BHP completes $14 million blockchain iron ore trade with China's Baosteel
BHP Group, working with technology firm Minehub, has completed its first blockchain trade in iron ore with China Baoshan Iron & Steel Co Ltd, in a transaction worth around $14 million.
Reuters reported that for the past several years many commodities groups have been looking for way to digitize the sector and move away from the traditional process that use millions of paper documents and require a high amount of time and resources.
On June 29, BHP and MineHub said in separate statements that blockchain - a digital ledger that forms the backbone of many cryptocurrencies such as bitcoin - would boost efficiency and transparency. They did not say whether BHP has used blockchain before for other uses.
BHP said that the trial transaction using the MineHub platform was worth about $14 million and was delivered in June. The platform processed contract terms, exchanged digital documents and provided real-time cargo visibility, it added.
“The bulk commodity industry needs a digital revolution to reduce physical documentation processes,” said BHP sales and marketing officer Michiel Hovers.
Last month, the world’s top listed miner BHP said it had made its first yuan-denominated sale of iron ore to China Baoshan Iron & Steel, known as Baosteel and the listed arm of the world’s biggest steelmaker China Baowu Steel Group.
BHP added at the time that it expected to complete its first blockchain transaction with the Chinese company soon.
Privately-held MineHub Technologies said this was the first of a series of transactions on its blockchain-based platform that would include other industry partners.
“Working with the world’s largest mining company and the world’s largest steel producer on designing the digital future of critical supply chains like iron ore is incredibly exciting. This series of transactions, each focusing on different aspects of the post-trade process, will allow MineHub to incrementally expand the platform’s functionality and scalability into the iron ore and other mineral commodity markets, incorporating real-life user experience,” said MineHub Chief Executive Arnoud Star Busmann, previously a commodities executive at ING Bank.
Canada-based MineHub said it was also developing digital systems for base metals concentrates, structured finance and emissions tracking.