Arafura Rare Earths secures up to $300 million in finance from Canada

ALL CAPITALI$M IS STATE CAPITALI$M

Reuters | May 27, 2024 | 

Pre-construction site inspection at the Nolans project. Credit: Arafura Rare Earths

Arafura Rare Earths said on Monday it had secured up to $300 million in debt financing from Export Development Canada (EDC) for its Nolans project in Australia’s Northern Territory.


The funding comes after Australia earlier this year pledged up to A$840 million ($556.42 million), as Western nations diversify the global supply chain for rare earths after Covid-related snarls highlighted China-linked supply risks. China produces more than 80% of the world’s rare earths.

Shares of the rare earths explorer climbed as much as 7.7% by 0115 GMT, compared to a 0.6% rise in the broader benchmark index.

The Nolans project is slated to be the country’s third rare earths processing plant after Lynas Rare Earths’ Kalgoorlie operations and Iluka Resources’ Eneabba heavy rare earths plant, which is under development.

Arafura said it had received conditional approval for 68% of the targeted $775 million senior debt funding for the project, bringing it closer to a final investment decision.

In November 2022, Arafura estimated capital costs and contingency for the Nolans project at about A$1.59 billion, according to the company’s 2023 annual report.

The company, whose largest shareholder is Australia’s richest person Gina Rinehart, already has supply agreements with Hyundai Motor, Kia Corp and Siemens Gamesa Renewable Energy. It also has a provisional agreement with General Electric.

The funding arrangement between Arafura and EDC was facilitated by a unit of General Electric, the Australian company said.

Arafura is working with a group of foreign and domestic commercial banks to seek the remaining funding for the project.

($1 = 1.5092 Australian dollars)

(By Aaditya Govind Rao; Editing by Tom Hogue, Subhranshu Sahu and Rashmi Aich)

Berkeley seeks $1bn in damages from Spain over uranium mine dispute

Reuters | May 28, 2024 | 

Credit: Berkeley Energia

Australian mining group Berkeley Energia said on Tuesday it had filed a request for an arbitration to seek $1 billion in damages from the Spanish government after it refused to give final approval for its uranium mine project.


The Retortillo project, Berkeley’s main asset, received preliminary approval in 2013, but Spain’s Energy Ministry refused to approve the project located near the central city of Salamanca first in 2021 and again in 2023.

A spokesperson for the Energy Ministry said the government blocked the project based on a report from the country’s Nuclear Security Council but declined to comment on the arbitration.

Berkeley filed an arbitration at the World Bank’s International Centre for Settlement of Investment Disputes, the company said in a filing to the Madrid stock market regulator.

It accuses the government of infringing on its rights under an international agreement known as the Energy Charter Treaty, designed to promote energy security through the operation of more open and competitive energy markets.

Berkeley said it was still committed to the project and was ready to collaborate with Spain for a resolution and hopeful for near-term discussions.

The company has said in the past the mine would require a 250-million-euro ($271.85 million) investment and would have created more than 2,500 jobs.

Shares in Berkeley were up 5.4% following the arbitration disclosure.

($1 = 0.9196 euros)

(By Marta Serafinko; Editing by Inti Landauro, Jan Harvey and Bernadette Baum)

Lithium in Marcellus shale gas wells could potentially meet part of US demand

Staff Writer | May 29, 2024 

Fracking wastewater. (Image by Faces of Fracking, Flickr.)

A new analysis using compliance data from the Pennsylvania Department of Environmental Protection suggests that if it could be extracted with complete efficiency, lithium from the wastewater of Marcellus shale gas wells in Pennsylvania could supply up to 40% of the United States demand.


Finding lithium in the wastewater in the Marcellus shale wasn’t a surprise: Researchers had analyzed the water recycled in hydraulic fracking and knew that it picked up minerals and elements from the shale. “But there hadn’t been enough measurements to quantify the resource,” Justin Mackey, a researcher at the National Energy Technology Laboratory, said in a media statement. “We just didn’t know how much was in there.”

Thanks to Pennsylvania regulatory requirements, his team was able to figure it out.

Companies are mandated to submit analyses of wastewater used in each well pad and lithium is one of the substances they must report. “And that’s how we were able to conduct this regional analysis,” Mackie said.

Meeting 30% to 40% of the country’s lithium needs would bring the country much closer to the US Geological Survey’s requirements, which demand all lithium to be produced domestically by 2030.

There’s also lithium-rich wastewater outside of the state’s boundaries. “Pennsylvania has the most robust data source for Marcellus shale,” Mackey said. “But there’s lots of activity in West Virginia, too.”

The next step toward making use of this lithium is to understand the environmental impact of extracting it and to implement a pilot facility to develop extraction techniques.

“Wastewater from oil and gas is a burgeoning issue,” the scientist pointed out. “Right now, it’s just minimally treated and reinjected.”

However, in his view, wastewater has the potential to provide a lot of value. After all, “it’s been dissolving rocks for hundreds of millions of years — essentially, the water has been mining the subsurface.”

Arizona Lithium Initiates Production Drilling at Prairie Project in Saskatchewan

• 28-May-2024 
• Journalist: Shiba Teramoto

Arizona Lithium Limited (ASX: AZL, AZLO, AZLOA, OTC: AZLAF), known as "Arizona Lithium" or "AZL", a company dedicated to sustainable development with a focus on two significant lithium projects in North America, namely the Big Sandy Lithium Project ("Big Sandy") and the Prairie Lithium Project ("Prairie"), announces the commencement of drilling at the Prairie Project in Saskatchewan, Canada. The drilling and completion operations will span Pad #1, Pad #2, and Pad #3 in the upcoming months. In June, production and disposal testing will kick off for the wells on Pad #1. The initial two wells on Pad #1 are being drilled vertically. Well #1 is slated to assess the Souris River and Duperow Formations, while Well #2 will target the Dawson Bay Formation and specific disposal sites within the Madison Group. Establishing both production and disposal wells is a critical milestone in advancing the Prairie Project Development, marking a significant stride towards lithium commercial production.

Paul Lloyd, the Managing Director of Arizona Lithium, remarked, "I am excited to announce the commencement of our drilling program as planned. With the rig now operational on-site and the first well initiated, our focus is on drilling our lithium wells efficiently. Operating within a mature and well-established oil and gas province provides us with access to the necessary expertise and services to advance our project rapidly. These wells are being drilled to significant depths by a robust oil drilling rig. The execution of a drilling and completion program of this scale requires the collaboration of over 40 service providers and the contribution of hundreds of individuals. I extend my gratitude to all the vendors, their employees, and the local community for their support of our project. We eagerly anticipate providing shareholders with updates as the extensive drilling program progresses."

The Prairie Lithium Project by AZL is situated in Saskatchewan, Canada, within the Williston Basin and boasts a resource estimate of 6.3 million tonnes (MT) of lithium carbonate equivalent (LCE), comprising 4.5 MT LCE in the Indicated category and 1.8 MT LCE in the Inferred category. Being located in one of the world's foremost mining-friendly jurisdictions, these projects benefit from convenient access to critical infrastructure such as electricity, natural gas, freshwater, well-maintained highways, and railways. Additionally, the projects prioritize strong environmental stewardship, with Arizona Lithium striving to minimize freshwater usage, land footprint, and waste generation, aligning closely with the company's sustainable ethos in lithium development.

Post-Covid, China is back in Africa and doubling down on minerals

Reuters | May 28, 2024 

Xi Jinping Image: Thierry Ehrmann

China’s flagship economic cooperation program is bouncing back after a lull during the global pandemic, with Africa a primary focus, according to a Reuters analysis of lending, investment and trade data.


Chinese leaders have been citing the billions of dollars committed to new construction projects and record two-way trade as evidence of their commitment to assist with the continent’s modernization and foster “win-win” cooperation.

But the data reveals a more complex relationship, one that is still largely extractive and has so far failed to live up to some of Beijing’s rhetoric about the Belt and Road Initiative, President Xi Jinping’s strategy to build an infrastructure network connecting China to the world.

While new Chinese investment in Africa increased 114% last year, according to the Griffith Asia Institute at Australia’s Griffith University, it was heavily focused on minerals essential to the global energy transition and China’s plans to revive its own flagging economy.

Those minerals and oil also dominated trade. As efforts falter to boost other imports from Africa, including agricultural products and manufactured goods, the continent’s trade deficit with China has ballooned.

Chinese sovereign lending, once the main source of financing for Africa’s infrastructure, is at its lowest level in two decades. And public-private partnerships (PPPs), which China has touted as its new preferred investment vehicle globally, have yet to gain traction in Africa.

The result is a more one-sided relationship than China says it wants, one that is dominated by imports of Africa’s raw materials and that some analysts argue contains echoes of colonial-era Europe’s economic relations with the continent.

“This is something late-19th century Britain would recognize,” said Eric Olander, co-founder of the China-Global South Project website and podcast.

China rejects such assertions.

“Africa has the right, capacity and wisdom to develop its external relations and choose its partners,” China’s foreign ministry wrote in response to Reuters‘ questions.

“China’s practical support for Africa’s path of modernization in accordance with its own characteristics has been welcomed by an increasing number of African countries.”
A pivot with potential?

China’s engagement in Africa, a focus of the Belt and Road Initiative (BRI), grew rapidly in the two decades before the Covid-19 pandemic. Chinese companies built ports, hydropower plants and railways across the continent, financed mainly through sovereign loans. Annual lending commitments peaked at $28.4 billion in 2016, according to the Global China Initiative at Boston University.

But many projects proved unprofitable. As some governments struggled to repay loans, China cut lending. Covid-19 then pushed it to turn inward, and Chinese construction projects in Africa fell.


A rebound in sovereign lending is not expected.

Policymakers in Beijing have instead been pushing Chinese companies to take equity stakes and operate infrastructure they build for foreign governments. The aim, China analysts say, is to help companies win higher-value contracts and, by giving them skin in the game, ensure the projects are economically viable.

Lending to Special Purpose Vehicles (SPVs), perhaps the most common means of PPP infrastructure investment, has been growing as a proportion of China’s overseas loans, according to figures shared exclusively with Reuters by AidData, a research centre at US university William & Mary.


The $668 million Nairobi Expressway, a public-private partnership built and run by the state-owned China Road and Bridge Corporation (CRBC), could be proof of concept for the model in Africa. Since it opened in August 2022, the toll road has been allowing commuters to speed above the Kenyan capital’s notorious traffic snarls, beating revenue and usage targets.

Daily average use in March was already 57,000 vehicles, exceeding a 2049 target of around 55,000 set by CRBC in a 2019 presentation on the project’s economic viability seen by Reuters.

But few companies are following CRBC’s example in Africa. While globally some 45% of Chinese non-emergency lending was to SPVs from 2018 to 2021, the most recent year for which AidData figures are available, the figure was only 27% for Africa.

Analysts point to a number of likely reasons, including a lack of legal frameworks for PPPs in many African countries and the view among some Chinese companies – many of them relative newcomers to PPPs – that African markets are risky.

China’s foreign ministry did not directly address a request for comment on the lower SPV figures for Africa. But it said the government encourages Chinese companies to “actively develop new modes of cooperation” such as PPPs to bring more private investment to Africa.
Growing engagement

The Griffith Asia Institute put China’s total engagement in Africa – a combination of construction contracts and investment commitments – at $21.7 billion last year, making it the largest regional recipient.

Data from the American Enterprise Institute, a Washington-based think tank, showed investments hitting nearly $11 billion in 2023, the highest level since it began tracking Chinese economic activity in Africa in 2005.

Some $7.8 billion of that went to mining, like Botswana’s Khoemacau copper mine, which China’s MMG Ltd bought for $1.9 billion, and cobalt and lithium mines in countries including Namibia, Zambia and Zimbabwe.

The hunt for critical minerals is driving infrastructure construction as well. In January, for example, Chinese companies pledged up to $7 billion in infrastructure investment under a revision of their copper and cobalt joint venture agreement with Democratic Republic of Congo.

Western and Gulf powers are also racing to lead the world’s energy transition, with the United States and European governments backing the Lobito Corridor, a rail link to bring metals from Zambia and Congo to Africa’s Atlantic coast.

African leaders have struggled, however, to raise financing for some other priority projects.

Despite the success of the Nairobi Expressway, for example, work on several Kenyan roads stalled when the government ran out of money to pay the Chinese construction firms.

During a visit to Beijing last October, President William Ruto asked for a $1 billion loan to complete the projects.

A Chinese foreign ministry spokesman, Wang Wenbin, said discussions about the request were ongoing. Kenya’s finance ministry did not respond to a request for comment.

The final phase of a railway line intended to traverse Kenya from its main port to the border with Uganda has been in similar limbo since Chinese financing dried up in 2019. Uganda cancelled the contract for its portion of the line in 2022, after Chinese backers pulled out.

When asked about the decline in lending for African infrastructure, Chinese officials point to a pivot to trade and investment, arguing that BRI-generated trade boosts Africa’s wealth and development.

Two-way trade reached a record $282 billion last year, according to Chinese customs data. But at the same time, the value of Africa’s exports to China fell 7%, mainly due to a decline in oil prices, and its trade deficit widened 46%.

Chinese officials have sought to assuage the concerns of some African leaders.

At a summit in Johannesburg last August, Xi said Beijing would launch initiatives to support the continent’s manufacturing and agricultural modernization – sectors African policymakers consider key to closing trade gaps, diversifying their economies and creating jobs.

China has also pledged to increase agricultural imports from Africa.

Such efforts, for now, are coming up short.

With one of Africa’s largest trade deficits to China, Kenya has been pushing to increase access to the world’s second-largest consumer market, recently gaining it for avocados and seafood. But cumbersome health and hygiene regulations mean Chinese consumers remain out of reach for many producers.

“The Chinese market is a new one,” said Ernest Muthomi, CEO of the Avocado Society of Kenya. “It was a challenge because you have to install the equipment for fumigation.”

Of 20 billion shillings ($150.94 million) worth of avocados exported last year, just 10% went to China.

Overall, Kenyan exports to China fell over 15% to $228 million, Chinese customs data showed, as a decline in titanium production led to a drop in shipments of the metal – a key export to China.

But Chinese manufactured goods kept coming.

That’s not sustainable, said Francis Mangeni, an advisor at the Secretariat of the African Continental Free Trade Area.

Unless African nations can add value to their exports through increased processing and manufacturing, he said, “we are just exporting raw minerals to fuel their economy.”

($1 = 132.5000 Kenyan shillings)

(By Rachel Savage, Duncan Miriri, Elias Biryabarema, Joe Cash, Nyasha Chingono, Chris Mfula and Felix Njini; Editing by Joe Bavier and Alexandra Zavis)

Marxists.orgwww.marxists.org/archive/bukharin/works/1917/imperial/

Nikolai Bukharin: Imperialism and World Economy

Lenin. Written: 1915 and 1917. Source: Nikolai Bukharin "Imperialism and World Economy", Monthly Review Press, no date. First Published in English: Nikolai ...

EU, Australia sign critical minerals pact to diversify supply chains

Bloomberg News | May 28, 2024 | 

Signing ceremony of the EU-Australia Strategic Partnership on Critical Raw Materials. Credit: European Commission

Australia and the European Union have struck an agreement to boost cooperation and investment in critical minerals, part of a drive by Western nations to loosen China’s grip on supply chains of materials essential to high-tech and green manufacturing.


Ministers in Canberra and Brussels signed a memorandum of understanding on Tuesday, which will be followed by the joint development of “concrete actions” over the next six months to improve collaboration on critical minerals projects.

“Australia is a like-minded partner and a global leader when it comes to critical raw materials,” EU Commissioner for Trade Valdis Dombrovskis said in a statement. “This partnership marks a major step forward in our efforts to secure a more sustainable supply of critical raw materials for the EU, whilst fostering investment in Australia.”

The US and its allies have been working in recent years to establish alternative sources of critical minerals such as lithium, cobalt and nickel, which are used in the manufacturing of equipment including computer chips, solar panels and military hardware. China currently controls much of the supply, leaving the US potentially exposed to export restrictions given intensifying strategic competition between Washington and Beijing.

Access to critical materials has become a serious concern for the EU due to the potential for China to “weaponize” its dominance of the sector.

Australia has vast, largely untapped deposits of several critical minerals and has been attempting to build up its domestic industry through financing vehicles and tax incentives, including new measures announced in its May budget.

Under the MoU signed on Tuesday, Australia and the EU will look to boost investment in critical mineral projects, including joint ventures, as well as cooperating on research and innovation.

(By Ben Westcott)

Glencore to consult investors on coal spinoff after Teck deal

Bloomberg News | May 29, 2024 | 

Image courtesy of Glencore.

Glencore (LON: GLEN) will start consulting with shareholders on the future of its coal business as soon as its deal to buy Teck Resources Ltd.’s mines closes later this year.


Crucially, Glencore said that should the majority of shareholders support keeping its coal mines, the company will not proceed with a vote.

Glencore’s coal business is one of its most profitable units, driving record returns in recent years, and the plan to exit the fossil fuel and list a new company in New York represented a major strategic pivot under current boss Gary Nagle. The company had long resisted pressure to follow rivals in jettisoning coal, arguing that the world still needed the dirtiest fuel and that it was more responsible to run the mines itself than sell them.

Bloomberg reported last month that several of Glencore’s largest shareholders believe the company should retain its coal assets.

The deal to buy Teck’s coal mines is expected to close in the third quarter.

Once the acquisition closes, Glencore will immediately consult with investors, Chief Executive Officer Nagle said at the company’s annual shareholder meeting on Wednesday. That will dictate the firm’s next move on coal, he said.

Nagle said that if the majority of shareholders want to keep coal, there will be no vote. Should the consultation show support, there will be a binding vote.

That approach would potentially allow Glencore to avoid some of its shareholders having to vote against a company proposal should they want to keep coal.

The company’s largest shareholders are former CEO Ivan Glasenberg, the Qatar Investment Authority and BlackRock Inc.

Glencore, the world’s largest shipper of thermal coal with a market capitalization of about $75 billion, had said it intended to spin the business off within two years of closing a deal to buy the steelmaking coal assets of Teck.

(By Thomas Biesheuvel)

Mining M&A slips as firms lawyer-up to fight regulators

Colin McClelland | May 29, 2024 |

The U.S. Steel pig iron caster at the Gary Works, Ind. The Nippon deal faces scrutiny. Credit: U.S. Steel

Global mining dealmaking is falling this year but political drama and litigation are escalating in the United States and Canada, while other trends include paying premiums to get copper and guarding against liability at former mine sites.


The value of proposed, pending, completed and terminated mergers and acquisitions in the industry declined 12.5% to $74.2 billion this year to mid-May compared with the same period last year, according to Bloomberg data. The figures were presented at a May 20-22 conference run by the Society for Mining, Metallurgy & Exploration in New York.

Bids valued at $51.2 billion to acquire Anglo American (LSE: AAL), including $39.6 billion by BHP (NYSE: BHP; LSE: BHP; ASX: BHP) and $10.9 billion in a proposal with undisclosed details by Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO), dominate the total, the data show.

M&A across all industries rose 16%, Todd Sibilla, a commodity applications specialist at Bloomberg, told the conference. But deals with diversified miners, like Glencore (LSE: GLEN) buying Teck Resources’ (TSX: TECK.A, TECK.B; NYSE: TECK) coal assets last year, plunged 94% this year compared with 2023, Sibilla said.

The Canadian uproar last year over Glencore’s interest in buying Teck, while the Swiss giant employs more Canadians than homegrown Teck, was cited as an example of a rising trend of misguided resource nationalism leading to court cases over blocked deals, according to a panel of lawyers at the annual conference on trends in mining finance. The panel also pointed to the bipartisan opposition in America to Nippon Steel buying US Steel while Japan is a major Western ally.

Court battles

An increasing number of deals are in litigation against the US government to overturn decisions and the number of abandoned deals in the last two years hit a record, said George Karafotias, partner in the M&A group at Shearman & Sterling in New York.

“It is a worrying trend and it’s the number one issue that we think about when we advise clients on bigger strategic deals,” he said. “A lot of work goes into anticipating and planning for an extensive regulatory review and part of that can also include coming up with a litigation strategy.”

US Steel shareholders approved Nippon Steel’s $14.9 billion takeover in April. The target company, formed more than a century ago, was the world’s biggest corporation, accounted for two-thirds of all steel produced in the US during the Second World War and employed 340,000 people.

Now, its contribution to defence is minor, it employs 23,000 and needs investment to modernize, Karafotias said. Nippon is not state-owned and Japan is a strong Western ally, he added.

President Joe Biden opposes the deal but hasn’t vowed to use executive authority to block it, though Donald Trump has.

“It begs the question: if Nippon Steel is an unacceptable buyer of this company, then who is?” Karafotias asked. “It may chill investment or further foreign investment in certain sectors in the US, so hopefully common sense prevails and we get there on this deal.”

Nippon has promised to keep the US Steel name, the headquarters in Pittsburgh, not to transfer jobs or productions overseas and to increase capital spending and technology sharing, the lawyer said. However, he noted Nippon operates in China and shares technology there.

“It wouldn’t surprise me if these aren’t things that can be sort of worked through and measures put in place to protect US interests,” he said. “Come November and once we get past the election, there may be scope to see this deal gets done.”

Teck talk

North of the border, Glencore’s pursuit of all of Teck was interesting for the political drama that BC Premier David Eby and federal opposition leader Pierre Pollievre created, even though they had no role in regulatory approvals, said Steven McKoen, a partner at law firm Blake, Cassels & Graydon in Vancouver.

“However, if you’ve got the person who might be the next prime minister and the person who is the premier of the province where the headquarters of the company you’re trying to acquire are, those are pretty formidable opponents to have a transaction,” McKoen said. “Very remarkable, not normal. This is not something you’d typically see in getting a transaction.”

Newmont’s (NYSE: NEM; TSX: NGT) $19.1 billion all-share acquisition of Newcrest at a 30.4% premium sought synergies and gave copper exposure to a gold company in tier one jurisdictions, John Wilkin, a partner at Blake, Cassels & Graydon in Toronto, said at the conference. They’re trends that may drive acquisitions over the next few years, Wilkin said.

“We’ve had the largest gold merger in history, but what was one of the most important factors to sell the premium: the company’s focused on copper,” he said. “Part of the strategy here is to create this tier one portfolio and selling off some of the assets.”

Newmont said in February it was selling some of its properties, though they have turned out to be ones it held before acquiring Newcrest. The company is pivoting away from Ontario and Quebec to focus on the Golden Triangle in northwest BC where Newcrest had the Red Chris and Brucejack mines and the Saddle North and Galore Creek copper-gold projects.

Brownfields

Redeveloping old sites is becoming more prevalent in M&A as rising metal prices and technology improve economics, but they bring concerns about liability, Carolyn McIntosh, senior partner at Cleveland-based law firm Squire Patton Boggs, told the panel.

“If you buy a previously mined area, you may be stuck with the responsibility for remediating it,” McIntosh said. “Understanding what that scope of potential liability may be is a critical part of your M&A.”

Miners in the US must be aware of the Comprehensive Environmental Response Compensation and Liability Act, the Clean Water Act and the Resource Conservation Recovery Act, she said. Not just governments, but non-governmental organizations and citizens can lodge complaints to seek enforcement.

“If your technology will recover metal then you’re going to be doing cleanup as you go along,” McIntosh said. “But all of those things should be taken into account to make sure that the investment is not underwater from the outset.”

 

Report: Singapore Port Congestion Mounts as Ships Divert from Red Sea

Linerlytica says port congestion at Singapore has reached a critical stage (file photo)

PUBLISHED MAY 28, 2024 3:51 PM BY THE MARITIME EXECUTIVE

 

 

Major carriers have repeatedly warned of the impact the Red Sea diversions are having on their services. In a report from Hong Kong-based market intelligence firm Linerlytica, they warn the diversions are causing the resurgence of port congestion while warning the situation is likely to get worse in the coming month.

Analysts have warned of the extra transit times as vessels are forced to divert around South Africa on their normal Asia to Europe runs. Now with the Houthi threatening further distance, including into the Indian Ocean, carriers have been warned to ensure that their vessels increase the diversions meaning even longer distances and greater travel times.

Linerlytica paints a picture of inter-related issues causing the latest congestion. According to their analysis, Southeast Asia is the worst bottleneck accounting for more than a quarter (26 percent) of congestion while North-Eastern Asia is close behind at 23 percent.

Singapore, however, they believe is the current epicenter of the backlogs. Linerlytica calculates that there are up to 450,000 TEU in the queue for shipping. They warn that vessels are now having to wait up to seven days for a berth at Singapore, versus normal conditions where at most a vessel had a half-day wait for a berth.

Contributing to the backlog is the dramatic increase in transit times for containers coming out of Asia. It has caused the shipping companies to push every available vessel into service and according to Linerlytica will force them to extend their charters. 

Another market intelligence firm, Sea-Intelligence recently reported that transit times on the most popular routes between Asia and Europe were all seeing increases in times but that the worst is to the Mediterranean ports, where in many cases carriers have been transshipping containers through intermedia ports since they are diverting away from the Suez Canal. According to Sea-intelligence, transit times during the first three months of 2024 increased on average by 39 percent on the most popular route pairings between Asia and the Mediterranean while it also only slightly less with a 15 percent increase for the most popular port pairings between Asia and Northern Europe. They report it is worst for the ports in the Eastern Mediterranean where the average minimum transit time increased by 61 to 63 percent, while to the Central Mediterranean average transit times are up by 39 to 40 percent.

The growing congestion at Singapore is also causing other effects says Linerlytica. Vessels are being forced to wait outside associated anchorages and further from port as in the case of Singapore. Carriers trying to manage the longer transit times and growing delays have also elected to skip less busy ports such as Port Klang, Malaysia meaning boxes are piling up or being rerouted to ports such as Singapore which is then strained by the increased volumes. The increase in congestion is also causing vessel bunching at points along the routes.

Globally, Linerlytica estimates that two million TEU of ship capacity, or seven percent of the global fleet, is now caught in congestion. 

As these pressures grow, it is also contributing to sudden increases in shipping costs. Several reports have warned that prices are returning to pandemic levels as a new wave of port congestion moves through segments of the market.

Singapore is Ready for Commercial Methanol Bunkering Operations

Methanol bunkering in Singapore while the X-Press Feeder vessel was also handling containers (X-Press Feeders)

PUBLISHED MAY 27, 2024 5:58 PM BY THE MARITIME EXECUTIVE

Singapore reports that it has completed its preparation and is now ready to offer full-scale commercial operations for the bunkering of methanol as a marine fuel. It joins other ports such as Antwerp and Rotterdam that are now locations for methanol bunkering and it can provide a model for the future adoption of ammonia as a marine fuel.

Two large methanol bunkering operations were completed in Singapore at the end of last week and again today, May 27, establishing the patterns and testing the processes developed by the Maritime and Port Authority of Singapore and government agencies. The port highlights that it began planning for the first methanol bunkering in July 2023 for the Laura Maersk containership including safety training and establishing an Emergency Operations Center. They also did plume modeling and reported they are now completing the technical reference for methanol bunkering.

Today’s bunkering of the ECO Maestro for X-Press Feeders also provided the opportunity to trial the use of the mass flow metering system for methanol and Singapore’s use of digital bunkering. Singapore has been the world’s largest bunker port for traditional fuels and is anxious to maintain its lead by developing alternative fuel options.

The new X-Press Feeders vessel was recently delivered in China as the first of 14 methanol dual-fuel vessels for the company. The ship, which is 13,900 dwt and 660 feet (201 meters) in length has a capacity for approximately 1,200 TEU. It stopped in Singapore before sailing for Cape Town as it heads to Rotterdam which along with Antwerp will be the homeports for X-Press Feeders’ new Northern Europe green routes. The vessel, which was the first of its kind built in China, uses a MAN 5S50 ME dual-fuel engine.

The bunker also marked the first time Singapore has been the location for methanol bunkering simultaneously with container operations. Close to 300 metric tonnes of bio-methanol were loaded from the bunker vessel Kara in a four-hour operation while the vessel was on dock at the Tuas terminal. According to port officials, after completing this operation the port is now ready for commercial methanol bunkering operations.

 

Proman's product tanker bunkered a methanol mix lass week in Singapore's anchorage after her naming ceremony (MPA)

 

Last week, on May 24, the port also saw the bunkering of 1,340 metric tons of a blended methanol mix of 20 percent green/80 percent conventional methanol for the Stena Prosperous (49,000 dwt) product tanker just delivered to Proman. It was a seven-hour operation also undertaken by the Kara in a ship-to-ship operation in the anchorage. Proman highlights the blend will result in a 31 percent tank-to-wake reduction in CO2 emissions.

The Laura Maersk loaded 300 metric tonnes of bio-methanol last summer in the first operation for Singapore conducted while the ship was in a secure part of the anchorage. After that, the port authority issued a tender for which it received 50 submissions from over 60 regional and international companies.

Singapore was also the location for the first two ammonia bunkering operations. Both were undertaken as part of the trials and certification of Fortescue’s pioneering vessel, a converted offshore supply ship that is the first to use ammonia.

Cyprus Terminates Larnaca Port Concession Over Development Dispute

Larnaca is the second largest port on Cyprus and plans called for a large redevelopment (Port of Larnaca)

PUBLISHED MAY 28, 2024 5:56 PM BY THE MARITIME EXECUTIVE

 

The Government of Cyprus in an ongoing dispute with the long-time leaseholder at the port of Larnaca announced it has terminated the concession and assumed direct management of the port. They immediately issued a statement reassuring that port operations would continue, including the use of the port as the staging area for the relief aid being shipped to the U.S.’s temporary pier in Gaza.

There are big development plans to expand the port and turn it into a major industrial and recreational facility. Larnaca was created in the early 1970s from a historic open anchorage and started commercial operations in 1973. Today, it is the second commercial port behind Lemesos and several smaller marinas and recreational ports on the island. 

Larnaca is a multi-use port that occupies an area of approximately 110 acres on the southern coast. It serves all kinds of cargo from bulk, (feed, grain, plaster) to conventional cargoes such as timber, iron, fertilizers, cars, pipes, as well as petroleum. It also has become a port for cruise ships and ferries.

Kition Ocean Holdings was the long-term lease holder of the port but it had been involved in a legal dispute with the government. The government accused the company of failing to renew a letter of guarantee for the planned reconstruction of the port while the company had been in court for the past few months to force the government to move forward on the agreement. They responded to the news that operations transferred to the Cyprus Port Authority as of midnight May 27 accusing the government of a breach of contract.

 

Redevelopment plan calls for expansion of the commercial port and a new marina (Port of Larnaca)

 

The government and Kition in 2022 agreed on a port redevelopment and marina project for Larnaca valued at approximately $1.2 billion. The plan called for the second largest port in Cyprus to be expanded with 10 piers, a state-of-the-art passenger building, and new environmentally friendly equipment. At the same time, the existing infrastructure of the port was to be upgraded including the piers, internal road network, and storage areas. 

The President of Cyprus Nikos Christodoulides said today that the expansion project would continue without delay while saying they would also be looking for a capable company to handle the development and operations. He confirmed that there have been discussions with the Emir of Qatar about strategic investments in Cyprus, including possibly the port. He also mentioned his recent meeting with the Chinese ambassador.

The Cyprus Port Authority is now overseeing gate operations, the port perimeter, and ship management. Government officials stressed that operations would continue as normal.

 

First LNG Tugboat with Hybrid System Goes Into Operation in Singapore

JMS Sunshine mtu gas engines

PUBLISHED MAY 29, 2024 12:45 PM BY THE MARITIME EXECUTIVE

 

[By: Rolls-Royce]

A new technological highlight has been in regular operation in the port of Singapore since mid-May 2024: JMS Sunshine, the world's first LNG tug powered by a hybrid system with mtu gas engines from Rolls-Royce. Seatrium Limited, a leading engineering solutions provider to the global offshore and marine industry is the designer, builder and operator of the new 29-metre, 65-tonne bollard pull tug. The Port of Singapore has committed to the Maritime R&D Roadmap 2030 with the aim of making it environmentally friendly and reducing energy consumption.

Rolls-Royce has supplied two 16-cylinder mtu Series 4000M55RN gas engines and the gas regulating unit (GRU) for the harbour tug. Chiam Toon Chong, Technical Superintendent, Seatrium Marine Services, acknowledged: “The handling of mtu engines is straight-forward, and user-friendly. Additionally, spare part availability and service support is excellent for the operation of tugs.”

"We are proud that we were able to contribute to Seatrium's innovative project with our gas engines. The workboat market is one of our strategic business areas. The mtu engines were selected because they meet the demanding requirements of harbour tug operations - in terms of reliability, ease of operation, dynamic engine behaviour and low emissions," said Chew Xiang Yu, Head of Rolls-Royce Power Systems' civil marine business in Asia.

The mtu gas engines are already well below the limit values of current emission guidelines (such as IMO III) without exhaust gas aftertreatment. The particulate mass is below the detection limit and they emit only small quantities of nitrogen oxides.

The hybrid system is particularly suitable for the load profile of the harbour tug: it enables very precise manoeuvring and a strong bollard pull when the full power is used. To achieve maximum thrust, the total power of the two azimuth stern thrusters is 4000 kilowatts. This is achieved by adding to the 1492 kilowatts each supplied by the mtu gas engines and 500 kilowatts of electric motor power on each shaft. The tug is equipped with a battery capacity of 904 kilowatt hours. The battery power is used to absorb peak loads, for example during acceleration, to manoeuvre purely electrically in port and to supply the ship on board with electricity.

11 ships worldwide sailing with mtu gas engines
Rolls-Royce's Power Systems division has already received orders for mtu gas engines as propulsion systems and on-board gensets for a total of eleven ships worldwide. These include ferries, tugs and government vessels. Two catamarans belonging to the Doeksen shipping company have been operating reliably with mtu gas engines on the North Sea in the Wadden Sea nature reserve since 2021. The Richmond ferry has been operating a commuter service on the Lake Constance drinking water reservoir in southern Germany since 2023. Operators and passengers are delighted: the engines are particularly quiet, produce no vibrations, no unpleasant odours and no black smoke.

The products and services herein described in this press release are not endorsed by The Maritime Executive.

USCG Aids Supply Ship Taking on Water in the Caribbean

PUBLISHED MAY 28, 2024 2:05 PM BY THE MARITIME EXECUTIVE

 

 

The U.S. Coast Guard assisted an offshore supply ship named Sea Falcon that reported it was taking on water while sailing in the Caribbean. When the call was received, the master declared an emergency reporting that the pumps on his vessel were not able to keep up with the ingress of water.

The Sea Falcon, built in 1980, is a 121-foot (37-meter) supply vessel that is operating in the Caribbean. When the vessel, which is registered in Vanuatu, called for assistance it reported that there were four people aboard. It was carrying two vehicles, construction materials, glass, and a container filled with dry goods.

The vessel was approximately 22 nautical miles south of Puerto Rico when the call for assistance was received late on Friday, May 24. The Sea Falcon was traveling to Tortola, British Virgin Islands when the captain reported they discovered a crack in the vessel’s hull. The estimated rate of flooding the USCG reports was approximately 300 gallons per minute.

While calling for vessels in the area to assist, the USCG also dispatched an MH-60T Jayhawk helicopter.

Reaching the vessel, the Coast Guard put a rescue swimmer aboard the Sea Falcon to assess the situation. The rescue swimmer confirmed approximately three inches of water in the engine room due to a three-inch crack in the vessel’s hull. 

To aid with the situation, the Coast Guard lowered an additional pump to the vessel from the helicopter. They assisted in getting the pumping operation and the rescue swimmer confirmed the water level had decreased to about two inches before leaving the vessel.

The rescue swimmer was recovered by the aircrew and the Coast Guard helicopter returned to Air Station Borinquen. The Sea Falcon with the aid was able to continue to Tortola. She tied up at approximately 11:48 a.m. Saturday in the British Virgin Islands.

Two Rescued After Luxury Yacht Sinks Off St. Augustine

Courtesy St. Johns County Fire Rescue

PUBLISHED MAY 27, 2024 11:37 PM BY THE MARITIME EXECUTIVE

On Saturday, local first responders rescued two people from a sinking luxury yacht off the coast of St. Augustine, Florida. 

Just after 1130 hours on Saturday morning, Sector Jacksonville received a call on Channel 16 from the yacht Atlantis, an 80-foot Sunseeker. The operator believed that they had struck something in the water, and the vessel was flooding.

Coast Guard Station Mayport launched a boat crew to the scene, and the local sheriff's office, the police department, county first responders and nearby good samaritans all converged on the vessel. Local police marine units arrived first, and they safely rescued the two people aboard the yacht. One individual sustained minor injuries and was taken to a hospital for treatment.

The submerged object was likely a dredge pipe piling, according to St. Johns County Fire Rescue. Photos released by the rescue agency show a large hole in the bow of the vessel at the waterline. 

All images courtesy St. Johns County Fire Rescue

Atlantis was a 1999-built Sunseeker Predator 80 with a top speed of 45 knots, according to Boat International. Local media assessed its value as approximately $1 million. 

As of Saturday, the vessel remained partially afloat, with just the bow visible. The Coast Guard has marked the hazard with buoys and issued a notice to mariners to warn of the potential risk to navigation. The vessel's owner is making salvage arrangements, according to the Coast Guard.