Blockchain and conflict minerals

by Lumai Mubanga

African is well known for its mineral wealth many of which is rare, expensive, and in high demand. However, Africa is also well known for civil strife especially in areas where these minerals are found. Notable among these are congo, Rwanda, Sierra Leone, and Mali.

One mineral that was recently classified as a conflict mineral is tantalum. Like its predecessor diamond, commonly referred to as blood diamonds because of its bloody stained sources, tantalum is a rare, rich mineral resource on high demand. It is used in the manufacture of capacitors used in smartphones and laptops. It’s a rare precious mineral that has attracted a lot of instabilities in areas where it is mined. This is why it was included in what is referred to as conflict minerals.

The main challenge to importers of minerals is the source. Importers are concerned about the bloody sources of these minerals. In congo, for example, tantalum is usually smuggled from conflict-ridden mines controlled by warlords who usually enslave women and children in the mining process. How would imported then know whether these minerals come from Rwanda or war-torn congo?
The solution partly lies in improving the traceability of the resource end to end. Thus, the OECD, EU, and the USA named tantalum a conflict mineral in order to improve its traceability. Regulations were formulated to enforce this but it was not successful. No one could prove with certainty where the mineral was coming from. Blockchain technology, however, changed the whole ball game.

Enters Circulor a Hyper ledger member

Circulor is a hyperledger member specialized in creating blockchain-based solutions with regard to supply chain management. IN collaboration with the Rwandan government, which is the highest producer of tantalum, Circulor designed an application to ensure that the tantalum was mined, transported, and processed under OECD approved regulations. These regulations stipulate among other conditions that conflict minerals should only be transported from conflict-free zones, mined under safe and transparent conditions. The Rwandan government and mine operator known as the Power Resources Group wanted to prove that every bag of tantalum ore from Rwanda was mined, transported, and processed under OECD approved conditions.
This is how circulor, UK based technology company, created a blockchain-based system to achieve that objective of tracing unbroken custody of tantalum end to end.

How the system works

After engaging stakeholders such as the government and miners, an application was developed, tested, and implemented. At the core of its functionality is to map the entire supply chain and create full proof processes to build on the permissioned blockchain, particularly hyper ledger fabric. The system uses facial recognition and QR codes to authenticate the source. The immutable nature of blockchain data renders it difficult for such data to be tempered with. Along the supply chain is a full proof mechanism that ensures there is unbroken custody of the commodity end to end.

Finally, a blockchain-based solution of supply chain traceability went live in at least three mines in Rwanda in 2018. The system has brought a lot of benefits among them reduced the high cost of compliance mechanisms, reassured consumers, and a steady stream of ‘clean’ revenue for the Rwandese government. As pointed out in earlier articles, Africa has much to benefit from the blockchain technology. Once fully realized and implemented, many will say “Thanks to the blockchain”.