Background
Members will be well aware of the risks of liquefaction of mineral ore cargoes shipped in bulk. The Association has provided regular updates to Members on both the technical causes as well as the practical and legal solutions to this persistent challenge.
If done well, the shipments can proceed safely and profitably. When they go wrong, it can mean not just financial loss through delay and dispute, but tragedy including the loss of the vessel and her crew can - and have - followed.
A new Frontier
While in the past the Association has addressed these warnings in relation to shipments originating out of certain Asian regions, there is now a new region opening up to the international mineral ore bulk trade : West Africa.
It is a region that has experienced, up to very recent times and beyond, war and conflict, as well as political instability.
Yet, it is also a region that has received new (or perhaps in part renewed) economic interest, in particular as China and India look to continue to diversify their sourcing of commodity requirements.
Countries that have been in the news, for a number of reasons, include Liberia and Sierra Leone, both of which are sources of mineral bulk ores for the international market. Both countries are recovering after periods of prolonged and intense conflict.
In Liberia in particular, foreign investment has come in to develop the iron ore trade. This has included the re-building of railways connecting the mining area in Yekepa to the port of Buchanan. Port infrastructure and installations have also been the recipient of significant foreign investment.
What Members can expect
When loading mineral ore in bulk in West Africa, Members need to be aware that infrastructure, know-how and administration may all be in a development phase and may not be of the same standard as Members have experienced elsewhere.
Cargoes such as iron ore fines may be transported from mines in open railway wagons or trucks. In some places the cargo is stored in covered storage areas, but in other areas storage may be out in the open.
Loading and transfer operations may be done by uncovered conveyor belts. In some areas the facilities may be more basic.
In some areas loading is done via barges on to smaller vessels up river which then take the cargo downstream on to the ocean going ships entered with Members. Ensuring that cargo arriving at Member's vessel in a sound condition can therefore meet with a number of practical challenges.
Countries such as Liberia and Sierra Leone have a tropical climate, rains can be frequent, strong and lengthy. It may be difficult to obtain accurate weather forecasts, and at night it can be difficult to visually check whether rain is about to fall.
As for the local Expertise, local Authorities may still be learning about this trade and may not yet be fully familiar with its challenges and what steps are required to deal with these.
Furthermore there may be limited or no satisfactory local facilities that can ensure proper cargo samples are taken and analysed prior to shipment, so that accurate cargo documents - in conformity with the IMSBC - are provided to the vessel before loading commences, as the Code requires.
The Association is aware that there have already been cases where cargoes have liquefied in the holds of vessels, and when that happens, there may also be local limitations in terms of equipment and expertise should a vessel have to be discharged.
Should a problem arise, it is likely that a difficult situation will follow which could entail significant delay : not least because local Shippers are likely to be either Government linked or otherwise locally significant and authoritative as to what happens in "their" Port.
What the Vessel needs to do
The Association repeats the previous advices given to Members as to what is good Loss Prevention to ensure safe shipment of mineral ore cargoes in bulk. These steps include:-
- The Master should not commence loading unless proper and valid cargo documentation has been provided
- In so far as is possible, the Vessel should seek to verify that cargo documents and actual cargo stockpiles match and the cargo comes from covered facilities
- Before loading commences, the Master should visually inspect the cargo and perform can tests (please keep in mind a can test is only a "fail" test, it is not a guarantee of cargo safety)
- If cargo is tendered after heavy rains, but with no new cargo certificates being tendered, the Master should seek immediate help from Correspondents and Technical Managers
- Any cargo that visually is too wet or fails a can test should be rejected
- If repeatedly the Shipper offers cargo which appears to be unsafe then the Master should stop loading and seek help, not least because indicates that shipping & cargo documents provided may not actually reflect the true state of the cargo
- If it rains, loading should cease, hatches be closed, and any loading equipment such as belts and hoppers should be freed of cargo by stevedores, temporary cargo storage facilities should be covered
- If there is any concern, the Master should stop loading, and immediately contact both local P&I Correspondents as well as Technical Managers for assistance
What Members can do
Members need to keep carefully in mind the risks involved with this type of cargo, and in particular the local challenges which the vessel may meet on any given voyage.
That means Members should ensure their responsible staff are alive to these issues and understand them, and that includes the Chartering Team.
Masters need to know they have the Owners' support, so that they feel that they can resist what may be strong local pressure to "just load".
Before fixing for this type of cargo from West Africa, Members should conduct an internal risk management analysis and ensure that appropriate due diligence is done on prospective counterparties both for financial strength as well as adequacy of insurance cover.
When considering a charterparty, Members need to keep in mind :-
- What trading limits will be agreed
- What safe Port, Berth, Anchorage, Loading Zone warranties are to be included
- Which cargoes are permissible
- Who will bear the risk of the cargo being safe
- Who will be legally and financially responsible for cargo operations
- Who will be responsible for export, tax and customs clearance
- Cargo operations should always be subject to express application of the IMSBC and SOLAS (and any other relevant convention or rules)
- What kind of pre-loading inspection and testing of cargo is to be done
- Who will bear the risk, time and cost of pre-loading inspections, testing as well as attendance of Surveyors during the loading until completion
- Can a comprehensive Bulk Mineral Ore Liquefaction Risk clause be incorporated into the charterparty
In Case of Emergency
If Members or the Master are concerned or should cargo in fact have liquefied in the vessel's holds, then Members are advised to contact the Association as a matter of urgency so that we can provide immediate assistance and advice.
Skuld 24 hour hotline : +47 952 92 200
Prepared with assistance from Graham Ashley ETIC sas/ Africa P&I Services.