MineHub, a Canada-based blockchain startup, is forming a joint venture with Kimura, a London trade finance firm, to make a solution for syndicate financing of commodity supply chains, a report says.
The project will attempt to verify the ESG credentials of the commodities supplied, which will let the investment be sustainable.
Syndicate financing, the report notes, means there are multiple financiers providing joint funding for the commodities transaction.
Many transactions get amended, which renders them difficult, the report says.
Through digitizing and using blockchain, these issues could be amended.
MineHub had previously worked on trades with companies like BHP and Baosteel. The company first partnered with Kimura in 2019.
MineHub’s goal was to reduce paperwork in mining supply chains that allowed for digital transactions or supply chain traceability. ESG tracking is important because it lets companies be more transparent about things like emissions and other environmental factors.
“This venture is a natural expansion of our partnership with Kimura. We have a shared vision for how blockchain technology will transform commodity trade finance,” said Arnoud Star Busmann, MineHub CEO. “The real-time transparency and immutability will reduce credit and ESG compliance risk.”
Last year, PYMNTS wrote that as the U.S. economy was recovering, suppliers were struggling to keep up. There were supply disruptions and higher material costs for items in high demand, which ended up cascading and causing multiple supply chain issues throughout the year.
Read more: Suppliers Struggle To Keep Up With Manufacturing Snap Back
As of January 2021, though, the prices for things like steel, aluminum and lumber were rising with higher order volumes.
Commodity supply chains had been lagged down with big order quantities, which made it so some producers were having to add on weekend hours and overtime. Because of that, some orders that used to take a week or two to finish were taking around six to eight weeks.
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