Mining giant Rio Tinto and trader Cargill, supported by HSBC Singapore and BNP Paribas, have successfully completed the first fully integrated paperless letter of credit (L/C) transaction in iron ore.

The transaction involved Rio Tinto selling a bulk shipment of iron ore originating in Australia to China for a Cargill customer.

Further progress

Building upon the first fully-digitised trade finance transaction completed in November 2018 (DC World News, 23 November 2018), Rio Tinto and Cargill have gone two steps further by extending this across the trading process from acceptance of key commercial terms through to delivery.

This was achieved by integrating Chinsay's Intelligent Contract Platform (ICP) with essDOCS' Document Exchange platform (CargoDocs DocEx), which reduced the time it takes to create, issue, approve and digitally sign commodity contracts from several days to under two hours.

Multiparty collaboration

Seamless flow of key contract attributes to Voltron made the issuance of the import L/C an efficient process for Cargill as the applicant and BNP Paribas as the issuing bank.

In using CargoDocs DocEx/DocHub, all relevant trade participants -Rio Tinto, Cargill, ship agent, shipowner, HSBC Singapore and BNP Paribas - collaborated on a single web-based platform.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.