The commodity trade is a very old industry that focuses on commodities, like lead or copper, which are worth hundreds of billions. These materials are constantly moving from producers to consumers in a global market worth around $ 80 billion, but often lacking in efficiency and transparency. Meanwhile, middlemen are making a lot of money just by acting as middlemen. This is where blockchain could, in theory, be applied, but introducing great transparency.
Open mineral, a physical commodities trading platform, has now closed an investment round ($ 2.25 million) to do just that.
The idea is to increase the efficiency of the commodity market in base and precious metals using blockchain. Its digital platform, Open Mineral Exchange, will bring together sellers and buyers, mining and metallurgical companies, allowing them to conduct transactions directly and securely, without intermediaries. It will also digitize and streamline the complicated and paper-heavy process.
These new physical commodity trading platforms have appeared in the past two years. Tradecloud, for example, caters to the refined metals market, while Metalshub focuses on ferroalloys. None of the current platforms use blockchain.
The Open Mineral model will be based on a success-based royalty, which will depend on the value / chemical composition of the material and the volume processed. The platform currently focuses on the zinc, lead, copper, gold and silver concentrate markets, but may expand to other concentrates in the future.
Open Mineral became the first startup to join the Zug-based Thomson Reuters incubator, which is famous for building blockchain startups. Investors include Goldcorp, a Canadian gold mining company, and Xploration Capital.
The company is founded by Boris Eykher and Ilya Chernilovskiy. Before co-founding Open Mineral, Eykher and Chernilovskiy both worked at Glencore, the world’s largest commodity trading house. The company is headquartered in Baar, Switzerland, with operations in Beijing, Lima and Moscow.