Vietnam - Doomed Asian Bulk Carriers Go Down

Greed or incompetence results in tragic losses of lives, ships, cargoes

Dozens of Asian sailors are being lost in regional waters as a result of either greed or incompetence on the part of ship captains or their employers. In the last incident 22 sailors are assumed drowned after a large Vietnamese bulk carrier, the Vinalines Queen, owned by the state shipping line, sank suddenly off the Philippines on Dec. 25. Only one of the crew survived, getting onto a life raft and being picked up by a passing British ship five days later.

The story as reported by the wire services was of that one man’s survival. But the bigger and unreported story is why such a large vessel would go down so suddenly. The weather was bad but nothing like so bad as should cause a ship of this size any difficulties.

The answer almost certainly lies in its 54,000 ton cargo. Just like three Chinese ships which sank in late 2010, the vessel was carrying nickel ore from Indonesia to China. In the Vinalines Queen’s case it was from Morowali in central Sulawesi to Ningde in Fujian in China for use in the steel industry. Four ships lost in just 15 months, with the same cargo on the same approximate routes is no coincidence. It is a story of the dangers of loading nickel ore with high moisture content. In effect, instead of solid material being loaded, the ships are filled with what is little more than a slurry that can become highly unstable and suddenly capsize a ship in only moderately rough seas.

The International Maritime Organization has issued warnings about the hazards of such cargoes, which are exported from several countries including India and the Philippines. Intercargo, an industry association representing dry bulk ship-owners, has reported “rudimentary loading conditions in some of the exporting countries.” In some cases ships’ masters have refused to accept cargoes which they deem unsafe and where the moisture content appears to be much higher than that declared in Shippers’ Declarations. But masters may be unaware of the problem or feel under pressure from the ship’s owner or charterer to take what are clearly high risks. The death toll from the four nickel ships now totals 66 sailors. Fault also lies with exporting countries and companies that refuse to allow independent third party cargo surveyors. The previous sinkings were all Chinese-owned, Panama-registered vessels with Chinese crews –- the Hong Wei on Dec. 3, the Nasco Diamond on Nov.10 and the Jian Fu Star on Oct 27.

The loadings at Morowali were from mines owned by PT Tiga Baji, a unit of Jakarta-based Citra Buana Intan group. Although Indonesia exports nickel matte and ferro-nickel, mostly from the mines of PT Inco and PT Aneka Tambang, it also exports large quantities of nickel ore of 1.5-2.0 percent grade such as is now produced by Tiga Baji. China imported 12 million tons of ore in 2010 valued US$20 to US$40 a ton. There are plans for building a US$100 million ferro-nickel plant at Morowali but the project is not yet underway and China has offered to finance a US$6 billion nickel smelter in South Sulawesi. Meanwhile Indonesia also plans to ban from 2014 the export of nickel ore of less than 6 percent content to ensure that there is at least some local processing. However there are doubts that this can be achieved.

The Philippines is next after Indonesia as source of nickel ore for China. Most of its exports are in ore rather than concentrates. The biggest operation is that of Nickel Asia, in which Sumitomo has a major stake, in Surigao. Listed miner Marcventures also exports ore from a Surigao deposit as does Australian-invested Rusina from a Luzon mine. Most ore sales to China are made through Dunfeng International. There have not been any recent reports of losses of nickel ore ships leaving the Philippines but ships’ crews must now be aware of the dangers of sudden death they face if cargoes are more liquid than is safe.

Asia Sentinel

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