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Not all journeys to blockchain technology projects start with the same first steps. To disrupt a highly traditional marketplace, one company is setting its sights on blockchain but is taking a more conservative primary step.

Open Mineral — a trading platform for physical commodities — has today announced its new online marketplace.

Following a seed funding round of $2.25 million, the company is looking to change the way raw materials are traded. The problem it is solving? Bringing transparency, efficiency, and digital capabilities to a centuries-old market that still relies heavily on traditional transaction methods.

The opportunity here is enormous. The physical commodities market moves raw materials worth hundreds of billions of dollars from producers to consumers around the world. In spite of this, this is a marketplace that often requires physical documentation, and commodity traders are typically needed when trading physical goods. These traders act as go-betweens, taking commissions as trades are conducted with producers and consumers.

In contrast, the launch of Open Mineral Exchange brings sellers and buyers together directly — such as mining and metals companies — without intermediaries, which is designed to keeps costs low and improve profitability.

“Today, mining and metals companies often trade with intermediaries, leaving a lot of money on the table due to market inefficiencies and limited transparency,” Ilya Chernilovskiy, cofounder and COO at Open Mineral, told me. “We have redefined the trade of base and precious raw materials, streamlining the complex, slow, and paper-heavy process, and eliminating the need for intermediaries. Our digital, online platform allows companies to market and source their raw materials directly — increasing efficiency, transparency, and, most importantly, profits.”

The platform currently focuses on zinc, lead, copper, gold, and silver concentrate markets, but could expand into other concentrates in the future.

In addition to the transactional platform, Open Mineral offers its users access to freight, quality control, financing, and insurance services, and includes instant messaging, electronic document exchange, interactive profit and loss calculators, and more.

While not a blockchain-technology project, the service Open Mineral has launched does lend itself to distributed ledgers and tokenization, something the company is currently eyeing for the future.

“Blockchain indeed brings tremendous value to multiple industries, and commodity trading is no exception,” Chernilovskiy said. “In fact, at Open Mineral we have joined forces with a technology partner to develop blockchain solutions that would change the way companies run commercial, supply chain, trade financing, and back office activities in our industry — adding profitability, efficiency, transparency, and security.”

Open Mineral is realistic about the work needed to decentralize such a traditional, paper-based marketplace.

“To do that, however, we first need to digitize a lot of processes and documents, and that’s why we have started with a more traditional solution,” Chernilovskiy said.

So, what’s next for Open Mineral?

“We have proven our business model, so it is now all about scaling,” Boris Eykher, cofounder and CEO at Open Mineral, told me. “That said, we keep introducing new features every month based on our customers’ feedback. We are also taking a step further in our value by adding trade services and offering our clients access to freight, quality control, insurance, and trade financing.”

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