On Monday (29 October 2018), Russia-based Alrosa, probably the world’s largest rough diamond miner (reportedly responsible for over “29% of global diamond production in terms of carats”), announced that it had joined the pilot program for “Tracr”, the blockchain-powered end-to-end diamond traceability platform being developed by rival De Beers Group “in collaboration with industry stakeholders.”

De Beers says that Tracr is designed to address the following challenges faced by today’s supply chains:

  • Transparency: “Low visibility and control of origin drives uncertainty about ethics & authenticity of products”
  • Privacy: “Sensitive data like client names and prices need to remain confidential”
  • Traceability: “Lack of reliable, permanent records of assets, as they move along the value chain, undermines customer confidence in asset provenance”
  • Compliance: “High costs of compliance and data management, due to complex, manual, and inconsistent processes”
  • Trust: “Limited trust among transacting parties, due to the lack of transparency and immutable traceability”

It also says that blockchains can help by providing: auditability; tamper-proof records; security; smart contracts; democratic collaboration; and data authenticity.

Tracr is designed to be “an inclusive and open platform for the diamond industry.” That’s why De Beers has been “engaging with key industry stakeholders, including other diamond producers, industry trade associations, graders, governments, logistics providers, retailers and banks, to develop the best governance setup for the platform.” 

Although De Beers came up with the idea for Tracr in 2017, it was not until January 2018 when a pilot project “involving a small group of industry participants” was launched. Yesterday’s announcement brings the world’s two largest diamond producers (Alrosa by output, De Beers by gem value) together to work on a platform that will provide assurance about the provenance of their diamonds. Tracer is focused on “providing consumers with confidence that registered diamonds are natural and conflict-free, improving visibility and trust within the industry and enhancing efficiencies across the diamond value chain.”

Sergey Ivanov, the CEO of Alrosa, said:

“Traceability is the key to further development of our market. It helps to ensure consumer confidence and fill information gaps, enabling people to enjoy the product without any doubts about ethical issues or undisclosed synthetics. Alrosa is glad to participate in testing Tracr, along with other market solutions. We believe tracing requires industry cooperation and complementation for the sake of a common goal.”

Bruce Cleaver, the CEO of De Beers Group, stated:

“To provide true traceability, diamonds must be tracked from their point of production. We are delighted that Alrosa has joined the Tracr pilot, as the collective efforts of the world’s two leading diamond producers will enable more of the world’s diamonds to be tracked on their journey from mine to retail. Having a critical level of production on the platform will deliver significant benefits for consumers and diamond industry participants.”

Jim Duffy, the General Manager for Tracr, said:

“As Tracr’s adoption grows, we will continue to raise the bar for the traceability, authenticity and provenance of diamonds. We look forward to working with all members of the industry to ensure we deliver a comprehensive platform that creates value for diamond businesses while meeting the consumer’s expectations.”

Featured Image Courtesy of De Beers Group