Congo’s Gecamines offers $1 million to block Chinese deal with Chemaf

Reuters | November 22, 2024 | 

(Image courtesy of Chemaf)

The Democratic Republic of Congo’s state miner Gecamines is offering $1 million to buy cobalt and copper assets of indebted mining firm Chemaf to prevent China from increasing its control of critical metals in the country, two sources familiar with the details told Reuters.


Chemaf, a partner of commodities trader Trafigura, agreed to sell its copper and cobalt assets to Chinese defence and industrial giant, China North Industries Corp, or Norinco, in June.

Gecamines, which owns the lease to Chemaf’s mines, whose copper and cobalt are used in electric vehicles and clean energy infrastructure, was asked by Chemaf to approve the sale, but declined.

Gecamines later submitted an unsolicited bid for the Chemaf assets, deepening a standoff that has been complicated by US officials lobbying against China’s grip on the mineral-rich central African Copperbelt.

Chinese companies are major investors in Congo’s mining sector. CMOC Group is now the world’s biggest cobalt miner as it boosts output at Tenke Fungurume mine it bought from US-based Freeport-McMoRan just four years ago.


Gecamines offered to pay just under $1 million for the mines and processing plant, and wants to conduct an audit of Chemaf’s debts before structuring a payment plan to settle the borrowing, said the sources, who cannot be named because of the sensitivity of the matter.

Chemaf, whose debts have ballooned to $900 million to $1 billion, needs an additional $300 million to expand output and operate profitably, the sources said.

Norinco has offered between $900 million and $1 billion, including settling Chemaf’s debts and outstanding taxes, one of the sources said.

The Chinese miner also pledged to advance Chemaf’s plans to raise copper and cobalt output to about 75,000 metric tons and 25,000 tons, respectively, the source added.

Chemaf, which has been operating for the past 20 years, said on its website it has invested more than $610 million developing the second phase of Etoile and Mutoshi mines.

“I can confirm we made a better offer than Norinco did, subject to us conducting due diligence of the debt,” Gecamines chairman Robert Lukama told Reuters.

“And more importantly the government declined, and already informed Chemaf by letter that they will not accept the Norinco transaction and we also confirm that we will not give another chance to anyone else other than ourselves,” Lukama added.

Norinco’s move has drawn scrutiny by the US, with State Department officials lobbying Congo to block the deal, three sources told Reuters. The US wants Congo to find an alternative to Norinco, one of the three sources said.
Cash crunch deepens

The stalled deal has worsened Chemaf’s finances and if it fails completely, the Congolese miner’s key backers, including Trafigura, may either lend more or risk a prolonged period of uncertainty recovering their investments, the sources said.

“The lenders and creditors of Chemaf have faced significant financial hardship for more than 12 months as a result of money owing to them not being paid in accordance with the terms of loans, credit provided and invoices submitted for payment,” one of the sources said.

Chemaf is only processing stockpiles from its Etoile mine as expansion work at Mutoshi mine was halted when financing dried up, the sources said. The company is struggling to pay the salaries of its 3,500 workers, its power bills and security guards manning the sites, the sources said.

Chemaf declined to comment.

Chemaf entered into a 24-month creditors’ protection agreement in August 2023 that lapses next year. While the miner could also seek interim financing, its lenders want to see the Norinco deal concluded as soon as possible, one of the sources added.

Trafigura, one of the main creditors, declined to comment.

US officials are also rallying Western companies to consider buying the Chemaf assets, the sources said.

Norinco, which was sanctioned by the US since 2021, did not immediately respond to emailed queries. In Congo, it owns the Comika and Lamikal copper and cobalt mines in partnership with Gecamines.

(By Felix Njini, Pratima Desai, Julian Luk and Ernest Scheyder; Editing by Veronica Brown and Louise Heavens)

US bars more food, metal imports over China’s alleged forced labor

Reuters | November 22, 2024 | 

Uyghur people travel along birch tree lined roads to the weekly market at Yopurga near Kashgar in Xinjiang Uygur Autonomous Region of China. (Stock Image)

Washington – The United States banned food, metals and other imports from about 30 more Chinese companies over alleged forced labor involving the Uyghurs, according to a government notice posted online on Friday.


The new restrictions, covering a range of products from tomato paste and walnuts to gold and iron ore, are part of the federal government’s effort to prevent goods made with forced labor from entering the United States, the Federal Register posting said.

The companies were added to the Uyghur Forced Labor Prevention Act Entity List, which restricts the import of goods tied to what the US describes as China’s human rights abuses and ongoing genocide in the Xinjiang Uyghur Autonomous Region.

US authorities say Chinese authorities have established internment camps for Uyghurs and other religious and ethnic minority groups in China’s western Xinjiang region. Beijing has denied any abuses.

The latest additions bring the total number of companies on the list to more than 100 since the Uyghur Forced Labor Prevention Act was signed into law in December 2021.

Twenty-three of the newly added companies are in the agricultural sector. Others mine, smelt and process metallic materials including copper, lithium, beryllium, nickel, manganese and gold.

“Today’s enforcement actions make it clear — the United States will not tolerate forced labor in the goods entering our markets,” Robert Silvers, U.S. Homeland Security under secretary for policy, said in a statement. “We urge companies to take responsibility, know their supply chains, and act ethically.”

(Reporting by Karen Freifeld; editing by Susan Heavey, Chizu Nomiyama and Jonathan Oatis)

South Africa police standoff with illegal gold miners escalates

Bloomberg News | November 18, 2024 | 

The police sealed off access to the Buffelsfontein gold mine in Stilfontein several weeks ago. Image: Video screenshot via KayaNews

The South African police intensified efforts to force hundreds of illegal gold miners holed up in underground shafts to the surface so they can be arrested.


The police sealed off access to the Buffelsfontein gold mine in Stilfontein, about 156 kilometers (97 miles) southwest of Johannesburg, several weeks ago to deny the miners access to food and other essentials. While more than 1,000 of the miners have surfaced and been detained, many more are still thought to be below ground and there are mounting fears their lives may be at risk.




South African President Cyril Ramaphosa said that while sealing off supplies to the miners “has generated a great deal of public debate” and is “potentially volatile,” he mostly took a hard line against them because they were operating illegally and posed a risk to the economy, nearby communities and personal safety.

“The Stilfontein mine is a crime scene where the offense of illegal mining is being committed,” he said in a statement. “It is standard police practice everywhere to secure a crime scene and to block off escape routes that enable criminals to evade arrest.”

The problem of illegal mining isn’t unique to Stilfontein — there are about 6,000 abandoned mines strewn across the country and a number of them have been accessed by informal miners known locally as zama zamas. South Africa and its mining industry lose about 70 billion rand ($3.9 billion) a year to those who mine gold illegally, according to the government.

Minerals Council South Africa, which represents the nation’s biggest mining companies, declined to comment, deferring to the police and government. The lobby group has said that illegal mining is inter-related with organized crime and that operators have links to global criminal syndicates.

(By Paul Burkhardt)

Mali frees Resolute executives after $160 million deal

Bloomberg News | November 20, 2024 | 

Resolute’s Syama gold mine in Mali. Credit: Resolute Mining

Resolute Mining Ltd. said chief executive officer Terry Holohan and two other employees have been released from detention in Mali, just days after the gold mining company agreed to pay about $160 million to resolve a tax dispute with the government.


The three have now departed the country after being released from the capital, Bamako, where they had been held, the Perth, Australia-based company said in a statement. Holohan and his colleagues were detained more than a week ago after he traveled to the country for meetings with tax and mining authorities.

Their release comes after the company said on Monday it paid an initial settlement of $80 million to the African nation, with an agreement to pay the balance in the coming months from “existing liquidity sources.” The detentions had come as the military rulers of Africa’s third-largest gold producer ratchet up pressure on mining companies to renegotiate contract terms.

The company’s shares closed 5.8% lower in Sydney on Thursday, before it confirmed the release, which was reported earlier by Agence France-Presse.

Mali’s position was that Resolute – which operates the Syama gold mine – should pay the state 100 billion CFA francs ($161 million) to settle a dispute mainly concerning alleged back taxes following a sector-wide audit, people familiar with the matter said last week.

Mali has been under military rule since 2020, when interim leader Colonel Assimi Goita ousted the West African nation’s elected president, citing the previous regime’s failure to repel the Islamist insurgents. Since then, mercenaries from the Kremlin-backed Wagner Group have been deployed to the country, while European forces and a United Nations peacekeeping mission were forced to withdraw.

(By Sybilla Gross)

Mali junta sacks Prime Minister Maiga and his government

KRIMINAL KAPITALI$M

Australian pension group rejects Mineral Resources pay proposal

Bloomberg News | November 20, 2024 | 

Mt Marion lithium operation. Credit: Mineral Resources

A group representing Australia’s A$3.9 trillion ($2.5 trillion) pension industry has recommended its members vote against the remuneration plan of scandal-hit Mineral Resources Ltd. at the company’s annual general meeting on Thursday.


The Australian Council of Superannuation Investors wants to clarify what directors knew about Mineral Resources’ investment in industrial property that was part-owned by managing director Chris Ellison. The Perth-based miner bought 49% of a company linked to Ellison that owned the property, the Australian Financial Review reported last week, the latest in a series of scandals that has seen the company lose more than half its value from a peak in May.

“Investors want to know who signed off on that transaction,” ASCI’s executive manager of stewardship Ed John said in an emailed statement. “The board must respond on this issue before the AGM.”

Ellison has been under scrutiny after the company that he founded launched an internal inquiry into what the board described as “profoundly disappointing” conduct. Separate investigations were launched by the Australian Securities and Investments Commission, the corporate watchdog, as well as the Australian Securities Exchange.

One of Australia’s largest pension funds, A$88 billion HESTA, has put the company on its watch list, which means it is subject to closer monitoring, and has been engaging directly with it regarding its recent governance failures, chief executive officer Debby Blakey said earlier this month.

(By Amy Bainbridge)

Beleaguered Ellison faces MinRes shareholders

Kristie Batten | November 21, 2024 

Chris Ellison. (Image courtesy of Macquarie Australia | MinRes.)

Chris Ellison, founder and CEO of the embattled mining and contractor Mineral Resources (ASX: MIN), broke his silence Thursday following a governance scandal that erupted last month.


Earlier this month, MinRes announced that Ellison would step down within 12–18 months. This decision followed an investigation that uncovered tax evasion and other misconduct, including allegations that he used company resources for personal gain and leased properties to the company in which he had a financial interest.

The company’s annual general meeting (AGM) in Perth on Thursday drew significant anticipation. Television crews and photographers gathered outside the venue hours before its scheduled start, aiming to capture Ellison’s arrival.

More than 300 people attended the meeting, with some relegated to an overflow area outside the main room.

Following an address by MinRes chairman James McClements—who is also set to leave the company—Ellison spoke for about four minutes, addressing the scandal.

He admitted to an “error of judgment” in relation to tax evasion and assured shareholders that all personal expenses had always been reimbursed promptly.

“I deeply regret the impact this has had on the business and our people,” Ellison said.
“I can’t stress enough how much I hate what I’ve done, and there’s a dark cloud in my life that I’ll live with forever.”

Ellison highlighted his 32-year tenure with MinRes, during which he had focused on building a successful Australian company.

“My focus has been on building a great Australian company, and I’m proud of the value we’ve created,” he said.

Ellison followed his apology with a 30-minute presentation detailing the company’s operations, which include iron ore and lithium mines, as well as its status as the world’s largest crushing contractor.

He emphasized future growth opportunities and MinRes’ contributions to the Western Australian resources sector, including its covid-19 testing efforts, initiatives to boost female and Indigenous employment, and a strong track record of shareholder returns.
Tension builds

When the meeting turned to formal business, the atmosphere grew tense.

Before shareholder questions began, McClements urged attendees to remain respectful during a time of “heightened emotions.”

Over the next hour, more than 40 questions were posed, primarily focusing on the timing and disclosure of the governance issues. Topics like the company’s growth outlook and balance sheet took a backseat.

MinRes had previously admitted it was aware of some of the issues as early as 2022 but considered them immaterial to the company’s share price at the time.

Several shareholders expressed frustration that allegations first surfaced in the media instead of being disclosed by the company.

“Investigations have evolved over time to address allegations in the media and from other sources,” McClements said.

“We’ve had processes in place to disclose material information as it emerged. However, recent media reports didn’t necessarily align with our understanding of these matters.”

Despite many questions being directed at Ellison, McClements fielded all inquiries, often referring shareholders back to the company’s November 4 statement.

Ellison declined to speak to the media after the AGM, a departure from his usual practice.
Unexpected support

The company’s remuneration report received only 25.4% shareholder support, resulting in a first “strike.” A second strike at next year’s AGM could trigger a board spill resolution.

However, it became evident that many shareholders opposed Ellison’s impending departure.

Numerous attendees voiced their support for Ellison, receiving enthusiastic applause.

Long-time shareholder David Bowden lauded MinRes’ “impeccable financial performance” since its 2006 listing and criticized the “trial by media” that he said led to Ellison’s downfall.

Shareholder Jan Ford described Ellison as an inspiration, arguing he was the right person to lead the company.

Even prominent activist shareholder Stephen Mayne praised Ellison for retaining his significant stake in MinRes. Ellison remains the company’s largest shareholder, holding over 11% of the company—valued at nearly A$800 million ($521m).

Australian Shareholders Association representative John Campbell. (Image by Kristie Batten)

McClements acknowledged the diverse views among shareholders.

“We’ve engaged extensively with shareholders over the past four weeks,” he said.
“There’s clearly a diversity of opinions, and we’ve had to make a very difficult decision under complex circumstances.”

McClements confirmed that an immediate departure for Ellison was deemed not in the best interests of the company or its shareholders.
Looking forward

Following the 2.5-hour meeting, Australian Shareholders Association representative John Campbell commented on the mixed reactions:

“I think Western Australians tend to be forgiving of situations that may not necessarily serve their best interests,” he said.

MinRes announced plans to engage Elizabeth Broderick, Australia’s former sex discrimination commissioner who led the review into Rio Tinto’s workplace culture, to conduct a confidential culture assessment.

McClements said the company was also reviewing transactions involving key management personnel and related parties. Steps would be taken to exit or unwind arrangements that no longer provided a compelling commercial benefit to the company.

KAPITAL STRIKE

Mexico’s proposed higher mining royalties could block nearly $7bn in investments

Reuters | November 21, 2024 |

Newmont’s Peñasquito mine in Mexico, one of the biggest silver mines in the world. (Image: Newmont Goldcorp via Flickr)

A proposed increase in mining royalties in Mexico could block more than $6.9 billion in investments over the next two years, the industry’s local chamber said on Thursday.


As part of its budget proposal published last week, the Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.

The government plans to bump up two separate royalties from 7.5% to 8.5% and 0.5% to 1.0%, respectively.

“The measure… would have an impact on a sector that has already seen its contributions and investments reduced due to paralyzation (of the sector),” the chamber said in a statement responding to questions sent by Reuters.

The proposed hike comes after Congress last year shortened concessions from 50 years to 30 years and tightened water-extraction permits. Another reform aimed at banning open-pit mining remains in the legislature.

The royalty increase, “coupled with the lack of permits and exploration restrictions in recent years, could inhibit more than $6.9 billion that the mining sector could invest in new projects in the next two years,” the chamber told Reuters.

Mexico is the world’s leading silver producer and a top producer of copper and gold. The industry contributes around 2.5% to the nation’s gross domestic product (GDP).

But an additional tax burden could make Mexico less attractive compared to other major producers such as Chile, Peru and Canada, the chamber said.

The group represents some of the nation’s largest miners, such as Grupo Mexico, Minera Autlan, Industrias Penoles and Newmont’s Penasquito mine.

(By Noe Torres and Kylie Madry; Editing by Sarah Morland)

Panama’s President blames previous gov’t for First Quantum mine crisis

Staff Writer | November 22, 2024 | 

Panama’s President José Raúl Mulino. (Image: Mulino’s X account.)

Panama’s President José Raúl Mulino has strongly condemned the previous government for its mismanagement of the crisis surrounding First Quantum Minerals’ (TSX: FM) $6.5 billion Cobre Panama copper mine.


The operation, First Quantum’s flagship mine, was shut down a year ago following a Supreme Court ruling that declared its concession contract unconstitutional.

Mulino attributed the closure to widespread public dissatisfaction with former President Laurentino Cortizo’s administration.

“The mine paid the price for accumulated national discontent, under a government with only 25% popularity and overwhelming public rejection,” stated Mulino, who took office in July, according to BNamericas. “They couldn’t manage such a critical issue, let alone in the manner they attempted.”

The decision to invalidate the mine’s permit followed mounting protests. Critics accused the Cortizo government of failing to address long standing legal and environmental concerns tied to the project, which accounted for nearly 5% of Panama’s GDP.

Mulino, now tasked with resolving the fallout, has vowed to take a more transparent approach, promising a comprehensive audit of the mine involving international experts. “This is a government with credibility and national acceptance,” Mulino said, highlighting his administration’s intention to begin addressing the mine’s future in early 2025.

Mulino has said the Cobre Panama project will be addressed as needed, but stressed that issues such as social security have higher priority. A clear timeline for this process, however, has yet to emerge.

Financial shock

As operations at Cobre Panama remain suspended, the mine has transitioned into a preservation phase, incurring significant monthly costs. First Quantum reported spending between $11 million and $13 million per month on labour, maintenance, and environmental stability measures. By the end of October, nearly 121,000 tonnes of copper concentrate remained on-site, as First Quantum continued negotiating a permit to export the stockpiled metal.

“The copper cannot lie sitting there forever. It has to be taken out, and if you are going to take it out, you might as well export it,” Finance Minister Felipe Chapman told Bloomberg earlier this year.

Chapman added that not even Panama’s most radical environmentalists have argued against exporting the copper already mined.

First Quantum has initiated two arbitration proceedings, one under the Canada-Panama Free Trade Agreement and another under the International Chamber of Commerce, citing breaches of contract and treaty obligations. The first hearing is set for September 2025 in Miami.

Cobre Panama was the biggest foreign investment in the Central American nation, supporting over 40,000 jobs. (Image courtesy of Minera Panama.)

Despite these legal actions, First Quantum has emphasized that arbitration is not its preferred path, expressing a commitment to dialogue and finding a resolution beneficial to Panama and its citizens.

Cobre Panamá’s shutdown has had significant economic and social repercussions. First Quantum is said to have asked its employees in Cobre Panama to choose between taking the voluntary retirement offer that would come into effect from January 2025 or work with reduced hours.

The decision may put some strain on the Mulino’s administration, which has suggested the possibility of restarting the mine for an unspecified duration to cover the expense of a permanent shutdown.

 

Hydrogen Combustion Auxiliary Engine to be Tested in 2025 on UK Cargo Ship

Hydrogen combustion auxiliary engine will be tested on a UK cargo ship (Carisbrooke Shipping)

Published Nov 20, 2024 6:42 PM by The Maritime Executive

 

An innovative project designed to validate hydrogen combustion engines for ocean-going vessels and lay the foundation to scale up the technology is set to proceed in March 2025 aboard a cargo ship operated by Carisbrooke Shipping. The partnership led by Carnot Engines and funded as part of the UK government’s initiatives in decarbonization has secured a source for hydrogen from biomass to power the 40-day sea trials.

Waste-to-hydrogen producer Compact Syngas Solutions has joined the effort and will supply 200 kg of hydrogen for the trials. Based in Wales, the company has developed an advanced gasification process that generates electricity, heat, and hydrogen gas from waste products. It employs materials including waste wood and other selected non-recyclable resources in its process. Compact Syngas Solutions was the recipient of a UK grant for £4 million to develop its biomass and waste-to-hydrogen plants including the addition of carbon capture to its hydrogen production.

“Sourcing hydrogen for our trial has proven harder than we expected, and we’re massively grateful to Compact Syngas Solutions for helping out,” said Jeremy Howard-Knight, head of business development at Carnot. “It’s incredible to think that these huge ocean-going vessels are being powered by waste wood that could have ended its days by rotting on a tip.”

Carnot was awarded £2.3 million in February 2023 to deploy a 50kW hydrogen auxiliary engine demonstrator working with Carisbrooke Shipping, Brunel University, and the Manufacturing Technology Centre while involving Bureau Veritas and the UK’s Maritime and Coastguard Agency for regulatory compliance. 

The project is based on the assertion that smaller vessels running shorter ranges would be able to consider electrification or fuel cells, but for long-distance ocean-going cargo vessels this would not be viable. They assert that the cost, weight, and practicalities become prohibitive but their concept for a hydrogen combustion engine would be a compelling solution. 

Carnot reports by pioneering the use of technical ceramics in combustion engines, it has eliminated major limiting factors to engine efficiency. It reports its engines have a break thermal efficiency of 70 percent, nearly double what is achieved by modern state-of-the-art engines. Carnot said the engines will massively reduce fuel consumption and costs. It highlights that above a certain air-to-fuel ratio, hydrogen combustion emits zero emissions with negligible levels of CO2, NOx, and PM.

The demonstration calls for testing of the engine at Brunel University and then it will be placed aboard one of Carisbrooke Shipping’s K-class cargo ships. Built in 2010 in China, the vessels are 6,800 dwt and have a length of 106 meters (348 feet). They operate at speeds of up to 11 knots with a MAK main engine and a Sandfirden diesel auxiliary engine. 

The trial will run for 40 days in the Irish Sea starting in March 2025. The vessel will be operating between Bristol and Belfast. Carnot says the 50kW engine will be a precursor to 200 to 400kW auxiliary engines. Eventually, they expect to produce a 1 to 10MW main engine based on this technology.

 

Australia Bans Cargo Ship for Six Months Citing Unsafe Cargo Operations

Australia banned a cargo ship in an ongoing dispute over stowage of dangerous goods (Spliethoff file photo)

Published Nov 21, 2024 12:36 PM by The Maritime Executive

 

 

The Australia Maritime Safety Authority (AMSA) has issued its fourth ban this year on a cargo ship this time citing “unsafe cargo operations” as the reason for denying entry into Australia’s ports. AMSA said the authority has escalated its enforcement action to send a message to operators that risks to safety and the marine environment would not be tolerated in Australia.

The Dutch-flagged general cargo ship Marsgracht (12,284 dwt) operated by Spliethoff was issued a “refusal of access” banning the ship for 180 days from Australian ports. According to AMSA, the vessel was detained for “improper stowage of dangerous goods,” during a port state inspection on November 14 at Port Alma.

The vessel, which was built in 2011 is 466 feet (142 meters) in length. The spec sheet posted by Spliethoff notes the ships are “fitted for carriage of dangerous goods of all IMO classes.”

AMSA highlights that it was the second time this vessel had been detained in Australia. In February at the same port, AMSA also cited the vessel for the same issue of improper stowage of dangerous goods.

“This recurrence highlights systemic failures in the ship’s safety management system and a serious lack of effective remedial action,” contended AMSA announcing today’s action. 

It however appears to also be part of a broader disagreement between the shipping company and the Australian regulators. AMSA reports this detention was the fourth since July 2022 for a Spliethoff-operated ship for failing to comply with the code for stowage of dangerous goods. 

This reflects a broader pattern of non-compliance and poor performance, undermining the safety of seafarers and the Australian marine environment contends AMSA. Spliethoff they write is considered a poor performing operator, having been placed back on the list on February 8, 2024. As a result, all the company ships are eligible for inspection every three months in Australia as part of ongoing compliance activities with company ships. AMSA reports it will review the performance of Spliethoff's Bevrachtingskantoor after 12 months.

“AMSA takes its role as a maritime safety regulator very seriously and will not hesitate to take swift and appropriate action against unsafe ships, their owners and operators," said Executive Director Operations Michael Drake. "When it comes to loading dangerous cargo, there is no scope for non-compliance. International minimum standards exist to protect the lives of seafarers, and our precious marine and coastal environments.”

In the first half of 2024, AMSA banned three other vessels from Australia’s ports. The issues included maintenance and failure to properly report to the Australian authorities. The rate however is down from 2023 when nine bans were issued from Australian ports.

 

Plan Approved to Save Cal Maritime from Looming Financial Collapse

Cal Maritime has been at its location since 1943 seen with its current training ship Golden Bear (Cal Maritime)

Published Nov 21, 2024 6:05 PM by The Maritime Executive

 

 

The Board of Trustees of California State University approved a plan today designed to preserve and strengthen the California State University Maritime Academy (Cal Maritime), which according to the board was in danger of financial collapse. It is the only U.S. maritime academy in the western United States and just one of six state programs, in addition to the federal U.S. Merchant Marine Academy in Kings Point, New York.

The plan that was approved yesterday in committee and today, November 21, by the full board calls for Cal Maritime to be merged into the larger California Polytechnic State University, San Luis Obispo, which enjoys a strong reputation and is known for its agriculture and engineering programs. The two campuses, which are approximately 250 miles apart, will be administratively merged effective July 1, 2025, and starting with the 2026-2027 academic year the maritime students will be officially enrolled at Cal Poly with the land-based program becoming Cal Poly Solano Campus. The merchant marine licensing program and the training ship will become Cal Poly Maritime Academy.

“This historic action will increase opportunities for current and future students and reinforces support for our critically important educational mission,” said Cal Maritime Interim President Michael J. Dumont.

Presenting the options to the board, the Cal State chancellor’s office painted a bleak picture for the maritime program which is just shy of its 100th anniversary. They said the options were either the integration of what is the smallest university in the state system into a larger institution or initiating immediate steps for the closure of Cal Maritime. 

The report highlighted that enrollment in the maritime program has declined dramatically. Since 2016-2017 they said the program has lost a third of its enrollment dropping from around 1,100 cadets to 761 last fall. The report said that all the state maritime academies around the United States had faced similar challenges in part reflecting the challenges of the U.S. merchant marine. 

The institution was reported to be faced with rising operating costs and a loss of income from fewer enrollments. Earlier this year it instituted a hiring freeze and eliminated some positions while in June the idea of merging Cal Maritime and Cal Poly was first presented. Estimates are that they can realize $30 million a year in financial savings. Reports indicate that the board was told the alternative to save Cal Maritime would require as much as $30 million annually in financial aid representing a nearly 50 percent increase on its current $52 million annual budget.

“Cal Poly and Cal Maritime share an academic grounding in hands-on learning, and the integration of our universities will enhance student success on both of our campuses while helping to grow a diverse pipeline of talent to our nation’s maritime industries,” said Cal Poly President Jeffrey D. Armstrong.

 

Cadets aboard the current training ship Golden Bear -- Cal Maritime is the only maritime academy in the western United States (Cal Maritime)

 

The maritime program was founded in 1929 as the California Nautical School, originally located in Tiburon, California. It was renamed California Maritime Academy in 1939 and enhanced as part of the Merchant Marine Act of 1936 including relocated to San Francisco. The maritime academies took on a new significance during World War II with Cal Maritime’s education accelerated to a 17-month program. It was given a new permanent home in 1943 on a 67-acre site at Morrow Cove in Vallejo.

Cal Maritime will retain its maritime focus within Cal Poly, with the integration of operations, resources, and governance structure. The academy's specialized degree programs, three of which lead to a Merchant Marine license issued by the U.S. Coast Guard, will continue to be offered at the Solano location.

The Maritime Administration has also provided a significant commitment to Cal Maritime. The fifth and final training ship under construction at the Philly Shipyard has been allocated to Cal Maritime and is due for delivery in 2026. New York, Massachusetts, Maine, and Texas are receiving the other training ships from MARAD.

The hope is that the combination will provide a new basis to expand enrollment at Cal Maritime. The enhanced financial position will also permit it to undertake deferred maintenance programs as well as expand the dock to accommodate the new training ship. 

The board of trustees agreed that Cal Maritime continues to be a critical program with the state’s Lt. Governor saying it was an opportunity to elevate both campuses of the state university. The Cal State chancellor’s office also expects to invest $5 million over the next seven years with most of it going to financial aid. They have also hired a specialist firm and are investing $2 million into the consolidation of the two universities.