Nickel Ore Shipments: Lessons Learned from Losses

One of the most pressing problems for the bulk shipping industry is the safe carriage of nickel ore. The increasing demand for this commodity is fuelled by China’s thirst for nickel ore as it is the principal alloy component for stainless steel.

Chinese nickel ore imports have spiraled from nearly 5m metric tons (mt) in 2006 to near 50m mt in 2011. The bulk of these imports come from Indonesia, with the Philippines now running very close behind.

But this fast-expanding trade has been marred by the heavy price paid in terms of lives and vessels lost. The following details tell the story:

October 2010: Jian Fu Star, 13 fatalities

November 2010: Nasco Diamond, 21 fatalities

December 2010: Hong Wei, 10 fatalities

December, 2011: Vinalines Queen, 22 fatalities

February 2012: Harita Bauxite, 15 fatalities

In August, the 2012-built Trans Summer sank off Hong Kong, but all 21 crew were saved by rescue helicopters.

All these vessels were carrying nickel ore from Indonesia to China.

As at January 2012, nickel ore made up only 0.06% of shipping world trade, but accounted for 80% of the fatalities in the bulk trades.

Under the title Liquefying Bulk Cargoes, the American P&I Club has been giving technical presentations to pass on some of the lessons learned from these casualties. Dr. William Moore, senior vice president of managers Shipowners Claims Bureau Inc. and responsible for the club’s loss prevention and risk management programmes, presented to a meeting in New York of the American Institute of Marine Underwriters. This was followed by a similar presentation to the Association of Average Adjusters of the United States and Canada by John Poulson, senior vice president and principal surveyor, Atlantic Marine Associates, New York, and responsible for overseeing all American Club vessel surveys.

A Chinese language version of the presentation is being arranged by the club’s Shanghai office for showing to club members in Asia, particularly Greater China, and also at suitable seminars.

George Tsimis, senior vice president and head of claims at Shipowners Claims Bureau, also gave a brief presentation about the nickel ore trade, the rash of major casualties since 2010, and the Harita Bauxite incident, at the annual International Maritime Law Seminar in London late September. He noted that the death toll of the Indonesia-China nickel ore trade is about four times the rate of all seafarers killed by pirates around the world each year.

The American Club has first-hand experience of the difficulties attendant upon the loading, stowage and carriage of nickel ore, and this is thought to be the first time that a detailed presentation on this problem has been prepared for the shipping and insurance industries.

The slide presentation covers international regulations, the characteristics of liquefaction, the risks to the carrying vessel, responsibilities of the ship’s staff during loading, compliance with IMSBC Code (what is really going on?), and where do things go from here – should all stakeholders take a united stand?

In a summary of its findings and investigations, the American Club says that regulations are lagging behind the realities of the nickel ore trade, and that political, economic and commercial interests and pressures make any significant progress difficult. Industry stakeholders (eg, Intercargo, BIMCO, the International Group clubs, etc) are consequently challenged to produce unified solutions.

Finally, “if a ship sinks carrying nickel ore … it is most likely the cargo is the cause.”

american-club.com