LONDON (Reuters) - BHP Group has completed its first blockchain trade in iron ore with China Baoshan Iron & Steel Co Ltd, in a transaction worth around $14 million.
FILE PHOTO: Visitors to the BHP (formerly known as BHP Billiton) booth speak with representatives during the Prospectors and Developers Association of Canada (PDAC) annual convention in Toronto, Ontario, Canada March 4, 2019. REUTERS/Chris Helgren
BHP and technology firm MineHub said in separate statements on Monday 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.
For the past several years, commodities groups have been seeking to save money by using blockchain to digitise a sector that still uses millions of paper documents, but have come up against obstacles.
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.
“Current pandemic events and fraud cases in the commodity trading industry are causing a step-change in the adoption of digital solutions,” 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.
Reporting by Eric Onstad; Editing by Susan Fenton