Industry Giants, BHP and Baosteel, Make First Iron Ore Trade for $14 Million Using Blockchain
Mining conglomerate, BHP Group has revealed that it has transacted a $14 million worth of iron ore trade through a blockchain-based platform which has been created by MineHub Technologies based in Canada.
The transaction involved BHP Group and China Baowu Steel Group, which is an offshoot of Chinese giant steelmaker China Baoshan Iron & Steel, which is mostly referred to as Baosteel.
Last month, BHP stated that it was in the process of piloting a blockchain-based iron ore trade with the Chinese conglomerate Baosteel.
In a statement shared exclusively with Bitcoin Exchange Guide, during the transaction process, BHP utilized the blockchain platform to process the contract terms virtually, exchange the documents as well as offer real-time cargo visibility.
The piloting of the blockchain-enabled trading by BHP is part of the firm’s plan to digitize its documentation procedures for its commodities trading fully. According to Michiel Hovers, who is BHP’s sales and marketing executive, the mining industry requires a paradigm shift when it comes to documentation. He said:
“The bulk commodity industry needs a digital revolution to reduce physical documentation processes.”
Baowu Steel, which is state-owned, has previously invested in blockchain technology in efforts to digitize its trade. Last month, the firm conducted what it said was the inaugural blockchain-enabled yuan-denominated foreign letter of credit (LC) with another mining giant called Rio Tinto. The firm used the Contour platform that has been developed on Corda technology R3, which is an enterprise-focused blockchain solutions firm.
BHP’s journey in the blockchain space can be traced back to 2017 after Vitalik Buterin, Ethereum founder announced that the mining giant was developing a blockchain-based application that will help in tracking natural resources.
In February last year, the mining leader in partnership with a Japanese based shipping firm NYK successfully tested blockchain tech.
The Canadian-based MineHub Technology explained that the BHP testing was just one of the many in the pipeline, which will involve its blockchain platform. The firm also stated that the testing comes at an opportune time when various crooked characters are taking advantage of the supply chain uncertainties brought by the COVID-19 pandemic.