Dawn Jutla says her company has the technology to help put an end to the shady practice of mining precious and industrial metals to finance war.
Ms. Jutla, the president and CEO of Halifax-based startup Peer Ledger, is staking its future on a blockchain technology called Mimosi that it says can track precious metals throughout the supply chain to ensure every milligram purchased by buyers has come from an ethical source and is not funding armed conflict in war-torn countries like the Democratic Republic of Congo.
"This is important because of the damage buyers are seeing being done at the source mines among the Indigenous people who live in the area," says Ms. Jutla, a professor of technology, entrepreneurship and innovation at St. Mary's University in Halifax. "When I say damage I am talking about children being raped and used for labour in mines. End users of these metals are trying to use their purchasing power to prevent that."
But tracking the origin of metals like gold and silver to ensure they don't come from a mine run by armed groups can be difficult. For example, a bar of gold is usually produced from ore from several sources requiring end users to track those multiple sources. And while standards, programs and guidelines exist aimed at verifying the source of these metals, it can be time-consuming and costly to gather that documentation.
However, Ms. Jutla says there is mounting pressure from the international community to stop the unethical production of minerals, and she says Peer Ledger's Mimosi product provides a solution to this problem. Mimosi uses a private permissioned blockchain, which chronologically and permanently logs information that's copied across a computer network accessed by multiple collaborating parties. When a transaction is carried out, it's grouped together in a cryptographically protected block. In the case of the Mimosi technology, every transaction involving a source of ore can be linked back to older blocks containing previous sales transactions for the ore. This allows Mimosi users to trace gold and other precious and industrial metals (mainly tin, tantalum and tungsten) from the refiner, to the processor, to the distributor.
But can the startup be successful selling a technology that's largely unknown and few people understand? Toronto's William Mougayar, an entrepreneur, advisor and author of the book The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology, says nothing is certain in the startup game. "Getting users and customers is the biggest challenge any startup has. Customers are typically reluctant to change habits if they are happy with their current solutions," Mr. Mougayar says. "It's too early to tell if Peer Ledger will be successful before seeing real signs of traction and customer engagements."
Peer Ledger was incorporated in April of 2016 and currently has just three employees. But Ms. Jutla has big plans for the company. It recently launched Mimosi in Paris at the Organization Economic Co-operation and Development's 11th Forum on Responsible Mineral Supply Chains. She says the reaction to Mimosi at the Paris forum was encouraging, although the company has yet to sign on any customers for the product. "This is a product that will impact the industry," she says. "We got a lot of interest from people in the field and a lot of interest from the downstream and upstream portions of the industry."
The trick now is to turn that interest into revenue. Halifax is not a mining or jewelry industry hotbed. That's why privately owned Peer Ledger plans to build an international team to market and sell Mimosi. Ms. Jutla expects the company will face plenty of competition. Companies around the world are searching for ways to commercialize blockchain. According to PricewaterhouseCoopers, $1.4-billion was invested globally in blockchain startups in the last nine months of 2016.
Mr. Mougayar says Peer Ledger's competition is already out there. "There are at least half a dozen companies already in the supply chain/provenance market, which Peer Ledger fits in," he says. "[Mimosi] could provide more supply chain visibility and transparency, but the actors and stakeholders need to want this."
Ms. Jutla is confident customers will want Mimosi. Not only does she think the technology will make it tougher for unethical sources of precious and industrial metals to make it into the supply chain, she says it will reduce a client's compliance costs in this area by 75 per cent.
"I would not be spending so much time on this if I didn't think we could execute," she says. "We intend to stay ahead of the curve by always having the better solution. We are doing the right things. But you always need a little bit of lady luck, too."
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