Mineral Resources cuts 570 jobs amid CEO’s tax evasion probe

Mineral Resources reported identifying around A$300m ($197.2m) in savings from capital expenditures (capex) and operational costs (opex) as part of its cost-cutting initiatives.

 Credit: Maksim Safaniuk/Shutterstock. ·

GlobalData
Fri, November 1, 2024 

Australia-based Mineral Resources has slashed 570 jobs and slowed down the underground construction at its Mt Marion lithium project in Western Australia, reported the Australian Financial Review (AFR).

This news comes as the company is embroiled in a tax evasion investigation involving offshore companies linked to its founder and CEO Chris Ellison.


The job cuts have been implemented over the past four months, a period marked by persistently low lithium prices.

The announcement of layoffs coincided with a A$1.1bn sale of gas assets to Gina Rinehart’s Hancock Prospecting and the closure of the Yilgarn iron ore mine.

In a recent update, Mineral Resources highlighted its cost-cutting measures, identifying approximately A$300m in capex and opex cost savings.

This includes A$180m from reduced capex for the 2024–25 period and A$120m in opex reductions, particularly within its lithium division.

The company informed employees of the impending changes, which will take place over the next four to six weeks.

Workers at the two lithium mines in Western Australia will face a choice between spending more time on-site or opting for redundancy. These measures are part of the company's strategy to decrease expenses as it deals with significant debt.

Despite the operational challenges, the company shares saw a 9.2% increase to A$39.40 each on Thursday in Sydney, bringing the company's valuation to A$7.7bn. The shares have fluctuated within a 52-week range of A$29.51–A$79.76.


AFR reported that the Mineral Resources’ board was aware of the probe and had initiated an investigation, yet chose not to disclose any information to shareholders.

In response to inquiries from the Australian Stock Exchange earlier this week, the company disclosed that it was informed of the allegations in June 2022 and had engaged a lawyer to investigate.

The board did not inform shareholders, believing the matter was not materially price-sensitive. Despite acknowledging Ellison's lapse in judgment, the board expressed continued trust in his leadership.

The tax evasion scheme reportedly involved Ellison selling equipment to Mineral Resources at inflated prices through a company registered in the British Virgin Islands. Profits were allegedly distributed among former chairman Peter Wade, Ellison and four other founding executives.

"Mineral Resources cuts 570 jobs amid CEO’s tax evasion probe" was originally created and published by Mining Technology, a GlobalData owned brand.

Mineral Resources says investigation of founder to finish by next week

Bloomberg News | October 27, 2024 

Wodgina joint venture project. Credit: Mineral Resources

Mineral Resources Ltd. said its investigation into undeclared payments made to companies linked to its tycoon founder, Chris Ellison, would be completed by next week.


Ellison, who is managing director and a major shareholder, said the payments pre-dated the company’s 2006 listing, and came from overseas entities he and his business partners operated, and which sold mining equipment and parts. He did not declare the income from the supply contracts.

“There has been considerable media coverage since Oct. 19 and the board’s investigation has evolved to respond to statements that do not accord with the company’s understanding of the facts,” Mineral Resources said in a corporate statement Monday.

The company’s shares slumped 26% last week after a report that Ellison had struck a deal with the Australian Taxation Office to repay owed money.

(By Paul-Alain Hunt)

Environmentalists sue over US approval of ioneer’s Nevada lithium mine

Reuters | October 31, 2024 |

Tiehm’s Buckwheat flower. (Credit: Flickr – Jim Morefield)

Environmental and Indigenous groups on Thursday filed a lawsuit challenging the US Interior Department’s approval of ioneer’s Rhyolite Ridge lithium mine in Nevada, the first domestic source of the battery metal to be permitted by Democratic President Joe Biden’s administration.


In a lawsuit filed in federal court in Las Vegas, groups including the Center for Biological Diversity argued the project posed an existential risk to the rare wildflower Tiehm’s buckwheat and could drive it to extinction.

They said the mine would also adversely impact groundwater, springs, wetlands, air quality, cultural resources and wildlife habitats, and would transform a remote part of rural Nevada into an industrial complex.

The groups said the Interior Department’s Bureau of Land Management (BLM) approved the mine without ensuring that it would not jeopardize the wildflower or unduly impact the environment in violation of the National Environmental Policy Act, the Federal Lands Policy and Management Act, and the Endangered Species Act.

The Interior Department declined to comment.

Australia-based ioneer said it does not expect the lawsuit to “meaningfully affect our proposed development timeline” and that it believes the project can be developed sustainably.

“We are confident that the BLM will prevail against this lawsuit,” said Chad Yeftich, ioneer’s vice president of corporate development and external affairs. “We intend to intervene and vigorously defend the BLM’s decision, which was based on its careful and thorough permitting process.”

The critical minerals miner received approval for the mine last week following a more-than six-year review process during which regulators, ioneer and conservationists tussled over the fate of Tiehm’s buckwheat.

The permit cleared the way for development of a mine that will become a key supplier to Ford Motor and other electric-vehicle manufacturers. It was issued amid a flurry of recent moves by Biden administration officials to support critical minerals production and offset China’s market dominance.

The permit also unlocked a $700 million loan from the US Department of Energy, as well as a $490 million equity investment from Sibanye Stillwater to fund the project.

The Interior Department said when it approved the mine that it had taken numerous steps to protect the ecosystem near the mine site, roughly 225 miles (362 km) north of Las Vegas.

The project contains enough lithium to power roughly 370,000 EVs each year. Construction is slated to begin next year, with production commencing by 2028.

(By Nate Raymond and Ernest Scheyder; Editing by Matthew Lewis)

US Energy Dept finalizes $2.26bn loan for Lithium Americas’ Nevada mine

Reuters | October 28, 2024 | 

Thacker Pass is projected to begin lithium production in the second half of 2026. (Image courtesy of Lithium Americas.)

The US Department of Energy finalized a $2.26 billion loan for Lithium Americas on Monday to build Nevada’s Thacker Pass lithium mine, one of Washington’s largest mining industry investments and part of a broader push to boost critical minerals production.


The loan, provisionally approved in March, is a key part of US President Joe Biden’s efforts to reduce dependence on lithium supplies from China, the world’s largest processor of the electric vehicle battery metal. Biden officials permitted a similar lithium project under development by ioneer last week.

The Thacker Pass project is slated to open later this decade and be a key supplier to General Motors, which earlier this month boosted its investment in the mine to nearly $1 billion.

“The Biden-Harris Administration recognizes mineral security is essential to winning the global clean energy race,” said Ali Zaidi, the White House national climate advisor.

Former President Donald Trump had permitted the mine just before leaving office. Initial construction at the site, just south of Nevada’s border with Oregon, started last year after the company won a long-running and complex court case brought by conservationists, ranchers and Indigenous communities.

With the loan now closed, Vancouver-based Lithium Americas plans to start major construction, a process that could take three years or longer. The mine’s first phase is expected to produce 40,000 metric tons of battery-quality lithium carbonate per year, enough for up to 800,000 EVs.

The project is expected to employ about 1,800 people during construction, and provide 360 full-time jobs once the mine is operational. The loan will have a 24-year term, with interest rates based on the US Treasury rate as each tranche is drawn.

“This essential loan helps us reduce dependence on foreign suppliers and secure America’s energy future,” said Lithium Americas CEO Jon Evans.

The mine’s cost had been increased from a previous estimate of $2.27 billion to nearly $2.93 billion due to higher engineering costs, an agreement to use union labor, and the company’s decision to build a housing facility for workers and their families in the remote region.

(By Ernest Scheyder; Editing by Richard Chang)

Koch inks first lithium deal backed by recovery-rate promise

Bloomberg News | October 28, 2024 |

Credit: Standard Lithium Ltd.

Koch Inc. signed a deal with a US lithium venture to provide technology that includes an industry-first guarantee of recovering at least 95% of the metal from salty water using its new extraction methods.


The company’s Koch Technology Solutions unit agreed to license its so-called direct lithium extraction process to a joint venture of Standard Lithium Ltd. and Equinor ASA for use in a planned commercial plant in southwest Arkansas, the firms said Monday in a statement.

The technology strips out lithium directly from brine in a process that promises to be cheaper, faster and cleaner than the traditional lithium extraction methods used in South America, a region with about half of the world’s reserves. Dozens of firms have been working on improved extraction methods collectively known as DLE, though they’ve yet to be proven at a commercial scale.

The Koch agreement includes a performance guarantee — promising a lithium recovery rate that is about double the rate from the common practice of relying on recovering the metal from evaporation ponds. This is the first time a technology provider has stated in a binding agreement that its process is going to work, backing it with a specific number for how much lithium can be recouped from salty wate

PNG

Rio Tinto halts Simandou after fatal accident

Staff Writer | October 28, 2024 |

Simandou’s mining concession is divided into four blocks. Rio Tinto hold rights to blocks 3 and 4 through a joint venture. (Image courtesy of Rio Tinto.)

Rio Tinto (ASX: RIO) has halted operations at its Simandou iron ore project in Guinea, after a contractor’s death.


The fatal incident occurred at the SimFer port site of the project on Saturday and the company said is collaborating with its partners and relevant authorities to conduct a comprehensive investigation.

Chief executive Jakob Stausholm extended his condolences to the family, friends, colleagues and communities affected by the tragedy.

This is Rio Tinto’s fifth fatality in 2024. Four employees died in January when a charter flight to the Diavik diamond mine in northern Canada crashed. Before this accident, Rio had five consecutive years without fatalities at its managed operations.

The world’s second largest miner obtained in July all necessary regulatory approvals to resume construction at its vast Simandou iron ore asset, the world’s biggest mining project.

The mine, which Rio is co-developing with a Chinese consortium, is set to be the world’s largest and highest grade new iron ore mine, adding around 5% to global seaborne supply when it comes on line.

First production from Simandou is scheduled for next year. The mine will contribute an annual supply of nearly 120 million tonnes of high-quality iron ore once it reaches full capacity.

Botswana’s new president aims to clinch De Beers diamond sales pact soon

Reuters | November 1, 2024 | 

De Beers sells its gems through 10 sales a year in Botswana’s capital, Gaborone (Image courtesy of De Beers Group)

Botswana’s new president, Duma Boko, said on Friday he wanted to conclude talks for a new sales pact with global diamonds giant De Beers as soon as possible.


De Beers, a unit of mining company Anglo American, last year agreed a new diamond sales pact, which would see the government’s share of diamonds from the Debswana joint venture gradually increase to 50% over the next decade. Debswana Diamond Company, equally owned by Botswana and De Beers, currently sells 75% of its output to De Beers.


Botswana in talks to raise stake in De Beers

Although the Botswana government and the country’s outgoing president, Mokgweetsi Masisi, touted the merits of the deal, it has yet to be signed.

Boko, who took office on Friday after an election that dealt a stinging defeat to Masisi’s party, said De Beers had been “considering walking away, not signing at all … (a) very dangerous position to be in as a country.”

“The relationship with De Beers could have been damaged by the way the negotiations were handled,” he said in a televised statement. “The first thing that needs to be done is to engage the other party.”

Boko added that his new administration wants to engage with De Beers to understand its concerns.

“A proper negotiation involves compromise, where you get a bit of what you wanted, the other person gets a bit,” he said. “Then … you have a durable, sustainable agreement.”

In an emailed comment, a De Beers spokesperson said: “We will continue to work with Botswana’s Government in support of shared objectives, as we always have.”

Anglo American is looking to divest De Beers as part of a broader restructuring of its sprawling business. Masisi had said in July the Botswana government may raise its shareholding in De Beers from its current 15%.

Anglo American’s process could become easier now that the election in Botswana has been concluded, diamond mining industry analyst Paul Zimnisky said.

“Diamonds by far represent the most important industry for Botswana, so this has to be one of the front and centre issues for the (new) president,” Zimnisky said. “I would expect to see progress on this front now.”

Like other luxury goods, diamond prices have been hammered by a slump in global demand. Sales of rough diamonds at Debswana fell about 52% in the first nine months of 2024, according to data released by Botswana’s central bank on Tuesday.

(By Brian Benza, Felix Njini and Clara Denina; Editing by Mark Potter, Ros Russell and Frances Kerry)

Read More: Botswana voters kick out ruling party of nearly six decades

Ecuador to reopen mining register for first time in over six years

Staff Writer | November 1, 2024 |

Ecuador’s President Daniel Noboa. (Image courtesy of Presidencia de la República del Ecuador | Flickr.)

Ecuador’s mining sector is following closely President Daniel Noboa’s recent decision to reopen and update the country’s mining cadaster within six months.


The executive decree, signed last week, mandates the inclusion in the country’s official registry of all records on mining rights, licenses, exploration and exploitation permits, as well as other related authorizations — whether granted, revoked, or cancelled.

Noboa’s initiative seeks to combat illegal gold mining, a persistent issue in the Andean country. It is also expected to streamline current processes as ministries must meet the new six-month deadline.

It also provides some authorities, notably the ministries of environment, energy and mines, the authority to identify illegal mining resource activities throughout the national territory. It gives them the power to enrol the national police and armed forces if necessary.

The decree defines as illegal any activity carried out by natural or legal persons, national or foreign, without titles, authorizations, permits or licenses.

The last time Ecuador updated its mining cadaster was in 2018.

Illegal mining has spread across 19 of the country’s 24 provinces, with hotspots in Esmeraldas, Imbabura, and Azuay. Protected areas are also impacted.

Recent reports by international organizations, including the US Department against Transnational Organized Crime (DTOC), have unveiled corruption and irregularities in Ecuador’s mining sector. One particular journalistic investigation by Mongabay, revealed that 652 mining concessions had been issued without companies following established procedures. It also shows a surge in unauthorized gold processing plants and violence.

Ilegal miners burn equipment as Ecuador’s Armed Forces bust the operation. (Image courtesy of: Ecuador Community North.)

“Criminal organizations are reinvesting drug trafficking profits into this lucrative [illegal gold] trade, fuelling a violent struggle for territorial control,” Sofía Jarrín said in a report on gold gangs published in September.

“This dynamic not only escalates violence, extortion, recruitment, and contract killings but also enables the expansion of other illicit markets, such as the smuggling of mercury, weapons and drugs, further empowering the criminal groups guarding the mining enclaves,” Jarrín, who is one of the report’s authors, wrote.

With elections approaching in February 2025, Noboa hopes to position Ecuador as a safer and more regulated mining jurisdiction.

The 36-year-old son of Ecuador’s richest man was elected in 2023 to serve a shortened 18-month term after his predecessor, Guillermo Lasso, called early elections to escape impeachment.

 

ECOCIDE

Singapore Oil Spill During Bunker Operation for Bulker

Overflow happened while the bulker Ines Corrado was fueling in a Singapore Anchorage (MPA)

Published Oct 29, 2024 12:30 PM by The Maritime Executive

 

 

The Maritime and Port Authority of Singapore is reporting an oil spill during a bunkering operation in one of its anchorages that was quickly controlled.  They believe that the oil has been dispersed but as a precaution, a vessel with a boom was deployed into the Changi region in case oil was spotted.

The bulker Ines Corrado was laying over in Singapore and bunkered while in the anchorage. The 81,272 dwt bulker registered in the Bahamans and operated by Gestin Maritime is bound for China. 

The bunkering operation was underway with an unnamed licensed vessel when the spill was reported at 5:40 p.m. local time on Monday, October 28. The response team arrived in about 10 minutes and began spraying dispersants. Estimates are that five tons of oil overflowed during the bunkering operation.

 

Video courtesy of MPA and prepared by TT Salvage Asia Pte Ltd

 

A survey of the area this morning showed no visible oil in the area. The MPA will investigate the incident.

It was the third recent oil spill in one of the world’s busiest bunker ports but smaller than the other recent reports. Nine days ago, Shell reported a leak from one of its land-based pipelines. About 30 to 40 tonnes of Slop (mix of oil and water) leaked. Multiple Singapore agencies were involved in the clean-up operation.

The port had a more serve incident in June when the dredger Vox Maxima blacked out and hit the bunker vessel Marine Honour. About 400 tonnes of fuel were released from the bunker vessel which sustained significant damage.

Mexican Shipmanager Fined $1.75M for Oily Bilge Water Dumping

Published Oct 30, 2024 7:54 PM by The Maritime Executive

 

The U.S. Department of Justice has fined a Mexican ship manager nearly two million dollars for MARPOL violations. It is the latest in a long series of hefty penalties for operators whose crews save on disposal costs by pumping oily bilge waste over the side. 

On August 25, 2023, U.S. Coast Guard inspectors met the bulker Suhar at the port of Pensacola. Suhar was hauling cement under the management of Gremex Shipping S.A., which had operated the ship since 2021. 

On boarding, the Coast Guard found evidence that the crew had discharged untreated bilge water into the sea, bypassing their oily water separator, then falsifying the oil record book. Specifically, the Coast Guard alleged that "the ORB failed to include entries of all discharges of oily bilge water from the vessel." Illegal untreated discharges are typically used to avoid the cost of shoreside disposal of oily waste, saving the operator money and improving the bottom line; these violations are grounds for a detention or administrative proceeding in most jurisdictions, but are prosecuted as a criminal offense in the United States.   

Gremex waived its right to a grand jury indictment, and it pleaded guilty on Wednesday to one count of failing to maintain an accurate oil record book. The firm agreed to a fine of $1.75 million, payable over three years. It will also pay for an environmental compliance plan to cover one vessel, the Grit Cement IV. 

No individual crewmembers or executives were charged under the plea agreement. 

 

President Biden Unveils EPA’s $3 Billion Investment in Clean Ports

President Joe Biden announced the major infrastructure investment in clean ports (Port of Baltimore)

Published Oct 29, 2024 4:14 PM by The Maritime Executive

 

 

President Joe Biden traveled to the Port of Baltimore today, October 29, to announce that the EPA has selected 55 applications from across 27 states and territories for an investment of nearly $3 billion under the Clean Ports Program. The program which is part of the administration’s broader infrastructure investments will support a wide range of projects for infrastructure, climate and air quality planning at U.S. ports that will include deploying zero-emission equipment and a conversion to shore power.

“Our nation’s ports are critical to creating opportunity here in America, offering good-paying jobs, moving goods, and powering our economy,” said EPA Administrator Michael S. Regan releasing the details of the awards. “Today’s historic $3 billion investment builds on President Biden’s vision of growing our economy while ensuring America leads in globally competitive solutions of the future.”

The EPA highlights that port and freight equipment responsible for moving goods including trucks, locomotives, marine vessels, and cargo-handling equipment contribute to significant levels of diesel air pollution at and near port facilities. Regan said the funds announced today will improve air quality at ports across the country by installing clean, zero-emission freight and ferry technologies along with associated infrastructure, eliminating more than 3 million metric tons of carbon pollution, equivalent to 391,220 homes' energy use for one year.

Among the ports that are designated to receive significant financial support is the Port Authority of New York and New Jersey ($344 million), Port of Oakland, California ($322 million), Maryland Port Administration ($147 million), Georgia Ports Authority ($49 million), Philadelphia Regional Port Authority ($77.7 million), Northwest Seaport Alliance in Washington State ($3 million), Puerto Rico Ports Authority ($1.8 million) and Port of Houston Authority ($3 million). The program also includes inland ports with the Port of Detroit, Michigan ($21.9 million). 

In February 2024, EPA announced two separate funding opportunities for U.S. ports – a Zero-Emission Technology Deployment Competition to directly fund zero-emission equipment and infrastructure to reduce mobile source emissions and a Climate and Air Quality Planning Competition to fund climate and air quality planning activities. The competitions closed in May 2024 with over $8 billion in requests from applicants across the country seeking to advance next-generation, clean technologies at U.S. ports.

After a thorough and rigorous grant application review process, EPA reports it selected 55 applications to receive these investments. The projects focus on a wide range of equipment at and around ports, with funds supporting the purchase of zero-emission equipment, including over 1,500 units of cargo handling equipment, 1,000 drayage trucks, 10 locomotives, and 20 vessels, as well as shore power systems, battery-electric and hydrogen vehicle charging and fueling infrastructure, and solar power generation.

Among the specific projects, New York and New Jersey will deploy electric cargo handling equipment and drayage trucks with supporting infrastructure, PANYNJ plans to scrap a port of its existing fleet of equipment and will use a portion of the funding for the installation of shore power. Georgia will upgrade the ports of Savannah and Brunswick with shore power systems while Philadelphia will focus on deploying zero-emission port equipment. Oakland plans to deploy electric and hydrogen cargo handling equipment, drayage trucks, charging infrastructure, and a battery energy system. 

Funding for these projects is included in the Inflation Reduction Act passed by Congress in 2022. A full list and details of the programs receiving the grants were posted online by the EPA.

 

U.S. Blacklists UAE-Based Shipowners for Serving Russia's Arctic LNG 2

One of three giant equipment plant barges for the Arctic LNG 2 project (Novatek)

Published Oct 31, 2024 6:05 PM by The Maritime Executive

 

The U.S. Treasury's Office of Foreign Asset Control has imposed new sanctions on service providers for Novatek's Arctic LNG 2 gas export terminal. This facility has been blacklisted as part of a calibrated effort to constrain Russian energy exports, allowing enough outflow to maintain global price stability while using tailored sanctions to impose limits at the margins. 

The newly-listed firms include Smart Solutions Ltd., a provider of components for the Arctic LNG 2 plant's gravity-based structures - the monolithic concrete bases that Novatek assembled in Murmansk and floated out to the construction site in the Gulf of Ob. Smart Solutions allegedly chartered the Audax and Pugnax, two module carrier vessels that the U.S. has already blacklisted. 

Treasury also sanctioned a Novatek subsidiary in the UAE that the U.S. has linked to Arctic LNG 2's sanctioned operations. According to the Treasury, Novatek's New Transshipment FZE allegedly owns four shadowy LNG carriers that were bought to pick up Arctic LNG 2's banned cargoes. 

The newly-listed UAE firms include New Transshipment and four majority-owned holding companies, LNG Alpha, Beta, Gamma and Delta Shipping. These firms own the LNG carriers North Air, North Mountain, North Way and North Sky, respectively. 

Three sanctioned ships that picked up the first shipments from Arctic LNG 2 have stalled off Russia's Pacific Coast, unable to offload their sanctioned cargoes, according to open source intelligence analysts. Given the severe challenges with finding export routes, Bloomberg reports that Arctic LNG 2 has been forced to shut down production, just months after it started. 

The Yamal LNG plant, located on the opposite side of the Gulf of Ob from Arctic LNG 2, is run by the same operator but is not sanctioned. It continues to export Russian LNG to European buyers at a rate of about 20 million tonnes per year, the same amount as Arctic LNG 2's nameplate capacity. 

 

Nine More Ex-Cadets File Claims Over Sexual Assault at USCG Academy

Published Oct 31, 2024 10:12 PM by The Maritime Executive

 

 

Nine more former cadets from the U.S. Coast Guard Academy have filed federal claims against the service for its failure to address a long-running pattern of sexual assault and harassment, as detailed by the service's own Operation Fouled Anchor report. The additional claimants bring the total to 22, all represented by Christine Dunn, a managing partner at Sanford Heisler Sharp McKnight's D.C. office. Dunn previously won a settlement for U.S. Merchant Marine Academy cadet Hope Hicks ("Midshipman X") in a high-profile sexual-violence claim against Maersk Line Ltd. in 2022. 

The claimants have filed Federal Tort Claims Act administrative cases against the Coast Guard, alleging that the service failed to take action to prevent a foreseeable risk of sexual assault on campus at USCGA for decades. A comprehensive review by the Coast Guard Investigative Service found that sexual offenders from the corps of cadets were rarely referred for criminal prosecution, and many were allowed to remain in the service. The Coast Guard's previous leadership received a detailed CGIS report in 2018 and made an informed decision not to share the findings with Congress or the public - leading to an uproar when congressional oversight committees learned about the report from CNN.

The 22 survivors claim that their experiences at the academy could have been prevented, but that "the academy's leaders engaged in routine refusal to prevent or otherwise mitigate the danger posed to cadets by sexual predators, actively facilitating a dangerous environment." This included the academy's longtime policy of disallowing personal door locks in dorm rooms (recently reversed). 

To prevail in an FTCA case, the former cadets will need to clear two hurdles: first, they will need to show that their injuries did not occur in the course of military service; and second, that the two-year statute of limitations for FTCA claims has not expired. Since the survivors' cases date back more than two years, the claimants assert that they only became aware of the Coast Guard's administrative failings when Operation Fouled Anchor came to light in 2023. As the report was revealed less than two years ago, this would be within the time limit for filing a claim. 

"There's legal challenges here," Dunn told Law.com, acknowledging that it might not be an easy case. "I am not naive to that fact, and I think the strongest place legally to start is the academy because of 'Operation Fouled Anchor.' I am hopeful that this can expand and include enlisted Coast Guard as well."

 

U.S. Navy Plans to Extend Service of its Oldest Destroyers Into the 2030s

USS Cole's service life will be extended by five years (USN file image)

Published Oct 31, 2024 11:15 PM by The Maritime Executive

 

 

The U.S. Navy has announced plans to briefly extend the service lives of 12 of its oldest Arleigh Burke-class destroyers. The decision means that almost all of the Flight I Arleigh Burkes will stay in service for an extra one to five years, adding nearly 50 ship-years and nearly 1,100 vertical launch cells of missile capacity for naval planners into the mid-2030s. 

“Today’s budget constrained environment requires the Navy to make prioritized investments to keep more ready players on the field,” Chief of Naval Operations Adm. Lisa Franchetti said. “The Navy is actively pulling the right levers to maintain and grow its battle force inventory to support the United States’ global interests in peace and to win decisively in conflict.”

In a statement, the service said that the decision was based on the material condition of each ship and the practicality of making repairs and upgrades. All of the covered vessels would be expected to age out of service in 2028-32.

The duration of planned life extension for each vessel varies from one year (USS Stethem and Carney) to three years (USS Barry and USS The Sullivans) to five (USS John Paul Jones, Curtis Wilbur, Stout, John S. McCain, Laboon, Paul Hamilton, Gonzalez and Cole). The service previously announced life extensions for USS Arleigh Burke, Mitscher, Milius, Ramage and Benfold. 

Notably missing from the life extension list are USS Russell and USS Fitzgerald, the only ships between DDG 51-69 that have not been named. The two newest Flight I hulls, USS Hopper and USS Ross, are also absent. 

The Flight I Arleigh Burkes date back to the 1990s, and they went through a midlife modernization refit beginning in 2010. During the newly-announced life extension, some might be candidates for additional bolt-on upgrades, like the canister-launched Naval Strike Missile.

The retention of the Flight I Arleigh Burkes will help to plug a much-discussed missile gap. Workforce, shipyard and design office delays have pushed the first Constellation-class frigate back by three years. Meanwhile, the long-serving Ticonderoga-class cruisers - which can carry up to 120 missiles each - are in deteriorating condition and will soon retire. The longest-serving Ticonderogas are nearly 40 years old, and the last few are scheduled to decommission by 2027.  

“Extending these highly-capable, well-maintained destroyers will further bolster our numbers as new construction warships join the Fleet,” Secretary of the Navy Del Toro said in a statement today. “It also speaks to their enduring role in projecting power globally, and most recently in the Red Sea, their proven ability to defend themselves, as well as our allies, partners and friends from missile and drone attacks.”