Vale S.A.’s first blockchain transaction, which received a regional award in Asia recently, paved the way for a more efficient and sustainable future in trade finance
Last September, Vale completed its first pilot blockchain-enabled transaction for 170,000 tonnes of Brazilian Blend Fines (BRBF) from the Teluk Rubiah Maritime Terminal (TRMT) in Malaysia to China. It was Vale's first sale of iron ore using the technology. The transaction was recognized yesterday as the Best Trade Finance Solution transaction in the Asian region, in the digital solution category, at The Asset Triple A Treasury, Trade, Sustainable Supply Chain and Risk Awards 2021.
The Asset, based in Hong Kong, is one of Asia's most respected business publications. Vale achieved the award in collaboration with Standard Chartered Malaysia.
The transaction – underpinned by the bank’s digital capability in supporting cross-border trade using cutting-edge technology platforms – is just part of the digital transformation in all areas of Vale’s sales operations and trade finance. The use of blockchain and electronic documents allowed for faster, more transparent and secure international transactions. The high level of security and transparency was made possible by the use of the integrated system, in a single platform. There was real-time visibility of documentation to all stakeholders, improving the level of trust and transparency among all parties involved.
It allowed Vale to achieve better customer centricity, providing a better transaction experience for the customer. In addition to better security and efficiency, the blockchain transaction was also more environmentally efficient than traditional transaction methods. The transaction was carried out online, with minimal paperwork and document transport.
The reduction in carbon emissions generated from the transaction, when replicated in other Vale transactions in the future, will significantly contribute to Vale's goal of becoming a carbon neutral company by the year 2050. The transaction's sustainability proposal also aligns with Standard Chartered’s goal of achieving zero emissions from its operations by 2030 and from its financing by 2050.
The success of Vale's foray into a blockchain trade finance solution is a testament to the company's commitment to driving the mining industry towards a more sustainable and efficient future. It also highlights the readiness of Vale's Trade Finance team in Malaysia to develop and champion future-ready trading solutions to better serve Vale's customers in the region and globally.