Bulk Mineral Trades & Liquefaction


In our last article we focused on bulk cargo liquefaction associated with the three key mineral ore trades of iron, nickel and bauxite, from different countries in Asia that experience significant monsoon/rainy seasons. Unrefined ore movements, however, are rapidly increasing in certain other regions also vulnerable to significant rainy seasons. In particular, West Coast African export volumes of unrefined iron ore and bauxite from countries such as Sierra Leone, Guinea and Liberia, are set to rapidly increase.

These ‘frontier’ countries are eager to take advantage of the economic benefits of monetizing their mineral ore deposits, both through royalties and taxes and stimulating local employment. Whilst exports of unrefined ores from West Coast Africa are not new, port infrastructural development is starting from a low base or has been idle for long periods and may struggle to keep pace as rail movements from inland mine sites increase. As export volumes increase so will the likelyhood for a liquefaction incident occurring, especially since all three countries are exposed to 6 month long rainy/monsoon seasons, and have mining operations typically in excess of 200km inland. 

 This analysis argues that given the track record of continuing liquefaction incidents in these mineral ore trades from regions vulnerable to what are now increasingly unpredictable rainy seasons, domestic only driven implementation of international regulations is simply not enough. Instead, more proactive steps should be considered by other interested stakeholders, in addition to those ordinarily undertaken on behalf of shippers by the designated ‘competent authority’,  to help provide more robust management of these risks where such trades continue. 

 A good first step would be for the International Group of P&I Clubs to proactively intervene on the way in which their collective ship owning and operating memberships’ conduct of such trades is carried out. This has been done for the unrefined nickel ore trade, specifically out of the Philippines and Indonesia since 2012, by way of an IG Circular in response to a string of casualties. Aside from mandatory notification, one possible requirement in addition might be that particular clausing also be incorporated into all contemplated fixtures for the carriage of a cargo that has the potential to liquefy, the BIMCO clause is one such example.

Read the full analysis here

DNV GL has also published guidelines on cargo liquefaction. You can find them here.


2. Mar. 2016