From twitter
BHP close to home with potash, almost as strategic as….
The Iron-Dollar Crack: BHP's Quiet Surrender to the Yuan
Late Friday afternoon, while markets were closing and Canberra was clocking off, BHP agreed to something that may define the decade.
From the fourth quarter of 2025, the world’s biggest miner will settle 30 per cent of its spot iron ore sales to China in RMB instead of US dollars. No ASX release. No press conference. Just a short industry wire, then silence.
Fifteen years ago, BHP CEO Marius Kloppers rewired the iron ore trade by killing the annual benchmark and launching spot index pricing. That move shifted power toward the miners and anchored the market in the US dollar system.
This time, the wheel turns the other way. By accepting RMB settlement, BHP has given ground on both price and currency. The world’s largest miner just helped Beijing take a step toward an RMB-priced commodity system.
This is how monetary power shifts, quietly and transaction by transaction.
There are no coincidences with timing. The news slipped out just before high-level US-Australia meetings in Washington.
Australia’s largest taxpayer and strategic export earner just validated China’s currency while Canberra was reaffirming AUKUS. Politically awkward, commercially decisive.
The White House will not miss the signal. Even its closest allies are now clearing trade in the rival bloc’s currency.
China already dominates refining and processing. What it lacked was control of settlement. RMB invoicing closes that loop.
Fortescue showed the other half of the system when it issued an RMB-denominated bond in China’s interbank market two months ago. Cheap funding, deep liquidity, and eager buyers. Western capital can't compete.
Together, BHP’s trade settlement and Fortescue’s bond show trade and finance beginning to align under China’s monetary architecture.
BHP’s long-term 2026 contracts are still in US dollars, for now. Once spot liquidity deepens, long-term settlements follow. Rio Tinto and others will face commercial pressure to match.
Global traders will need yuan hedging capacity. Banks in Singapore and Hong Kong will expand RMB clearing. Step by step, Australia’s export machine will wire itself into China’s financial system.
BHP’s move does not stand alone. Saudi Arabia is already accepting yuan for oil. Russia and Iran are settling energy in local currencies. BRICS countries are discussing a gold-linked trade settlement mechanism.
The world is dividing into two monetary blocs. One revolves around US capital markets, the other around Asian trade flows. Australia, through its miners, is drifting into the latter.
Each deal chips away at the network effects that give the dollar its reach. The dollar’s dominance erodes not through crisis, but through convenience.
Strategic Autonomy, Sponsored by China
Economically, the logic is clear. China is the buyer, and it wants to pay in its own currency. Politically, it is combustible.
Australia earns half its export income from China but relies on the United States for defence. Every yuan-settled shipment tightens that contradiction.
The BHP-RMB deal is the most geopolitically charged trade settlement since the petrodollar era began. It is a financial fault line disguised as a “commercial negotiation.”
And for a country that built its wealth selling iron ore into the dollar system, this moment completes a full circle.
Fifteen years ago, BHP anchored iron ore to the dollar system by killing the annual benchmark and adopting spot index pricing. Now it’s loosening that anchor, settling in yuan and drifting toward China’s financial tide.
Time to learn Mandarin... and probably hoard gold.
BHP close to home with potash, almost as strategic as….
The Iron-Dollar Crack: BHP's Quiet Surrender to the Yuan
Late Friday afternoon, while markets were closing and Canberra was clocking off, BHP agreed to something that may define the decade.
From the fourth quarter of 2025, the world’s biggest miner will settle 30 per cent of its spot iron ore sales to China in RMB instead of US dollars. No ASX release. No press conference. Just a short industry wire, then silence.
Fifteen years ago, BHP CEO Marius Kloppers rewired the iron ore trade by killing the annual benchmark and launching spot index pricing. That move shifted power toward the miners and anchored the market in the US dollar system.
This time, the wheel turns the other way. By accepting RMB settlement, BHP has given ground on both price and currency. The world’s largest miner just helped Beijing take a step toward an RMB-priced commodity system.
This is how monetary power shifts, quietly and transaction by transaction.
There are no coincidences with timing. The news slipped out just before high-level US-Australia meetings in Washington.
Australia’s largest taxpayer and strategic export earner just validated China’s currency while Canberra was reaffirming AUKUS. Politically awkward, commercially decisive.
The White House will not miss the signal. Even its closest allies are now clearing trade in the rival bloc’s currency.
China already dominates refining and processing. What it lacked was control of settlement. RMB invoicing closes that loop.
Fortescue showed the other half of the system when it issued an RMB-denominated bond in China’s interbank market two months ago. Cheap funding, deep liquidity, and eager buyers. Western capital can't compete.
Together, BHP’s trade settlement and Fortescue’s bond show trade and finance beginning to align under China’s monetary architecture.
BHP’s long-term 2026 contracts are still in US dollars, for now. Once spot liquidity deepens, long-term settlements follow. Rio Tinto and others will face commercial pressure to match.
Global traders will need yuan hedging capacity. Banks in Singapore and Hong Kong will expand RMB clearing. Step by step, Australia’s export machine will wire itself into China’s financial system.
BHP’s move does not stand alone. Saudi Arabia is already accepting yuan for oil. Russia and Iran are settling energy in local currencies. BRICS countries are discussing a gold-linked trade settlement mechanism.
The world is dividing into two monetary blocs. One revolves around US capital markets, the other around Asian trade flows. Australia, through its miners, is drifting into the latter.
Each deal chips away at the network effects that give the dollar its reach. The dollar’s dominance erodes not through crisis, but through convenience.
Strategic Autonomy, Sponsored by China
Economically, the logic is clear. China is the buyer, and it wants to pay in its own currency. Politically, it is combustible.
Australia earns half its export income from China but relies on the United States for defence. Every yuan-settled shipment tightens that contradiction.
The BHP-RMB deal is the most geopolitically charged trade settlement since the petrodollar era began. It is a financial fault line disguised as a “commercial negotiation.”
And for a country that built its wealth selling iron ore into the dollar system, this moment completes a full circle.
Fifteen years ago, BHP anchored iron ore to the dollar system by killing the annual benchmark and adopting spot index pricing. Now it’s loosening that anchor, settling in yuan and drifting toward China’s financial tide.
Time to learn Mandarin... and probably hoard gold.