The four mining companies have formed a working group, the Metals and Mining Digitalization Forum (MMDF) and, with the support of BIMCO, aim to engage all parties involved in the digitalisation of trade, from solution providers to legislators, in an initiative to break down the barriers to a digital future.
The position paper outlines the progress made so far in digitalising the metals and mining trade, highlights the barriers that MMDF members are facing in achieving full end-to-end digitalisation, and describes the significant benefits to the industries, and thereby the global economy, if trade digitalisation is achieved.
The economic benefits of trade digitalisation are unmistakable. According to a report by the International Chamber of Commerce (ICC), an estimated 4 billion trade documents are in circulation. If stacked on each other, the documents would be 520,000 meters high and constitute about half a million trees, testifying to the fact that paperless trade reduces the carbon footprint of trade.
“Manual paper-based processes are a source of cost, delay, error, inefficiency and risk. One research report shows that these inefficiencies contribute to a staggering $507 billion of working capital trapped in S&P 1500 supply chains alone,” said Grant Hunter, Director, Standards, Innovation and Research at BIMCO.
Often, legal uncertainty, interoperability of various platforms and the lack of comprehensive standards are cited by industry stakeholders as barriers and challenges that need to be resolved.
“As a working group, the MMDF aims to bring forth the next wave of digitalisation at speed, drawing on insights and synergies from all stakeholders to advocate for a conducive environment and greater adoption of digital tools,” the mining majors said in a joint statement.
Global events such as the Covid-19 pandemic and the disruption of shipping and supply chains due to lockdowns, lost paper documents and errors clearly highlight the need for change. Over the past decade, each of the founding members of the MMDF has invested in digital transformation within mining processes, operations and supply chains. At the forefront of trade digitalisation, the founding members have carried out landmark digital-first transactions.
An area of initial focus is the Electronic Bill of Lading (eBL) which is gaining traction in the iron ore trade. Based on information provided by MMDF members, and consolidated by BIMCO, MMDF members together account for around 1 billion tonnes of iron ore shipped on average per year. Between 2021 and 2022, these leading mining companies contributed to an increase in the amount of iron ore carried on eBLs by 80%, equivalent to 100 million tonnes of cargo. eBLs now account for more than 20% of their annual trade volumes for iron ore.
In March 2023, BIMCO launched its “25 by 25 pledge” where shippers commit to target moving 25% of their annual seaborne trade volume for at least one commodity on eBLs by 2025. Anglo American, BHP, Rio Tinto and Vale have all supported the pledge.
“Their signing up is a yet another testament to their resolve to digitalise the end-to-end global trade process,” Hunter said.
About Anglo American
Anglo American is a leading global mining company and our products are the essential ingredients in almost every aspect of modern life. Our portfolio of world-class competitive operations, with a broad range of future development options, provides many of the future-enabling metals and minerals for a cleaner, greener, more sustainable world and that meet the fast growing every day demands of billions of consumers. With our people at the heart of our business, we use innovative practices and the latest technologies to discover new resources and to mine, process, move and market our products to our customers – safely and sustainably.
BHP is a leading global resources company with approximately 80,000 employees and contractors, primarily in Australia and the Americas. BHP’s products are sold worldwide, and it is among the world’s top producers of major commodities, including iron ore, copper, nickel, and metallurgical coal.
About Rio Tinto
Rio Tinto is a leading global mining and materials company. We operate in 35 countries where we produce iron ore, copper, aluminium, critical minerals and other materials needed for the global energy transition and for people, communities, and nations to thrive. We have been mining for almost 150 years and operate with knowledge built up across generations and continents.
Vale is a global mining company that exists to improve life and transform the future together. One of the world's largest producers of iron ore and nickel and a major copper producer, Vale is headquartered in Brazil and operates around the world. Its operations comprise integrated logistics systems, including approximately 2,000 kilometres of railways, marine terminals and 10 ports distributed around the globe. Vale has the ambition to be recognised by society as a benchmark in safety, the best-in-class reliable operator, a talent-driven organization, a leader in sustainable mining, and a reference in creating and sharing value.
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