The Metals and Minerals Digitalisation Forum (MMDF), of which Anglo American is a founding member, has co-published with the Baltic and International Maritime Council (BIMCO) a position paper calling for the acceleration of digitalisation in our industry.
It is estimated that 4 billion trade documents are in circulation around the world at any point in time. With recent global events such as the Covid-19 pandemic and the disruption of the shipping and supply chains due to lockdowns, these manual paper-based processes result in cost increases, delays, lost paper documents and errors. To shift away from paper-based trade, in April 2021 we set up MMDF together with BHP, Rio Tinto and Vale and with the support of BIMCO, have published a position paper that proposes solutions and aims to accelerate the adoption of digitalisation across the metals and mining supply chain, especially the use of electronic bills of lading (eBLs).
Depending on the commodity, the trade route and the counterparties involved, a single trade transaction in the metals and mining supply chain necessitates some 10-40 documents, each of which must be processed manually at every step of the way, and often through several intermediaries. According to a case study by digital trade platform MineHub, fulfilling one monthly order from a copper producer to an end-buyer involved teams across four continents, eight different logistics providers, 34 days on the water, four ocean shipments, 200 truck shipments and 216 documents.
The adoption of digitalisation will allow information to move seamlessly across borders and between stakeholders, from buyers to sellers, financiers, insurers, shippers, logistics and customs, and is expected to reduce trade costs. Digitalisation also reduces the carbon footprint of trade, promoting more sustainable working practices.
One area of focus is the eBLs, which has been gaining momentum within the iron ore supply chain. Between the four MMDF members, around 1 billion tonnes of iron ore are shipped on average per year. These also contributed to an increase in the amount of iron ore carried on eBLs by 80% from 2021-2022, equivalent to 100 million tonnes of cargo. eBLs now account for more than 20% of their annual trade volumes for iron ore.
Timo Smit, Anglo American’s Executive Head of Marketing of Iron Ore, said, “Anglo American has always been an advocate for the adoption of technology to drive innovation and efficiency in our products’ supply chains. This position paper outlines the key challenges the industry faces in digitalisation and recognises that it will take a whole-of-industry effort to tackle them."
Earlier in March 2023, MMDF members had also supported BIMCO in 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 fulfilled this our pledge in 2023.