The world's largest mining company intends to use blockchain to improve its supply chain processes

The world’s largest mining company by market value is looking to use the Ethereum blockchain to improve its supply chain processes.

BHP Billiton revealed at its second annual Blockchain Summit that it will use blockchain to record the movement of wellbore rock and fluid samples and better protect the real-time data generated during the transmission process. According to BHP geophysicist R Tyler Smith, the new system will benefit from its internal efficiencies while allowing it to work more effectively with partners.

Smith explained that BHP Billiton relies on suppliers at every stage of the mining process, contracting geologists and transport companies to collect samples and conduct analysis to inform business decisions on every continent.

“With blockchain, we will be sharing data with our suppliers and continually learning about the technology,” Smith told CoinDesk, adding:

“Everything is being tracked on spreadsheets now.”

Smith explained that with the help of a solution developed by blockchain startups BlockApps and Consensys, BHP intends to start requiring its suppliers to use the technology to collect real-time data this year.

While introducing this new technology into existing operations may seem risky, Smith said he is confident in the user experience the app will provide.

“The web application is designed specifically for suppliers. The dashboards and options provided to suppliers will streamline their work,” Smith said.

More broadly, Smith noted that mining companies in the UK and Australia are dispersed around the globe, and because of this, he foresees multiple ways that entities within them could use blockchain to enhance data sharing.

In addition to working with Ethereum, BHP is also running its node in the InterPlanetary File System (IPFS), a peer-to-peer file network protocol that is often used in conjunction with blockchain systems.

“We’re looking at more and more different use cases,” Smith added.

As of June this year, BHP Billiton was the largest mining company by market value in 2015 and 2014, according to a ranking by Big Four accounting firm PricewaterhouseCoopers.

Proof of origin

While the use of blockchain as a form of currency is still a long way off, BHP’s solution envisions how its existing processes could be replicated on a blockchain as a way to demonstrate the benefits of the technology.

Smith said the use cases demonstrate that blockchain solutions can enable decentralized file storage, multi-party data collection, and immutability, all of which he believes will strengthen the supply chain.

For example, he said the location of a mine shaft cannot be edited, but other aspects can be updated with new metadata to reflect the relevant information while also providing immediate access to that data.

At the bottom level, the blockchain does not move between addresses, but rather changes its state and updates data fields by logging in with a standard username and password.

While some elements of the system are the same, overall the platform offers new efficiencies.

“We can find more transparency into the analytical data provided by the vendor, or if we need to do a more robust analysis we can request it,” Smith said.

Transfer to production

The product launch is a milestone for BlockApps, the blockchain startup that built BHP’s solution and recently closed an undisclosed Series A funding round.

BlockApps founder Kieren James-Lubin believes that the cooperation with BHP Billiton has broad significance for the blockchain field.

“There are a lot of financial use cases out there, and this is the first example of blockchain technology being applied to a non-financial scenario,” he told CoinDesk.

James-Lubin said the app will also help his startup understand more about the needs of organizations, helping it improve and refine the user experience so that it can be accessed by those who are less familiar with the inner workings.

“It’s a huge help for us to be able to feed that back into the platform,” he said, concluding:

“High technology needs to cover more and more directions, and all the ideas come from enterprises.”