Episode 251: Fintech4Good - How Fintech Can Help Miners to Mine More Safely

The mining industry, particularly in Africa, is often associated with dangerous working conditions, environmental degradation, and an uneven distribution of wealth. Small-scale miners, who make up a significant portion of the workforce in the mining sector, face numerous challenges: inadequate safety measures, exposure to toxic chemicals like mercury, and the inability to access global markets. However, fintech is beginning to play a pivotal role in addressing these issues, helping to create safer, more sustainable mining practices and enabling miners to achieve more stable incomes.

In a recent episode of Breaking Banks Europe, host Elizabeth Kleinveld sat down with John Lombela , a serial entrepreneur and CEO of Axalio , a fintech company at the forefront of revolutionizing the mining industry. Lombela discussed Axalio’s innovative approach to mining, highlighting how the company uses technology to tackle some of the most pressing issues faced by small-scale miners. The company’s mission is not only to ensure safer mining practices but also to improve financial inclusion and reinvest in local communities. Through fintech, Lombela envisions a future where miners can work more efficiently, earn a fair income, and contribute to sustainable development.

The Challenges of Small-Scale Mining in Africa

Africa is rich in natural resources, particularly precious minerals such as gold, cobalt, and copper. However, small-scale miners often lack access to the tools, technology, and financial infrastructure needed to extract these resources safely and profitably. According to Lombela, many of these miners still rely on traditional methods passed down through generations, including the use of rudimentary tools and hazardous chemicals like mercury. These methods are not only inefficient but also harmful to both the miners and the environment.

Lombela recounted his experiences in the Democratic Republic of the Congo (DRC), where he saw firsthand the difficulties small-scale miners face. Many miners were using basic tools like shovels and their bare hands to extract gold, often with little success. The lack of modern equipment and knowledge meant that their efforts yielded minimal results, and their income was unstable.

Furthermore, small-scale miners are often exploited by middlemen, who buy their minerals at prices far below market value. These middlemen control access to global markets, leaving miners with little bargaining power and an unfair share of the profits.

Fintech as a Solution

Axalio was founded to address these challenges. As a fintech company, Axalio combines financial technology with cutting-edge mining solutions to improve the livelihoods of small-scale miners. One of the company’s key innovations is its ability to connect miners directly to global markets, eliminating the need for intermediaries who often take a large cut of the profits. Through Axalio’s platform, miners can access real-time market data, allowing them to sell their products at fair prices and retain a larger portion of the profits.

This direct access to markets is made possible through partnerships with major commodity buyers, particularly in regions like Dubai, which is a global hub for gold trading. Axalio has secured offtaking agreements that allow them to buy minerals from small-scale miners at competitive prices, providing them with a steady income.

Lombela emphasized that Axalio’s goal is to empower miners by giving them the tools they need to succeed. This includes providing access to better equipment, training them in safer mining practices, and helping them navigate the complexities of global financial markets. By doing so, Axalio ensures that miners can work in safer conditions, earn more money, and reduce their reliance on harmful chemicals like mercury.

Leveraging Technology for Better Mining Practices

One of the most exciting aspects of Axalio’s work is its use of technology to transform the mining process. The company uses geospatial technology to accurately identify mineral deposits, helping miners target the areas with the highest concentrations of valuable minerals. This technology provides up to 97% accuracy, reducing the guesswork that many small-scale miners currently rely on. As a result, miners can extract resources more efficiently and with less environmental impact.

In addition to geospatial technology, Axalio is also exploring the use of blockchain to enhance transparency in the supply chain. Blockchain technology allows for the creation of digital passports for minerals, enabling full traceability from the mine to the market. This ensures that minerals are sourced ethically and legally, which is increasingly important for buyers who want to ensure they are not contributing to illegal mining or environmental destruction.

Lombela acknowledged that implementing these technologies requires time and effort. Educating miners about the benefits of modern methods, as well as helping them adopt financial and technological tools, is a long-term commitment. However, he is confident that the benefits far outweigh the challenges.

Overcoming Financial Barriers

One of the biggest hurdles small-scale miners face is access to financing. Commercial banks are often reluctant to invest in small-scale mining operations due to the perceived risks involved. Instead, they prefer to fund large-scale mining companies, which have the resources and infrastructure to guarantee returns on investment.

Axalio is working to change this by building a framework that reduces the risks associated with investing in small-scale mining. By combining technology with financial expertise, Axalio is creating a more transparent and accountable mining sector that can attract investment from banks and other financial institutions.

For example, Axalio has developed relationships with equipment suppliers and offtakers, which provide a level of security for investors. Banks can see that miners have the tools they need to succeed and that there is a guaranteed market for the minerals they produce. This reduces the risks for both investors and miners, making it easier for financial institutions to support small-scale mining operations.

Lombela shared a success story from the DRC, where Axalio has worked with local banks like Equity Bank and EcoBank to provide financing for mining cooperatives. By demonstrating the potential for small-scale mining to be a profitable and sustainable business, Axalio has been able to secure millions of dollars in investment for local miners.

Reinvesting in Communities

Axalio’s commitment to improving the lives of small-scale miners goes beyond providing access to markets and financing. The company is also focused on giving back to the communities in which it operates. According to Lombela, Axalio reinvests between 30% and 50% of the profits from extracted minerals into local communities, building schools, hospitals, and other vital infrastructure.

For example, in Ghana, Axalio is working with a group of 5,000 miners who are in desperate need of equipment and financial support. By providing these miners with the tools they need, Axalio is not only helping them improve their livelihoods but also contributing to the development of the wider community.

Looking Ahead

Axalio’s vision extends far beyond Africa. While the company is currently focused on regions like the DRC and Ghana, Lombela has plans to expand into Latin America and Southeast Asia in the coming years. These regions also have significant small-scale mining industries that could benefit from Axalio’s fintech solutions.

Lombela is particularly excited about the potential of blockchain and other digital technologies to create a more transparent, ethical, and sustainable mining industry. By continuing to innovate and expand its reach, Axalio aims to transform the global mining sector, ensuring that miners everywhere can work safely, earn fair wages, and contribute to the sustainable development of their communities.

Through its innovative combination of fintech and mining technology, Axalio is addressing some of the most pressing challenges faced by small-scale miners in Africa and beyond. By providing access to global markets, reducing environmental impact, and reinvesting in local communities, Axalio is not only improving the livelihoods of miners but also paving the way for a more sustainable and equitable mining industry. As the company continues to grow and expand into new regions, it is poised to make a lasting impact on the global mining sector.

?? Watch the full episode here: https://youtu.be/O4UtrQrOhHg

John Lombela: https://www.dhirubhai.net/in/johnlombela/

Axalio.com

Serial entrepreneur and technology leader with over 17 years of experience in managing complex projects across diverse industries. As the Founder and CEO of Axalio.com Technologies, he focuses on innovative financial solutions in emerging markets, emphasizing transparency and ethical sourcing in mining operations. John holds a bachelor’s degree from Tshwane University of Technology in South Africa and has founded multiple successful startups.