Mining major, Rio Tinto’s first blockchain iron ore trade with Baosteel this week may set the trend for more such trades to come.
The paperless trade transaction was done via the Contour trade finance blockchain platform, that breaks away from the traditional paperwork when documents were normally couriered for inspection.
This ‘breakaway’ buried the image of the ‘less tech-savvy’ industrial mothball that miners and steel mills were usually depicted in the past.
Rising Popularity of Yuan
Another highlight was that the blockchain was done under Yuan-denominated iron ore sales, which helped to popularize the use of Yuan renminbi instead of US dollars for trade settlement.
Apparently, the use of the Yuan-denominated iron ore sales had caught up among the ‘Big Four’ miners.
FMG done that back last year, Brazil’s Vale transacted one trade earlier this year, while BHP just did it this Tuesday and suggested that it may explore using blockchain for future transaction.
Fear inspires changes
Perhaps, the blockchain trade just coincide with COVID-19 period which encourage social distancing and lessen human contacts.
With the digitization of documentations such as letter of credits, bill of lading and digital sign-off had made the transaction process more efficient and with little delays.
Besides, BHP was also not new to blockchain technology after reportedly joining a pilot programme with Japanese shipping firm NYK last year to test a joint blockchain experiment.
Moreover, BHP has also researched the use of Ethereum blockchain for several years to build an application to track natural resources.