ESG
BLOCKCHAIN
How will help miners meet evolving ESG demands By Alisha Hiyate
A
14 | CANADIAN
MINING JOURNAL
rials back to their origin using digital certificates. Current efforts are moving beyond mere traceability and seeking to attach ESG data to blockchain platforms, providing transparency on sustainability measures – and ultimately moving toward incentivizing and rewarding best practices. Beyond cryptocurrencies In the mining sector, blockchain is already being used to trace materials to ensure they are being produced ethically and without human rights concerns (cobalt, diamonds, tin, tantalum, tungsten and gold). It’s also being used to bring transparency to investing in precious metals, with the security offered by the immutable nature of the blockchain record a big feature in commodities where fraud is a concern. A few examples include: w The Responsible Sourcing Blockchain Network, launched in late 2019, tracks battery minerals cobalt and nickel. The network was built on an IBM blockchain platform and assured by RCS Global Group. The network does not yet include carbon intensity and other ESG data, but there are plans to introduce those metrics in the future. w Startup Circulor has a Hyperledger (open source) blockchain www.canadianminingjournal.com
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t the Association for Mineral Exploration’s Remote Roundup in January, mining entrepreneur – and master communicator – Robert Friedland laid out his predictions for the future of mining. In addition to a more diverse industry, the founder and executive co-chairman of Ivanhoe Mines sees a more sustainable future for the sector – and one in which the environmental impact of mining will be baked into commodity prices. “There will be no more one price for copper. There will be no more one price for gold,” Friedland told delegates from Singapore. “Everything will be priced in relation to its ESG components and be priced in relation to how much global warming gas is created in making that commodity, because we’re going to head to a price on carbon,” Friedland said. “The minute you put a price on carbon, every mine in the world will have its end product priced according to how deleterious it is or how less deleterious it is on the global environment.” Friedland is far from alone in believing that the implementation of circular economy principles – which aim to reduce waste and pollution – will affect commodity pricing. The movement toward circularity is being driven by investors and consumers who want more information about the conditions under which goods are produced and the environmental and social impacts of that production. It’s also being driven by net zero commitments of governments and investors, and regulations around conflict minerals in the U.S. and EU (already in effect) and the Joint Due Diligence Standard for Copper, Lead, Nickel and Zinc (an industry association-led standard that will come into effect in 2023). But how do we get there? One of the enabling technologies of the circular economy is blockchain. While bitcoin may have been the first application of the technology, its applications go far beyond the cryptocurrency craze. The immutable distributed ledger technology creates a link between the physical and the digital worlds, and offers a secure digital record of transactions that can’t be tampered with. Essentially a decentralized database, it allows traceability of raw mate-
