Fri, 29/01/2016 - 12:00
Current Issue 34
Britannia Mining begins working with UK Company, Everledger in an attempt to bring a secure and transparent solution to the commodity market’s burgeoning risks
Holistic Solutions in the Information Age
Writer: Matthew Staff
Project Manager: Arron Rampling
Headquartered in the United States, Britannia Mining Inc. is a global natural resources development company listed on the New York OTC Market. Over the years the Company has been active in mineral exploration and more recently has been developing gold, diamond and precious metal trading.
Combining the progression of its own exploration projects with an acquisitional ethos in regards to ready-mined products, the Company is starting to make a name for itself as a consequence of its vigilance in the sector, and its vision to integrate the latest disruptive technologies; now leading to its latest collaborative endeavour with Everledger.
Chief Executive Officer, Kenneth Roberts caught up with Europe & Middle East Outlook to outline the integrated vision and explain Britannia Mining’s focus in preparing for how ‘the blockchain’ could shape the future of the industry.
Kenneth Roberts (KR): Britannia Mining Inc. is a resources development Company that spans exploration and mineral trading interests. The Company started out exploring iron ore and coal in Malawi, later focusing on marketing raw materials mined in Africa and Malaysia. In 2015, the Company ventured into procuring non-conflict diamonds and precious metals.
We’re based in New York and have team members and partners in London and Malaysia, enabling us to reach the four corners of the globe; Europe, Middle East, Africa and Asia.
Europe & Middle East Outlook (EME): Throughout the Company’s evolution, what have been the main continuous improvement strategies and philosophies of Britannia Mining to achieve the success that it has done?
KR: Trends in the global economy as a whole and China in particular have recently created a particularly harsh trading environment for mining and natural resources companies. During the past decade, China has been the primary driver in demand. In recent times, China’s rebalancing of its economy has impacted demand for bulk minerals such as iron ore, manganese and copper. In anticipation of changing sentiment, we shifted focus from our exploration programme and concentrated on trading diamonds, gold, and other precious metals. This allowed the Company to participate across the full spectrum of the minerals and natural resources value chain.
To derive the greatest possible value from this refocusing of strategy, we have been actively seeking new ways to open up liquidity and accelerate global trade. As an entrepreneurial company, we believe that state-of-the-art technology can be harnessed to address some of the continuing challenges facing the commodity trading sector.
We are living in the digital information age and are witnessing the dawn of the Fourth Industrial Revolution. However, administrative processes in commodity trading often rely on paper-based systems. Such systems are open to error, theft and fraud.
Given that the output of a mine is valuable, we believe that by embracing technology, risks could be mitigated to ensure that the journey of a commodity from pit/shaft, to final consumer is as safe and efficient as possible.
EME: What are the key projects currently being undertaken by the Company, or that are in the pipeline over the coming months and years?
KR: Our mission is to address challenges within the supply chain, focusing first on rough gemstones and high-value metals. At Davos in 2016, blockchain technology was identified as one of the key elements of the Fourth Industrial Revolution. The technology produces distributed global ledgers of immutable, fully verifiable transactions. By using the distributed ledger (blockchain) to carry all the key information relating to a high-value item, total transparency over its origins and history can be captured. The record - a ‘ledger’ - is secure, tamper proof, and transparent.
In 2015, Everledger emerged as one of the 25 most exciting start-ups utilising blockchain technology, as it showcased its platform to tackle the cut-diamond industry’s expensive fraud and theft problem. With a view to transparently complying with the Kimberley Process; a government and community-backed certification scheme for diamonds, Everledger further developed a system of warranties that enable mining companies to verify that their rough-cut diamonds are not being used by militias to fund conflicts.
We see the potential value that blockchain could bring to commodities. Through an agreement with Everledger, we are focused on implementing the technology to increase trust, transparency and ethical frameworks for our diamond business with the ambition to further extend this to other natural resources. As a result, Britannia Mining has signed a license agreement with Everledger and we aim to facilitate our trading through paperless transactions; developing verification and due-diligence cloud-based systems; in an attempt to enable a reduction of risk and fraud, and to establish a secure B2B e-sales platform.
EME: How far spread is Britannia Mining looking ultimately in regards to this ambition, and what challenges do you expect to encounter along the way?
KR: Our vision is global and it is focused on addressing systemic SME trading bottlenecks.
The first key challenge is connectivity. We are looking to coordinate with multiple partners along the supply chain in an effort to add further value to certification and traceability systems. It is an exciting time, as the information age is opening up a great number of cross-border opportunities.
However, for digital technologies to benefit everyone, it requires closing the remaining digital divide, especially where a small proportion of large and resource-rich areas have limited access to the internet.
The second challenge is capital financing. Due to the decline in availability of trading finance, this has led the natural resources sector to become “credit crunched”. In particular, this has impacted the small, medium and artisanal miners.
Up until 2011, the commodities trade finance sector was seen as a low risk, critical cog of the natural resources and banking industry. But, by 2011 banks had become more risk averse. This manifested in a reluctance to offer trade finance positions for the smaller players; resulting in the lengthening of their working capital cycles; thereby placing stress on financial resources and profitability.
Access and allocation of capital is often cited as one of the biggest issues facing the mining industry, especially for its juniors.
EME: Looking forward, how do you see these new technology trends developing, what do you see as Britannia Mining’s role within this, and how does your offering differentiate from others within the sector?
KR: We are an entrepreneurial company motivated by solving problems. We think holistically rather than in silos.
With the blockchain cited to be a potential technological game-changer, in the future we hope that Britannia, through optimal use of Everledger technology, will have developed ways to measurably reduce risk in the supply chain and in turn showcase a growing ethical trade initiative for the natural resources industry.
We believe that Britannia’s integrated trading platform could be a key enabler.
The platform is currently in advanced stages of development and is a joint venture with Espritia, a UK company that has built multi sector e-commerce sites. Our platform will utilise Everledger’s world-class blockchain technology and functionality, and it is this that we believe will differentiate our sales solution from other platforms; in terms of transparency, verifiability, risk reduction, speed of operation and users’ peace of mind.
Initially intended for internal use by Britannia Mining to sell through rough diamonds into industry, the platform will be expanded for other qualifying commodities. Our goal is to create a trading environment for SMEs to list products and trade with pre-qualified and vetted vendors in a secure, automated, private cloud setting.
We are hoping that by providing a high level of assurance to our trading partners, providers of working capital funding and trade finance may improve offerings that could shorten the length of working capital cycles.
The platform will offer to qualified SME users access to the tool through web browsers or mobile app.
Ultimately, we hope to see a world in which increased trust and transparency brings confidence of supply chain to providers of financial services. In the future this may assist natural resources producers and traders to access new markets and funding streams.