Australian Coal Report – 19 August – Issue 863, by Marian Hookham
By September, Japanese buyers of Australian coal are expected to become the forerunners in the use of blockchain technology as a tool to facilitate settling coal transactions with less paperwork.
Following last year’s trial of the CommChain system by two Queensland coal miners, the technology was launched recently, offering, at this stage, support for the trade settlement component of a coal transaction.
The technology is now being rolled out as a service to clients by logistics company, TransCoal, which manages around 35 mt/y of coal on behalf of a number of Queensland producers. TransCoal’s Faith Dempsey is a co-founder of CommChain.
The first shipment of Australian coal that will use the technology is expected to sail in early September from Queensland to Japan. It is understood the platform will be used for trade settlements including executing the vessel nomination and the commercial invoice, including all supporting commercial documentation.
The goal of the technology is to replace the existing paper system with a digital platform that can safely replace a range of paper based and other documentation to expedite the flow of coal.
Ultimately, the technology could be applied to Bills of Lading and Letters of Credit but these are further in the future, given some of the legal implications of these documents.
CommChain founder Gary Zamel, said the ‘Trade Settlement Offering’ will revolutionise the trading process.
“The Trade Settlement Offering is a proactive response to global disruption. We’ve cut out the paper and increased the speed of the trade settlement with a platform that is secure,” Zamel said.
“Buyers, sellers and shipowners can network directly to draft and finalise contracts of carriage for the first time. “Shipowners are able to release digitised contracts of carriage instantly and laboratories can provide their vessel quality results in a secure and immutable environment.”
According to its proponents, Japan, Korea and Taiwan are the initial targets. Leading Japanese trading houses Sojitz and Marubeni are shareholders in CommChain.
“It relies on everyone being on the platform, including buyers, shipowners, sellers and laboratories,” the company said.