Alrosa Joins Blockchain-Based Mine-To-Customer Diamond Traceability Project
Russian diamond miner Alrosa, the world's largest in diamond mining, will join fellow mining giant De Beers' "Tracr," a blockchain-based pilot project that seeks to enhance traceability in the industry.
Russian diamond miner Alrosa, the world’s largest in diamond mining, will join fellow mining giant De Beers’ “Tracr,” a blockchain-based pilot project that seeks to enhance traceability in the industry.
According to a Mining Weekly report, collaboration on the pilot programme should see the two industry leaders assure the consumers and trade partners that diamonds that go through their supply chain are authentic.
De Beers first announced the Tracr pilot in 2017 and launched in January 2018 as a blockchain solution that would enhance transparency throughout the diamond supply chain. This would, in turn, improve the consumer’s trust in the precious mineral’s value chain right from the mining fields to the retail shop.
Tracr to help combat “blood diamonds”
One of the biggest challenges facing the diamond industry is the effect of “conflict diamonds,” most commonly referred to as “blood diamonds.”
De Beers hopes that its pilot project will help the industry find ways of combating this menace, which came to prominence after the release of a Hollywood blockbuster depicted its effect in Liberia.
How Tracr works
Tracr’s uses blockchain technology to create a digital certificate unique to every diamond, recording its key attributes as well as the transaction trail.
Data for each of these diamonds end up on the blockchain, creating a permanent record that buyers can access to verify that whatever they have bought is both natural and conflict-free.
The importance of this solution is that it helps to track what is called “blood diamonds,”- the uncut diamonds originating from areas ravaged by conflict, or war-zones. Mostly, parties illegally trade these diamonds whose proceeds then fund more conflicts.
The Tracr initiative is expected to complement any existing regulations and mechanisms that are designed to ensure there is confidence in the provenance and quality of diamonds.
Mechanisms that are already working towards this end include the Kimberley Process Certification Scheme, the World Diamond Council System of Warranties, and the Responsible Jewellery Council Code of Practices.
Tracr’s workability gained momentum earlier in May after its creator De Beers implemented it in tracking 100 high-value diamonds.
In the aftermath of that success, the project attracted the attention of Signet Jewelers, the world’s biggest retailer in diamond jewelry. The New York Stock Exchange-listed firm joined the Tracr project in May and will work with De Beers to achieve the same goal of enhancing traceability and authenticity.
Alrosa crucial to the initiative
Alrosa is said to be the largest producer of carat raw diamonds in the world and together with the London-based De Beers, control 50 percent of the world’s diamond supply.
By joining the Tracr initiative, Alrosa’s move brings together two of the companies with the resources to ensure that the project succeeds.
According to Alrosa CEO Sergey Ivanov, his company’s move to collaborate with De Beers on the pilot came as a result of their belief that there is need to have “a common goal” as an industry.
But it’s not the first time Alrosa is leaning towards a blockchain based solution in the industry.
In May, the Russian behemoth signed a partnership with KGK Diamonds that would see them work with D1 Mint, a blockchain startup that wants to tokenize diamonds.
D1 Mint hopes to use the emerging technology to bring more investors into the diamonds industry, with expected demand making it an attractive investment asset class.