The partnership will enable trades on MineHub to flow into the Contour network, where a digital letter of credit (LC) can be created, replacing the traditional paper-based process. This improves transparency and reduces presentation time from up to two weeks to under 24 hours, the companies added.
The two firms also intend to roll out functionality that provides a time status on the progress of LCs within the MineHub platform.
The global mining and metals market has traditionally suffered from inefficiencies due to manual, paper-based processes and a lack of transparency among supply chain participants. By digitizing the supply chain, increasing levels of automation and providing greater traceability, MineHub aims to streamline operations, improve profit margins and contribute to sustainable supply chains and responsible sourcing.
The platform allows miners to capture mineral digital contracts with buyers and streamline post-trade operations, including document flow, financing, environmental, social and governance reporting, and logistics.
Launched in 2019, MineHub is being used by a number of companies including BHP Group and Vale, each of which have used it to separately trade iron ore with steel producer China Baowu Steel Group.
Contour is a digital trade finance network for banks and corporates. Over 50 banks and corporations joined a technology trial of its platform in 2019, and banks including HSBC, ING, Standard Chartered as well as companies including Rio Tinto and Cargill have all facilitated trades, and trade finance using the platform.
According to a World Economic Forum white paper, digital transformation is estimated to generate more than $320 billion of value in the metals and mining industry over the next decade, including $77 billion through integration of technologies that enable better data exchange among participants.
Arnoud Star Busmann, MineHub chief executive officer, said the partnership with Contour is an example of how network and platform interoperability create benefits for their shared trade ecosystem.
“MineHub is focused on digitising the end-to-end post trade management of physical commodity transactions. By connecting the Contour network, this now also includes seamless access to trade finance instruments like LCs from a fast-growing group of global banks,” he added.