“Moment of truth”: Belgian company HB Antwerp uses blockchain to trace the history of each diamond

Simply disrupting the traditional diamond supply chain is not quite what the founders of Belgian company HB Antwerp aim to do. They want a revolution.

The company was launched in 2020 with the aim of using technology to bring visibility to the traditionally opaque diamond industry. The founders hope to establish a new standard for diamonds by providing an end-to-end picture of each stone’s trajectory, from mine to consumer, while ensuring greater equity for the diamonds’ countries of origin.

These efforts focus on using blockchain technology and the Microsoft Cloud to create a digital ledger of the history of each diamond—starting with where the stone came from, down to the exact excavation position, and following it as it is sorted, analyzed, transformed from rough rock. to sparkling diamond and finally delivered to the consumer.

These “moments of truth”, as HB Antwerp calls them, will enable diamond mining countries to see how much value their stones generate and informed buyers to know where their diamonds come from. They also create a huge amount of data – over 3000 points of confirmation for each stone.

“The main challenge was that it has never been done before,” says Shai de-Toledo, one of HB Antwerp’s founders.

Recognizing the need for a partner capable of scaling the solution to any country, HB Antwerp turned to Microsoft. The companies worked together to develop a blockchain ledger built on Microsoft Azure and an enterprise resource planning system using Microsoft Dynamics 365. Data from each diamond is stored in a proprietary IoT device, essentially a mini-vault that cannot be opened without documenting the action in the ledger. (See a demo of HB Antwerp’s IoT capsule.)

The data is then uploaded to Power BI, Microsoft’s data visualization platform, to provide governments and mining companies with a real-time view of the diamonds’ value increase. The goal, says de-Toledo, is to make information about each diamond available to consumers through a link to the ledger.

“We’re trying to package this whole journey and deliver it to the consumer in a way that will create an environment that others find very difficult to compete with,” he says. “Having a ledger and a representation of the journey means that for the first time consumers can ask themselves, ‘Where did the diamond come from? What was its impact? Which people benefited from it?'”

The traditional diamond supply chain, says de-Toledo, has commoditized diamonds and diluted their value, with many actors involved and little benefit to the countries and people who produce the diamonds.

“For more than a century, the diamond industry has made billions by obscuring each stone’s journey,” he says. “Where it comes from, who has added value to it, how the value is – or is not – benefiting the local communities, or even what a fair price should be for consumers. We feel it has done so much damage that “disrupting” feels like evolution. This is a revolution.”

A ‘seismic shift’ for Botswana

An integral part of HB Antwerp’s mission is to empower local communities to benefit from the diamond industry and have a greater stake in its future. In Botswana, that has meant investing in the country, securing a fair price for the diamonds and creating new opportunities for the people. The HB Antwerp Innovation Lab opened in Botswana in 2021 to train engineering and technology students, especially women, for careers in the facility there. In addition, HB Antwerp will soon open an academy in Botswana to train local diamond cutters.

In 2020, HB Antwerp began implementing its new ecosystem under a partnership with Lucara Diamond Corporation at the Karowe mine in Botswana. HB Antwerp purchases diamonds from the mine based on their value as polished stones, rather than the standard practice of paying for rough products. That has resulted in 40% higher diamond royalties to Botswana’s government over the past two years, according to HB Antwerpen.

Botswana’s President Mokgweetsi Masisi characterized the new approach as a “seismic shift” for the country. “I can tell you we don’t want to go back to the standard we had,” he says.

At a UN General Assembly event in September, Masisi said he believes HB Antwerp’s approach can be used by other African countries and can help meet the Sustainable Development Goals (SDGs) adopted by UN member states.

“We want to go out and really market this,” he said. “We want to see the relationship between African governments and those with whom they cooperate change fundamentally. There is no reason to believe that we will reach the SDGs with (current) models. It just won’t work.”

Ultimately, says HB Antwerp co-founder Rafael Papismedov, the goal is to provide knowledge and training that will enable Botswana and other African countries to have greater ownership of their natural resources and grow their economies.

“We believe the future of this industry is to transform the diamond in its country of origin,” he says. “This mineral belongs to the people, and it is the people who will be involved in every step of it.”

Watch more HB Antwerp videos and learn more about their history by visiting www.microsoft.com/industrysolutions/HBAntwerp.