What is Mining Traceability

Mining Traceability is a system that allows companies to trace the origin and journey of minerals from the mine to the end user. It is an important tool that provides transparency and accountability in the supply chain, allowing control and verification of product information. Mining Traceability helps companies, regulators and rights holders ensure the accuracy of product information, which promotes regulatory compliance and improves transparency in mineral extraction. Mining Traceability is also directly related to the idea of sustainability, which focuses on minimizing negative impacts on the environment and social aspects of a company’s operations.

Mining Traceability involves the use of technology and systems to track every stage of the supply chain, such as tracking environmental parameters, labor conditions, the origin of raw materials, extraction methods and the transportation of materials. This data enables companies to manage their operations more efficiently and report to stakeholders, including the public, regulators and investors.

These systems can use blockchain technology, RFID (radio frequency identification), IoT (Internet of Things) and other means to create reliable digital traceability from mining to the end consumer.

It is important to note that for more developed countries, process automation for Mining Traceability usually represents a well-established and implemented cycle, while process automation for many mining companies in Latin America is just beginning to be taken into account.

Main challenges of automation in the mining industry in LATAM

• The complicated supply chain of the mining industry in LATAM often involves multiple stakeholders, from miners and transporters to processors and exporters. Coupled with the challenge of multi-stakeholder resistance to change, coordinating traceability efforts among all participants is a challenge. 
• Limited technological infrastructure to support advanced traceability systems. This includes issues such as limited internet connectivity, outdated data management systems and insufficient access to technology.
• Informal or artisanal mining is common in some LATAM countries. This makes it difficult to implement a traceability system due to the unregulated nature of these operations.
• The scarcity of resources is a vicious circle problem. On the one hand, small companies are unwilling to make large investments in technology and infrastructure. On the other hand, they face the impossibility of obtaining financing from international programs or investments from financial institutions because they do not meet the mining traceability standards required by automation.

These challenges are compounded by limited awareness and education, geopolitical and social factors and, of course, data security and privacy in regions with evolving regulatory frameworks.

This list could be extended, but of course the main challenge is the lack of a common regulatory landscape for Mining Traceability in all LATAM countries.  The lack of standardized procedures and work formats hinders collaboration and data sharing among stakeholders.

A critical consequence of the lack of Mining Traceability in LATAM

The consequence with the greatest impact is the difficulty of selling to international markets. Peru, for example, is one of the world’s leading producers of copper, silver, zinc, iron and gold, being the first exporter in Latin America. 

However, in recent decades, Peru has suffered numerous mining conflicts in which the companies involved have not been able to respond to their illegal acts. Mining in Peru often takes place in rural, remote areas where the presence of national institutions is weak and small farming communities often bear the brunt of the direct negative impacts of mining. Lack of state capacity to control the mining industry and high levels of corruption negatively affect transparency. The lack of state capacity to enforce human rights and environmental standards, even if these exist on paper, is a challenge for international organizations monitoring the mining industry chain and for potential European buyers.

At the European Union level, there are a number of standards that mineral products and supplier company operations must meet. Here are some of them:

• ISO 14001: Environmental management systems. This standard provides a framework for environmental management systems that is relevant to mining companies.
• ISO 45001: Occupational health and safety management systems. Occupational health and safety are critical factors in the mining industry. 
• The OECD (Organisation for Economic Co-operation and Development) provides companies with guidance on supply chain due diligence, especially in the context of responsible business conduct, including mineral supply chains.
• Conflict-Free Sourcing Initiative (CFSI) Standards provides standards and guidance for responsible mineral supply chains, in particular to address conflict minerals. 
• The WCO (World Customs Organization) data model provides a standardized framework for the exchange of information between customs authorities that is relevant to traceability in the minerals supply chain.

The first steps to regulate Mining Transparency in Latin America have already begun.

Independent initiatives are being introduced in Latin American countries to remain compatible and have a presence in the global market. 

• The OCB System and the Alliance for Responsible Mining (ARM) have partnered to bring the OECD (Organisation for Economic Co-operation and Development) international due diligence standard to Brazil, in line with the realities of artisanal and small-scale mining. (ARM) with the implementation of the CRAFT Code. 
• https://www.responsiblemines.org/en/2023/06/ocb-system-signs-partnership-with-arm-for-mineral-traceability/
• DECREE 2234 OF 2023 of the Presidency of Colombia, by which the necessary mechanisms are added to Decree 1073 of 2015, “Sole Regulation of the Mining and Energy Administrative Sector”, to determine the origin and traceability of minerals, register mining operations and establish the necessary control instruments for its application.
• https://www.alcaldiabogota.gov.co/sisjur/normas/Norma1.jsp?i=152538
• Parliamentary Technical Advisory of Peru raises the issue of traceability of all materials considering the supply chain and chain of custody and reveals the benefits of blockchain technology for traceability in mineral and metal supply chains.
• https://obtienearchivo.bcn.cl/obtienearchivo?id=repositorio/10221/33545/1/Trazabilidad_de_Materiales.pdf

What’s next? ….

So we understand that in order to comply with Mining Traceability, full automation of LATAM mining companies in the near future is inevitable on the one hand, and on the other hand is associated with a wide range of benefits at micro and macro level.

А. For processes within the company, automation means:

• Digitization of geological data analysis processes, creation of three-dimensional reservoir models and reserve forecasting.
• Management of the production process and quality control in accordance with the appropriate certification.
• Creation of a transportation and logistics management system.
• Forecast product demand based on volatile market trends.
• Automating timekeeping, occupational safety and employee training in each region.
• Equipment condition diagnostics, fault recognition to avoid breakdowns.

B.At the macro level, digitalization of quality means:

• Control and management of the environmental impact of operations, implementation of energy optimization systems.
• Management and integration of data in the value chain.
• Reputation of a company that operates according to advanced sustainability standards and contributes to the development of the country and the industry as a whole.
• Creation of an image of a socially responsible company that complies with Mining Traceability regulations.
• Secure access to global markets and funding from international organizations that contribute to the development of the mining industry in LATAM.

The role of Power Pulse Solutions in mining traceability

Implementing digital transformation for mining companies using SAP or other ERP solutions.  Power Pulse Solutions brings clarity to a huge volume of data and complex tasks, bringing tasks from different regions onto a single platform and simplifying processes at macro and micro levels.

Through automation processes with Power Pulse Solutions, your end customer will always be able to see from which mines/minerals the minerals and metals in their final products are sourced and by which methods they are produced. 

Our company offers a transparent way to ensure that our customers have everything they need to manage their internal processes in compliance with international markets and organizations.  

We start by analyzing your current situation and develop and implement a customized strategy that takes into account the unique characteristics of your region and your end goals.

Turn challenges into opportunities with seamless automation today.