How Australia’s mining giants are helping China to globalise the yuan
Mining firms are increasingly using the yuan for financing and settlements, as China pushes to reduce its reliance on the US dollar Australia’s mining giants are aiding China’s push to internationalise its currency and reduce the dominance of the US dollar, as they gradually shift towards using the yuan for financing and settlements, analysts said. And the firm’s chief financial officer, Vandita Pant, said on the sidelines of the Macquarie Australia Conference last week that the firm was open to issuing bonds in yuan in the future. Other firms have made similar moves. Rio Tinto, the British-Australian mining behemoth, signed its first yuan-denominated iron ore spot contract as far back as 2019. A year later, it completed the industry’s first fully paperless yuan settlement with China’s Baoshan Iron & Steel using blockchain technology. John Welborn, chairman of Fenix Resources, a smaller iron ore producer, said earlier in May that his company would be “very enthusiastic” to secure low-cost Chinese debt – denominated in yuan – if it could be matched with yuan-priced commodities, as “that would make logical sense”.
