WAZI

posted by Eduard Cornew
WAZI

WAZI is a first of its kind supply chain and traceability solution for ASGM communities globally. The platform vertically integrates adjacent small-scale miners and gold processors in Mwamba’s responsible gold supply chain.

Wazi streamlines ASGM supply chains,  eliminates mercury at the mine site and doubles the gold production of participating miners.



Inception

Mwamba’s work focusses on empowering Artisanal and Small-scale Gold Mining (ASGM) communities to eradicate mercury while continuing to develop their local economies.

One of the most significant obstacles faced by the ASGM sector is organization and supply chain resilience. When we were first building out our mercury eradication model in Tanzania we ran into these same obstacles. We realized that we were missing a tool that would enable our work to help these communities develop and transition away from mercury. The tool didn’t exist — so we decided to build it, and WAZI was born.


ASGM Mercury Dependency

Unable to afford modern processing infrastructure, most small-scale miners rely on mercury to recover the gold from their ore. ASGM contributes 40% of global anthropogenic mercury emissions, more than any other industry, releasing 1400+ tons of mercury to the environment each year. Unable to afford costly modern processing technologies, most small-scale miners rely on mercury as a cheap and easy processing alternative.  This compromise comes at a high social, environmental, and economic cost.  Mercury processing methods lead to mercury toxicity in laborers, their communities and the environment. They also recover less than half the gold in comparison to modern processing technologies. Mercury processing methods yield 30% of the available gold, whereas modern techniques capture upwards of 90%. Transitioning  miners from mercury to modern processing techniques doubles their gold production and eliminates human and environmental risks associated with mercury usage in ASGM

Modern processing technology is too capital intensive for most ASGM miner’s to self finance. ASGM is a hyper entrepreneurial economy, and is fragmented as a result. ASGM miners lack the organization needed to pool their resources and make an investment in modern processing facilities cost-effective.  A service-based resource sharing platform is needed to help the majority of ASGM miners access the benefits of modern processing technologies.


No Mercury, More Gold

Most ASGM’s with processing facilities require that other miners pay upfront to use their facilities. ASGM miners are characteristically ore-rich and cash-poor.  High fixed and variable costs combined with the large amount of ore required to run a processing cycle prevent most miners from engaging accessing the more efficient and environmentally sustainable processing technology. Most miners opt to process their ore independently using mercury in pursuit of a cheap, easy, and fast alternative.

WAZI maintains custody of the supply chain from mine-to-market, enabling participating miners to discontinue mercury processing and realize the higher yield of modern processing technologies with no money down. Wazi pays miners based on the measured gold content of their ore, enabling them to capitalize on the full value of their gold- not just the fraction they would otherwise capture using mercury.

Miner’s gain access to the platform by submitting their government issued ID and mining license. Once verified, miners use WAZI to sell MWAMBA their ore, taking a photo of their ore stockpile and submitting a sell-order via the mobiIe application. The platform documents transactions and coordinates logistics, dispatching pickup trucks to transport the ore from the small-scale miners to nearby processors with posted capacity.

WAZI miner transactions are carefully designed to accommodate the liquidity needs of miners and overcome trust barriers traditionally associated with the sale of ore. Miners receive partial payment at pickup based on a conservative average of past transactions. Mwamba takes two representative samples of each ore-batch transacted, leaving one with the miner. Mwamba conducts metallurgical testing to price the ore, paying the outstanding balance to miners via digital payments. “M-pesa”, a venmo equivalent, is a digital payments system that is widely used in Tanzania.  In the event of a pricing dispute, miners can contract locally available 3rd party metallurgical labs to test their sample and confirm accurate pricing.

Each transaction is stored on a blockchain-powered back-end, including data on the miner, mining licenses, payments, and chain of custody. Smart phone penetration in Tanzania’s mining communities is high and capable of supporting a mobile based application in this context.


Enabling Peer-to-Peer Processing Economies

In Tanzania, there are many examples of established small-scale processing centers. These centers are usually commissioned as compliments to mines and sized according to the processing needs of management. These centers process ore in “batches.” Often these centers sit empty while management accumulates enough ore to run a processing cycle.

WAZI enables ASGMs with modern processing facilities to generate additional revenue processing the ore of otherwise mercury-dependent ASGMs. Similar to Miners, Mwamba onboards processors to the WAZI network after ensuring legal compliance and acceptable operating standards.  Processors are paid  based on processing capacity used ad hoc, and do not assume any risk related to the gold content of the materials. Mwamba manages verification, booking, transport, and sales in a fully integrated mine-to-market responsible gold supply chain.

WAZI’s market-making role allows for the creation of metrics that can be used to assess the credit worthiness of miners and processors. These metrics can be used to steer global microfinance towards aiding the sustainable development of ASGM and improving the living standards of ASGM communities through capacity building.


De-risking Industrial Mining Operations, Profitably

Wazi is built to integrate with 3rd party processors. Large-scale mining operations in developing nations have significant processing resources and often operate in close proximity to ASGM mining communities.

Large-scale mining companies can participate in Mwamba’s mission by signing up as processors in the WAZI network. Participation offers mining companies a cost-effective means of lowering political risk by imparting positive impact on their host communities and aligning themselves with government development objectives for the ASGM sector.

In 2007, Tanzania established a permanent Sustainability Section for their Minerals Division, declaring mercury reduction and eradication a key policy objective for small-scale gold mining. The motion led to extensive technology demonstration initiatives meant to raise awareness of the higher efficiency of modern technologies. Tanzania is party to the Minamata Convention and UNEP Global Mercury Partnership, requiring that they produce a national action plan to address mercury in sector.

Tanzania’s 2009 Policy Statement made it the aim of government to support and promote the development of small-scale mining, seeking to modernize, increase access to technology and eliminate malpractice in the sector.


A Revolution in Early Stage Exploration

WAZI was initially designed to streamline the ASGM supply chain and coordinate collaboration between miners and processors. Since joining the team, Mwamba’s Mining Director, Tony Bainbridge, has alerted us to WAZI’s potential as data-driven exploration engine.  Mapping the location of ASGM operations and gathering data on ore-characteristics allows WAZI to generate preliminary exploration targets. Drilling, the primary method of exploration used to identify and size underground gold reserves, is extremely costly. Before drilling a piece of land it is important to establish that there is a high likelihood of finding a minable reserve. Early-stage drilling is often motivated by the presence of ASGM communities. By tracking the measured grade and characteristics of the ore sourced from participating miners, WAZI turns ASGM operations into exploration data engines.

Artisanal shafts are often dug in close proximity to one another, forming an array, with each shaft extending as deep as 50m into the earth’s crust. Collating data on ore produced by ASGM operations can provide comprehensive data on the mineral characteristics of the land they occupy. When a promising exploration target is identified, and further drilling confirms the potential for a large-scale mine development, the WAZI-miner relationship supports the trust needed to act on the discovery and reach an agreement with the license holder.

JV mine developments that arise as a result of the WAZI miner-engagement support the growth of the ecosystem by participating in WAZI as processing providers.


Eduard Cornew
CO-FOUNDER, COO

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