LuNa Smelter Case Study

LuNa is a leading tin producer located in Kigali, Rwanda,and it operates vertically integrated operations comprising exploration assets, through cassiterite production sites, a beneficiation plant and a modern smelting facility. It is the only tin smelter in East Africa which completed an assessment for the Responsible Minerals Assurance Process (RMAP), the flagship program of the Responsible Minerals Initiative (RMI). LuNa Smelter is also fully conformant with the requirements of the OECD Due Diligence Guidance for Responsible Supply Chain of Minerals as well as meeting the demands of the mineral certification scheme of the International Conference on the Great Lakes Region (ICGLR). To further boost transparency of the tin data, LuNa Smelter decided to implement traceability and partner with Minespider.

“The Rwandan mining and processing industry has tremendous potential. It's a lot of work to produce here while adhering to international due diligence requirements and Minespider enables us to make these processes more efficient. With blockchain we can communicate our efforts along the supply chain, strengthening our brand.”- comments Aleksandra Cholewa,  Director of Investment & Development at Luma Holding Ltd.

The challenges of operating in Africa

Mounting and maintaining such an operation that is both responsible and profitable in Central Africa is a challenging endeavor - which is why many companies prefer to simply export the cassiterite concentrate to other countries with established smelting facilities, leaving less value added in the country. On the global commodities market however, customers cannot possibly know where and how their tin was sourced, processed, and cast. That’s why LuNa Smelter developed the plan to use Digital Product Passports and traceability software in order to attach information directly to tin shipments, time-stamped and tamper-proof.

Rwanda: Located in Central Africa, The Republic of Rwanda is a major supplier of cassiterite, wolframite, gold, and coltan, among others. Rwanda itself is a stable country with no conflict in its borders, and is not considered conflict affected or high risk by the European Union’s indicative list of countries qualified as CAHRAs. Because of its vicinity to the Democratic Republic of the Congo, it is considered a CAHRA in other frameworks, most importantly the US’ Dodd-Frank Act. Rwanda has made it a priority to protect its biodiversity - a third of the country is covered in forest and is home to the world's largest population of the endangered mountain gorillas. Moreover, agriculture is a significant economic factor. As a consequence, any mining activity has to be conducted as responsibly as possible, in order to preserve natural resources. There are extensive regulations in place to protect these resources and compliance with them is overseen by the Rwandan Mining, Petroleum, and Gas Board.

Firstly, this helps to highlight the responsible provenance of mined tin and exemplary practices of the smelter. Secondly, it allows LuNa to provide their customers with the necessary import and export documentation, information for supply chain audits, and other ESG data that might be demanded by international regulations. It also distinguishes LuNa Smelter as a leading responsible producer in the Great Lakes Region, and more broadly, in Central Africa.

The EU Conflict Minerals Regulation

On January 1st, 2021, the EU Conflict Minerals Regulation (EU 2017/821) came into effect. The regulation requires EU importers of Tantalum, Tungsten, Tin, and Gold (3TGs) to conduct due diligence in accordance with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (CAHRAs), in order to avoid contributing directly or indirectly to conflict in their supply chains. To date, there are no tools available that provide an immutable record documenting a shipment of minerals from a mine along a mineral supply chain to a smelter or refinery and ultimately the end-manufacturer, while providing CAHRA-related documentation. 

In July 2020, Minespider started developing OreSource, a software tool built on their existing blockchain infrastructure that allows users to share and review material data. It can communicate provenance, location, quantity, and additional information downstream with shipments of the products. This is done via a template, with questions for LuNa and their suppliers that are tailored to the requirements of the regulation. New templates can be added as the European Union or other regulatory bodies recognize additional government or industry association standards. The development of this product was supported by a grant from the Raw Materials Chapter of the European Institution of Innovation and Technology (EIT).

Implementing the software onsite

Minespider’s team spent a total of nine weeks in Rwanda in order to learn from LuNa Smelter’s team, visit mine sites, refine and adapt the software, and onboard relevant personnel to the system.

LuNa Smelter thus took the following preparatory steps: Firstly, LuNa’s team identified which information would go on which data visibility layer (private - transparent - public). The Minespider technology creates digital certificates that separate data into three different layers, depending on whether the data should be publicly visible, transparent between members of the same supply chain, or private between a company and their customer. This was key to ensuring they didn't reveal information that would be considered confidential by either the sender or recipient of a shipment. Secondly, the data template for the EU Conflict Minerals Regulation was filled out.

After those preliminary steps, LuNa’s team started using the software for the actual shipments. For this, a certificate was created for each batch, including information about date, weight, and recipient, as well as the necessary documentation in the previously agreed-upon data layers. After that, a QR code linking to the information could be printed and attached to the shipment. In this pilot, at least one QR code was attached to every bundle of tin ingots in a shipment. Five of the six shipments of tin leaving LuNa Smelter in December were equipped with Minespider QR codes. And since then, all shipments that have left the Smelter are equipped with QR codes linking to blockchain-based shipment certificates.

‍

Key outcomes for LuNa Smelter

Digitized processes

Using Minespider’s traceability software, LuNa Smelter is transitioning to adopting more digital processes in their due diligence reporting. Thanks to Digital Product Passports, supply chain data is now digitally linked to the physical shipment, reducing the amount of paperwork needed.

Streamlined compliance

LuNa implemented the OreSource template into their traceability department, ensuring that every tin shipment now carries a QR code with the correct data needed to comply with regulatory requirements, such as the EU Conflict Minerals Regulation.

Strengthened brand image

By employing blockchain to trace responsibly sourced tin, LuNa is becoming a trail-blazer as the commodities market is driving towards ever more transparency and sustainable sourcing becomes a decisive factor.

Improved client partnerships

Their downstream client wanted to learn more about traceability and joined the Minespider system. They now know how to access key data on LuNa's shipments via the blockchain platform.

The software, with the mentioned functionalities was commissioned with LuNa Smelter and continues to be actively used there. 50,000 tonnes of tin since the start of the project have been traced on the blockchain platform. Both LuNa Smelter and Minespider see this as the beginning of a long- term relationship to leverage the use of blockchain technology to foster and promote responsible sourcing, in Rwanda and elsewhere.

‍Learn more about how Digital Product Passports can help you to comply with international guidelines and regulations here.