Australian iron ore major Rio Tinto and China's steel giant Baoshan Iron & Steel (Baosteel) have completed their first paperless, yuan-denominated iron ore deal, underlying both the increasing digitization of iron ore trades and importance of the Chinese currency, DBS Bank, which was one of the enablers of the deal, said on Tuesday May 12.
The trade was done through Contour, an open trade finance network that uses blockchain technology and was supported by contract automation systems provider Chinsay, technology company essDOCS, DBS Bank and Standard Chartered Bank, DBS Bank said.
In April,
Australian miner BHP and Baosteel finalized their first iron ore transaction involving payment in the Chinese currency, worth close to 100 million yuan ($14 million).
"Baosteel has been actively promoting yuan settlement in cross-border trading. The significance also lies in cooperating with leading upstream companies to explore the application of digital innovation such as blockchain in the traditional industry of raw material trading. It helps to improve the transaction flow and efficiency, and is a solid step forward on the path of the industry's green development," Baosteel's head of raw material procurement said.
Simon Farry, vice president of Rio Tinto's sales and marketing, said that the company will continue to utilize technology such as blockchain and end-to-end paperless solutions to enhance their customers' experience and bring the industry closer to a full cross-border digital trade future.