One of the world’s largest mining companies, BHP Group, has used blockchain technology to complete a $14 million iron ore trade, Reuters reported on 29 June.
According to the publication, the firm used a blockchain platform developed by MineHub Technologies, a Canada-based company, to complete a $14 million deal with Chinese metals giant Baoshan Iron & Steel, also known as Baosteel. We first learned about the trade last month, when BHP announced it was planning to execute a blockchain-based iron ore trade with Baosteel.
BHP used MineHub’s platform to process contract terms, exchange documents online, and provide a real-time cargo visibility along the supply chain. Seeing as the mining industry is heavily dependent on paper-based systems, BHP conducted the blockchain trade as part of its plan to digitize the documentation process.
Michiel Hovers, sales and marketing officer at BHP, said in a statement:
“The bulk commodity industry needs a digital revolution to reduce physical documentation processes.”
While BHP Group is the biggest mining firm worldwide by market capitalization, Baosteel is the Chinese state-owned listed arm of Baowu Steel Group. This is not the first time that Baowu has digitized trade using blockchain technology, having previously completed a blockchain-based yuan-denominated purchase with another top mining group Rio Tinto.
The trade between BHP and Baosteel is only the first transaction in a series, involvig MineHub’s blockchain platform, Reuters reported. The trade came at a time when bad actors have been taking advantage of supply chain vulnerabilities during the COVID-19 outbreak, MineHub noted.
The firm’s CEO, Arnoud Star Busmann, said in a statement:
“Current pandemic events and fraud cases in the commodity trading industry are causing a step-change in the adoption of digital solutions.”