Cloud, Analytics, Web3,
servers Industry Consortia, Open Innovation

Blockchain, as a digital technology, of intelligence like AI enters it into the

should be part of a three tiered blockchain to become that immutable
technology strategy that included source of truth that cannot be tampered
systems of engagement (web, mobile, with. The system of intelligence would
internet of things, chat and augments/ have two roles: validating the data
virtual reality); systems of intelligence captured; and querying the immutable
(artificial intelligence and automation) data already in the system of record to
in conjunction with human cognitive provide intelligent insights.
functions and knowledge; and systems
What Infosys had found in the mining
of record (virtual servers/cloud, big data, Blockchain will play a key role in the
sector was clients wanted to be vertically
software-defined networks, and, again, future of mining and we see its adoption
integrated. And, while, generally, the level
IoT). This ‘systems of record’ tier is where in provenance, spare parts maintenance
of operational technology (OT) was good
blockchain sits – a database fed by and contracts management as quick
and the level of information technology
intelligence aggregated at various points wins for mining companies to test and
(IT) was also good, the integration of OT
of engagement. adopt Blockchain technology.” – Ram
with IT was lagging.
Ramachandran, Senior Director –
Something like an IoT device or mobile
Resources, Americas
phone captures the data; and a system

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The Challenges are Real
For all the opportunities, challenges remain
ahead of even basic implementation and
much will be learned from the first wave of
successful executions.

For a start, though the industry has

a broadly changed attitude to new
technologies, many mining folks remain
oblivious to much of the technical
language being used to describe
blockchain theory and practice. Some
participants on the round table were, at
times, noticeably struggling to keep up,
while it is worth harking back to the 33%
of Mining Journal readers who simply don’t
really know what blockchain is.

It’s also worth considering the 26% that

said blockchain was not relevant. That
underlying skepticism combines with
the usual fears of the unknown to make
these first cases difficult to execute. Private
blockchain networks, at their core, require
buy in from participants – the greater the
buy-in the greater the benefits; similarly,
low-level buy-in can make the technology
pointless.

One of the majors at the round table

was working through what it hopes will
become a standardized onboarding
process for its vendors and suppliers that
it hopes to bring into various networks.
That will comprise of education around
the technology and support with
infrastructure.

Another major reported difficulties

reaching consensus between participants
on the rules that would govern the
blockchain. The theory worked beautifully
but at any point when humans were
required to move the process forward,
things became messy.

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 This wasn’t, however, viewed as a fatal flaw, proven. The firm also suggested concerns challenges around scalability and concerns
but rather a challenge to be overcome as of liability and other legal hurdles may around privacy associated with public
the industry worked through its fledgling outweigh the clear benefits possible in blockchain are successfully navigated, so
period with the technology. regulatory applications. all blockchain applications would unlock
the full capacity and security of a mass
Investment bank Goldman Sachs has This is in addition to thinking among some
network.
previously warned of a reticence among who see private blockchain as a temporary
business to take on the technology until flirtation that will be discarded once the

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Next Steps example is the health profession in the US The mining industry is awake to this
where all insurers are required to update potential and there are large and small
One point the Infosys experts were keen to
contact databases for providers, which for a firms alike blazing a trail in step with other
leave with roundtable participants was that
large firm requires some 80,000 phone calls industries to identify and execute on
blockchain was not a silver bullet. Yes,
a month. All firms must do this so there is relevant applications. Those that remain
the technology presented an opportunity
no competitive advantage, while setting up fixed in the past need to be aware that, as
to overhaul several everyday processes
a blockchain to securely share information with other sectors, companies not willing
to make them faster, better, cheaper
updated in real time could save millions to explore these opportunities risk losing
and more secure, while building trust
across the industry. competitiveness.
between parties and removing redundant
intermediaries, but there was a danger in
Source: This whitepaper was written and first published in the Mining Journal
seeking out applications to fit the solution.

Rather, applications should be ‘problem

driven’ with an open mind to considering
blockchain in a mix of potential solutions.

At the same time, and as much as the

industry should not inflate the potential
for blockchain, those 26% of Mining
Journal readers closing their eyes to the
relevance of the technology should be
asking themselves if there are changes
coming that will make their businesses
inefficient or even irrelevant if they haven’t
considered how blockchain could work for
them.

There are two ways of assessing this

potential: a top-line and a bottom-line
approach.

The top-line approach asks if the

technology can offer something that
will create new revenue streams. A good
example is utility companies, which are
likely the only organizations that know if
you live at a given address and are paying
your bills. The core function of a utility
company is to provide power, water,
etcetera, but by leveraging blockchain, a
utility can provide an identity verification
service.

A bottom-line approach identifies

structural (as opposed to competitive)
inefficiencies that can be avoided. The

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