It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Tuesday, March 21, 2023
Rio Tinto has more work to do, cultural heritage audit finds
Reuters | March 20, 2023 | Juukan Gorge cave sites seen before the destruction. (Screenshot via YouTube.)
Rio Tinto has more work to do to protect Indigenous cultural heritage at its mines around the world, according to an independent audit of its practices, the world’s biggest iron ore miner said on Monday.
Rio Tinto commissioned the audit as part of a pledge to overhaul its practices after it destroyed culturally significant rock shelters at Juukan Gorge in Western Australia for an iron ore mine in 2020.
The report noted improved practices particularly at Rio’s iron ore operations but found it needed to more consistently meet best practice standards, which includes co-designing mining plans with affected communities, at its other global sites.
At around half of its sites, Rio Tinto either was missing a cultural heritage plan, its plan was out of date or had critical gaps, the report by sustainability consultancy ERM found.
“Consequently, there is a risk that current and emerging impacts to cultural heritage are not being readily identified and/or appropriately managed,” ERM said.
One of the major changes Rio Tinto vowed to make in the wake of the destruction at Juukan Gorge was to ensure project bosses were aware of and responsible for cultural heritage protection on their patch by embedding it into their decision-making process.
The audit also found nearly half of Rio’s assets lacked access to appropriately qualified and experienced cultural heritage expertise within the business. Cultural heritage management should not be contracted out because ownership of decisions should reside at Rio Tinto, ERM said.
The global miner needed to improve and make more consistent its cultural heritage planning around water management and around closure of its operations, it added.
The report followed an audit of 37 Rio Tinto assets. The audit was completed throughout 2021 and 2022 across 20 assets in Australia and 17 assets in other countries where Rio Tinto operates including Canada, South Africa, US and Mongolia.
(By Melanie Burton; Editing by Simon Cameron-Moore)
How silicon, gold, copper help destroy covid-19 virus
Staff Writer | March 20, 2023 | Computer-generated representation of SARS-CoV-2 under electron microscope. (Image by Felipe Esquivel Reed, Wikimedia Commons).
Silicon, gold and copper, as well as electric fields, can be used to destroy the spike proteins of SARS-CoV-2, the virus that causes covid-19, according to new research.
“Coronaviruses have spike proteins on their periphery that allow them to penetrate host cells and cause infection and we have found these proteins become stuck to the surface of silicon, gold and copper through a reaction that forms a strong chemical bond,” Nadim Darwish, who led the research at Curtin University, said in a media statement.
“We believe these materials can be used to capture coronaviruses by being used in air filters, as a coating for benches, tables and walls or in the fabric of wipe cloths and face masks.”
In a paper published in the journal Chemical Science, Darwish and his colleagues explain that, in addition to the metals, coronaviruses could be detected and destroyed using electrical pulses.
“We discovered that electric current can pass through the spike protein and because of this, the protein can be electrically detected,” PhD candidate Essam Dief said.
In Dief’s view, this finding can be translated into applying a solution to a mouth or nose swab and testing it in a tiny electronic device able to electrically detect the proteins of the virus. This would provide instant, more sensitive and accurate covid testing.
In addition to the prior, by applying electrical pulses, the researchers found that the spike protein’s structure is changed and at a certain magnitude of the pulses, the protein is destroyed. This means that electric fields could deactivate coronaviruses.
“So, by incorporating materials such as copper or silicon in air filters, we can potentially capture and consequently stop the spread of the virus,” Dief said. “Also importantly, by incorporating electric fields through air filters, for example, we also expect this to deactivate the virus.”
For the researchers, this study is quite promising both fundamentally, because it enables a better understanding of the viruses in question, and from an applied perspective as it helps develop tools to fight the transmission of current and future coronaviruses.
Eurobattery Minerals ups stake in Hautalampi nickel-cobalt-copper project in Finland
Staff Writer | March 21, 2023 | Hautalampi nickel–cobalt–copper project in Finland. Image from Eurobattery Minerals.
Eurobattery Minerals announced Tuesday that the company is acquiring another 30% of shares in FinnCobalt Oy, the owner of the ground and mining rights to the Hautalampi nickel-cobalt-copper project in Finland in a €1 million ($1.8m) cash and shares deal, upping its stake to 70%.
The company has the right to acquire 100% of the shares in FinnCobalt in a staged process until May 2024.
The announcement comes a day after Eurobattery Minerals released the results of a pre-feasibility study, reporting strong economics for the project.
The 280-hectare Hautalampi project is located in the Outokumpu mining camp, the same area as the famous Keretti copper mine, which was active between 1912 and 1989. According to Eurobattery Minerals, the orebody is parallel to and above the exploited copper deposit. A historical resource estimate for the project shows 3.2 million tonnes at 0.43% nickel, 0.35% copper and 0.12% cobalt.
In 2021, an updated resource estimate released for Hautalampi showed that the total tonnage in the measured, indicated and inferred resource categories increased approximately 100%, while contained metal approximately 50% in the mine lease area.
In the measured category, the resource has been estimated at 2.58 million tonnes grading 0.38% nickel, 0.28% copper and 0.08% cobalt. In the indicated category, the estimation is at 2.70 million tonnes grading 0.31% nickel, 0.20% copper and 0.08% cobalt. Contained metals have been estimated at 18,289 tonnes of nickel, 12,783 tonnes of copper and 4,337 tonnes of cobalt.
“We are very pleased to continue to deliver on our strategy to provide battery minerals from Europe to Europe, now as the majority owner of the Hautalampi mine project,” Eurobattery Minerals CEO Roberto García said in a news release.
“With the pre-feasibility study just announced we know that the economic outlook for the battery mineral mine in Finland is strong,” said Martínez.
According to the pre-feasibility study, with a conservative metal price, and a total capital expenditure of €65.1 million euro excluding contingency the payback period is 4.6 years. Mining will commence after a one-year construction period including rehabilitation of the underground mine, construction of the surface crushing and processing plants, and a new tailings storage facility, the company said.
Total metal production during the anticipated 12 years mining operations will be 11,400 tonnes of nickel and 2,900 tonnes of cobalt in concentrate and 9,600 tonnes of copper in concentrate.
Investors question Teck on climate even after Canadian miner’s coal spin-out
Investors have yet to embrace Canadian miner Teck Resources Ltd’s proposal to spin off its highly polluting coal business and focus on production of copper to help supply society’s move toward electric vehicles.
Last month, Teck announced a split into copper-focused Teck Metals and Elk Valley Resources (EVR), which will focus on high-margin coal for steel making. Initial euphoria sent Teck shares higher, but since then, lingering questions about CO2 emissions at both companies have slammed the stock, which has lost a fifth of its value.
“I think the spin off makes sense in that it hard codes Teck Metals’ transition plan,” said George Cheveley, portfolio manager at London-listed asset manager Ninety One.
“However, they will also need to articulate a very clear transition plan for Elk Valley Resources as that is the company taking on the coal. This needs to be a credible plan as well and, whilst it can be longer term, it needs to demonstrate how they can support decarbonisation.”
The company has long debated how to transition to a greener future and attract investors concerned about environmental, social and governance (ESG) issues without losing profits or revenues from its highly polluting coal mines.
The divorce of Teck’s operations is messy from an environmental perspective. Key remaining questions include exactly when Teck will cut ties with EVR. The coal miner is set to pass through 90% of its free cash flow into the copper business for at least a decade.
Profitable assets that emit a lot of carbon present a dilemma for Teck and peers whose other operations could put them at the forefront of the transition to clean energy.
As markets begin to more accurately price climate risks and opportunities, some corporate boards are more open to spinning out carbon-intensive operations to attract investors and lower the capital cost of their environmentally friendly operations.
Other mining companies have also split off coal assets. Brazilian miner Vale, for example, has said it will separate its base metal and iron ore business to prepare for future growth from the electric vehicles market.
In 2021, South African miner Anglo American demerged and listed its thermal coal business. Some investors criticized the company, saying it undervalued its environmental liability costs, but the company called their analysis “flawed”.
Teck told Reuters EVR was committed to maintaining “strong” social and environmental performance, including reaching net-zero emissions by 2050, and would establish a trust to fully cover long-term environmental obligations.
However, Todd Kapala, vice-president and co-head, Canadian Equities of Addenda Capital, which owns a stake in Teck, said more was needed: “We want to see further leadership on reducing greenhouse gas (GHG) emissions.”
Before the split was announced, investors had had only partial success in pushing Teck to align its transition plan with the world’s climate goal, and still had questions about issues including its short-term emissions targets.
In its assessment, the Climate Action 100+ investor group said Teck had also yet to align its capital expenditure plans with the goals of the Paris Agreement on climate, which aims to limit global warming to 1.5 degrees Celsius.
A recent study by the International Finance Corp said miners must reduce emissions by almost 90% to make it worthwhile to dig out copper and other metals required for EVs.
“The full implications of Teck’s spin-out are yet to be understood – we are still in early days,” said Anthony Schein, Director of Shareholder Advocacy at Canadian shareholder engagement group SHARE, which is co-leading talks with Teck on behalf of CA100+, including about “the implications of this spin-off for climate action”. Share slide
The questions have weighed on Teck shares, which lag mining industry peers. Nippon Steel Corp which in the new structure will own 10% of EVR, has said it is open to increasing its stake to 17% and is also seen as likely long-term majority owner of the assets.
Teck is by no means the worst performer on ESG issues. Sustainalytics, a leading provider of ratings used by investors, rated the company 7th out of 216 diversified metals companies while MSCI graded it a “leader” among 72 companies. Refinitiv, part-owned by Reuters parent company Thomson Reuters, ranked Teck 14th out of more than 400 peers.
“The coal business is profitable for now, and using its proceeds to fund its copper business is a pragmatic way towards transition,” said Dustyn Lanz, Senior Advisor ESG Global Advisors.
(By Divya Rajagopal and Simon Jessop; Editing by Denny Thomas and David Gregorio)
CRIMINAL CAPITALI$M
Comment: The return of the London Metal Exchange’s nickel curse
Reuters | March 21, 2023 | London Metal Exchange – Image from Achives
The London Metal Exchange (LME) has discovered that some of its registered nickel is missing.
Nine warrants, equivalent to 54 tonnes, have been declared invalid after being found to be “non-conformant with the contract specifications”, the LME said in a March 17 notice.
What should have been bags of nickel briquettes grading at least 99.8% pure metal have turned out to be bags of stones.
The incident comes one month after Trafigura took a $577 million charge against cargoes of nickel that turned out to be steel. The trading company alleges “a systematic fraud” and is pursuing legal action against companies associated with Indian businessman Prateek Gupta. A spokesperson for Gupta has said that they were preparing “a robust response” to the allegations.
The latest incident also comes almost exactly one year after the LME suspended nickel trading and canceled trades, a fateful decision that has generated a slew of lawsuits from disgruntled fund players and an unprecedented enforcement investigation by UK regulators.
The LME, owned by Hong Kong Exchanges and Clearing, seems to be cursed by the devil’s metal.
Missing nickel
It’s not the first time that LME nickel stocks have been in the legal limelight but previous scams, such as one which resulted in a courtroom tussle between Natixis and Marex after the unraveling of a repo deal in 2017, were based on false receipts.
This one seems to be a much more basic deception and one which raises serious questions about the controls at the warehouse operator in question.
LME rules stipulate that all metal placed on warrant must be weighed, a requirement that is particularly important if the metal is bagged and can’t be visually checked for any irregularities.
It is clearly also in the warehouse operator’s own interest not to accept anything which isn’t what it seems, particularly a metal that is currently valued at $22,750 per tonne.
Bags of stones shouldn’t pass any inspection, whether at original load-in or during the annual audit of registered stock required by the LME’s warehousing agreement.
Access World has confirmed to Reuters the fake nickel was located in one of its sheds in Rotterdam. The company “is currently undertaking inspections of warranted bags of nickel briquettes at all locations and will engage external surveyors to assist,” it said.
Access was owned by Glencore until January when it was sold to Global Capital Merchants.
The LME has required every other warehouse operator to check its nickel and advised holders of off-warrant stocks to do their own inspections if they haven’t already after the Trafigura revelations.
So far at least, there is nothing to suggest that this wasn’t a one-off incident, affecting just 0.14% of live LME nickel stocks, according to the LME.
Reputational hit
The LME, it is worth noting, does not itself own or operate warehouses for the storage of warranted metal but rather licenses approved operators.
Warehouse companies seeking LME approval must meet a host of capital adequacy, insurance and detailed operating qualifications. They must also allow routine inspections by exchange staff to inspect warranted metal.
LME registration is therefore something of a gold standard for metals warehousing, which is why the exchange can boast over 500 facilities across 32 locations in Asia, Europe and the United States.
Or at least it was.
While we wait to find out exactly how 54 tonnes of nickel were replaced with stones, the reputational damage to the LME’s storage system has already been done.
The LME may not own or operate any sheds but it is the front-line regulator of its warehousing system.
Deliverability lies at the heart of the LME’s price discovery role and good warehousing practice is critical to maintaining an orderly market.
It’s a point the exchange has repeatedly underlined in past clashes with warehouse operators over long load-out queues, which disrupted the relationship between LME and physical market pricing.
An isolated incident at one particular warehouse wouldn’t at any other time have much impact on the LME’s broader reputation.
But it folds into the bigger issues around the exchange’s governance and regulatory capacity after the blow-out of the nickel contract this time last year.
Broken nickel
The latest scandal will also intensify the question of whether the LME nickel contract is fulfilling the function of an efficient price discovery forum.
The mismatch between the LME’s Class I refined nickel contract and the new flows of nickel chemicals feeding the electric vehicle battery sector was a root cause of last year’s market mayhem.
The big short in the market, China’s Tsingshan Group, may be the world’s largest producer but not in a form it could deliver against its positions on the LME.
The nickel market was already looking for different pricing solutions before the March 8, 2022 suspension of LME nickel trading. The subsequent collapse in activity has fuelled the debate.
Average daily volumes on the LME contract were 34,613 lots in February, down 58% on February 2022, the last full month of trading before the March breakdown.
The LME is hoping that the restoration of trading in Asian hours will revive flagging activity.
The first attempt was blocked in January by Britain’s Financial Conduct Authority (FCA) due to concerns about the LME’s ability to maintain market order.
It finally got the go-ahead to extend hours on March 20, a date which has just been pushed back a week to next Monday so everyone can check their nickel, particularly if it’s bagged.
The LME already had a mountain to climb to rebuild trust in its nickel contract. The mountain has just grown by another 54 tonnes of stone.
(The opinions expressed here are those of the author, Andy Home, a columnist for Reuters.)
(Editing by Susan Fenton)
E3 Lithium expands resource of Bashaw, Canada’s largest brine project
Staff Writer | March 21, 2023 | E3 Lithium’s goal is to produce high-purity, battery-grade lithium products. Credit: E3 Metals
E3 Lithium (TSXV: ETL) says its latest resource upgrade makes Alberta’s Bashaw district, Canada’s largest brine project, a contender among the world’s biggest battery metal suppliers.
The sprawling Bashaw district between Calgary and Edmonton now hosts 6.6 million measured tonnes of lithium carbonate equivalent (LCE) and 9.4 million indicated tonnes of LCE for a total of 16 million tonnes.
“This resource upgrade is the largest of its kind in Canada and is significant on a global scale,” Chris Doornbos, CEO of E3 Lithium, said in a news release on Tuesday. “The amount of data and geological work required to upgrade resources of this magnitude is significant and further increases our understanding of the Leduc aquifer and as a result, our technical confidence in our commercialization plans.” The upgraded Bashaw is one of the world’s largest direct lithium extraction brine projects, featuring investment by the country’s second-largest integrated oil company, Imperial Oil, and support from the federal government. The new resource dwarfs Canada’s estimated 3.2 million tonnes of measured and indicated lithium resources in hard rock deposits, according to Natural Resources Canada.
Calgary-based E3’s upgrade used data and core sample analysis from its 2022 drill program. It also developed a geological model of the Bashaw district showing details of reservoir properties.
A breakdown of the resources shows the project’s Clearwater area has measured and indicated resources of 11.1 billion cubic metres of brine with a median lithium concentration of 74.5 mg per litre for contained metal of 4.3 million tonnes LCE. The remaining Bashaw district has 29.2 billion cubic metres of brine with the same median concentration for 11.7 million tonnes LCE.
E3 said it expanded the Clearwater area and that it held 900,000 tonnes of inferred LCE in its Rocky area west of the Bashaw district. Bashaw also includes the Exshaw area.
The project aims to tap lithium-enriched brine from the Leduc aquifer, a dolomitized ancient reef complex that spans hundreds of square kilometres and is over 200 metres thick.
A 2020 preliminary economic assessment of developing the Clearwater area estimated annual output of 20,000 tonnes of lithium hydroxide. The initial capital cost was pegged at $602 million. The assessment figured an after-tax net present value of $820 million with an 8% discount rate producing a 27% internal rate of return.
E3 received C$27 million in November from the federal government’s Strategic Innovation Fund. Imperial Oil, a Canadian unit of ExxonMobil, said last June it would invest C$6.4 million into exploring the extraction of lithium from below its historic Leduc oil field, one of the first crude oil discoveries in western Canada.
US Forest Service to OK land swap for Rio’s Tinto’s Arizona copper mine before July
Reuters | March 21, 2023 | Aerial view of part of the Resolution Copper project. Credit: Wikipedia
The US Forest Service plans to re-publish an environmental report before July that will set in motion a land swap between the US government and Rio Tinto, allowing the mining giant to develop the controversial Resolution Copper project in Arizona.
The move would be the latest blow to Native Americans who have long opposed the mine project, which would destroy a site of religious importance but supply more than a quarter of US copper demand for the green energy transition.
The complex case centers around a land swap approved by Congress in 2014 that required an environmental report to be published, something the Trump administration did shortly before leaving office. President Joe Biden then unpublished that report in March 2021 to give his administration time to review the Apache’s concerns, though he was not able to permanently block the mine.
Meanwhile, Apache Stronghold, a nonprofit group comprised of members of the San Carlos Apache tribe and others, sued to prevent the transfer of the federally owned Oak Flat Campground, which sits atop a reserve of more than 40 billion pounds of copper, a crucial component of electric vehicles. Several courts have ruled against the group.
Joan Pepin, an attorney for the Forest Service, told an en banc hearing of the 9th US Circuit Court of Appeals on Tuesday that “the prediction for that (new environmental report) is to be ready this spring.”
The Forest Service is not waiting for the court’s ruling to publish the new report, Pepin said, adding that the agency does not believe an 1852 treaty between the US government and Apaches gives Native Americans the right to the land containing the copper.
“This particular treaty is just a peace treaty. It doesn’t settle any rights to land and it doesn’t create any land rights,” Pepin told the court.
The Apache Stronghold held a ceremony outside the Pasadena, California, courthouse on Tuesday to protest Rio’s plans for the copper mine.
Reuters images showed some protesters drumming while others displayed placards with the words “Save Oak Flat” and “What will we do when the last mine is mined?” in the rain.
The 11 judges at the hearing peppered all sides about the legal concept of substantial burden and whether the government can do what it want with federal land, even if it prevents some citizens from fully exercising their religious beliefs. A full ruling is expected in the near future.
A Rio Tinto spokesperson said the company is closely following the case and respects the legal process, but believes “that settled precedent supports” the rejection of Apache Stronghold’s claims by a lower court. Rio has said it will smelt copper from the project inside the United States.
Representatives for Apache Stronghold and the San Carlos Apache tribe were not immediately available to comment, nor were representatives for BHP, which is helping Rio develop the mine.
“It is my hope that … the government will correct a troubling double standard in the law that has disenfranchised Native American practitioners and continued a history of callous disregard of their sacred sites by the government,” said Stephanie Barclay of Becket Law, a conservative legal group dedicated to religious rights that opposes the land swap.
(By Ernest Scheyder; Editing by Aurora Ellis, Chris Reese and Aurora Ellis)
Two Swiss-based independent research organisations have reported a few trading companies active in the extractive sector are disclosing financial data that others in the industry still claim needs to be kept confidential.
This is one finding from the 2023 edition of the Extractive Commodity Trading Report, which assesses ESG policies and practices of a sample of companies trading oil, gas, minerals or metals.
The new report, produced by the World Resources Forum (WRF) and the Responsible Mining Foundation (RMF), uses public data to assess 25 companies’ public disclosure and due diligence on corporate governance and risks of human rights abuses, illicit financial flows and environmental damage in their supply chains.
The report finds that while there has been no marked shift towards more responsible practices since the previous assessment in 2021, most companies show some improvement.
Key findings of the report are: Most due diligence systems fall far short of robust risk management; little effort has been made to improve effectiveness of due diligence systems; some companies are debunking the myth that public disclosure harms competitiveness and anti-bribery and corruption systems rarely supported by practical measures.
The report found weak progress overall, with some individual improvements, calling into question whether companies are ready to respond to the likely increased regulation of this traditionally opaque sector.
The report reveals that while most companies choose not to publicly disclose financial information such as their annual turnover, the taxes they pay, or their purchases from governments or state-owned enterprises, on each of these issues few companies, both private and public, show strong and voluntary disclosure.
“This report shows that trading companies can follow the examples of their more transparent peers to meet society expectations on public disclosure without compromising their own competitiveness,” Dr. Mathias Schluep, Managing Director of WRF said in a media statement.
According to the report, most companies’ due diligence systems are very limited, often stopping at the initial step of setting expectations for their suppliers.
Few systems extend to the critical stages of assessing supplier compliance, engaging with suppliers, and taking action to address any non-compliance.
Without these elements, the due diligence systems will never contribute to the prevention of critical supply chain risks, WRF noted, adding that there is little sign that companies are making efforts to review and improve the effectiveness of their due diligence systems.
About two-thirds of the companies show no evidence of tracking their performance on managing human rights risks in their supply chain.
The report’s findings are set in the context of ongoing commodity flow disruption and price volatility linked to recovering economies and sanctions imposed by some countries in response to the war in Ukraine.
Companies in the commodity trading sector are expected to come under greater scrutiny as banks and regulators demand more transparency and more evidence of responsible practices, WRF pointed out. Alongside the detailed assessment of companies’ ESG measures, the Report shows that over the last five years, more than half of the assessed companies (or employees of these companies) are known to have faced investigations or court cases related to illegal practices such as bribery, price manipulation, fraudulent transactions, money laundering and tax evasion. Incidents are reported to have involved over a dozen countries including all regions of the world. The full report is here.
The Metals Company (TMC) on Tuesday released the results of a lifecycle assessment of the environmental impacts of the company’s NORI-D Polymetallic Nodule Project carried out by Benchmark Mineral Intelligence.
TMC’s project in the Clarion Clipperton Zone (CCZ) in the Eastern Pacific Ocean, between Hawaii and Mexico aims to bring online the planet’s largest undeveloped deposit of battery metals. The nickel, cobalt, manganese and copper are found in potato-sized rock-like nodules.
The Benchmark study assessed, among others, the global warming potential, acidification, eutrophication, particulate matter formation and water consumption of mining, transport, processing and refining of the metals including an intermediate NiCuCo matte product and end-products nickel sulfate, cobalt sulfate and copper cathode.
The comparison to producing the same metals via key land-based routes, including from Indonesian nickel laterites and mixed cobalt and copper sulfides and oxides mined in the Congo showed NORI-D performed better in almost every impact category.
Currently the DRC is responsible for some 70% of global cobalt production, while Indonesia’s share of nickel output has grown to over 40%. NORI-D only underperforms when it comes to global warming potential and water consumption of cobalt sulfate from one land-based route from the DRC refined in China.
When it comes to nickel production the comparative impacts are particularly dramatic – the study found that Vancouver-based TMC’s nickel sulfate product would outperform not just Indonesian nickel but all other key land-based production routes, lowering emissions by between 70-80% on average, including with 70% lower global warming effects.
The full LCA report can be downloaded here and a summary document here.
New seabed mining code
The International Seabed Authority (ISA) has been working on a framework for deep sea mining since 2014 and is set to issue its approved mining code within months.
It is estimated that 21 billion tonnes of polymetallic nodules are resting on the ocean floor in the CCZ. Almost 20 international mining companies have contracts to explore the region, which spans over 5,000 kilometers and is considered the most prolific area for ocean mining.
TMC through its subsidiaries holds exploration and commercial rights to three polymetallic nodule contract areas in the CCZ regulated by ISA and sponsored by the governments of Nauru, Kiribati and the Kingdom of Tonga.
Millions of years old, the nodules grow by absorbing metals from the seawater, expanding slowly around the core of a shell, bone, or rock.
ADVENTURES IN GLOBALIZATION
History of Containerization: Simplicity and Economics
'Containerisation' of shipping cargo shaped your life in ways you can't even imagine. Development of the 'standard intermodal container' hugely reduced the expense of global trade - especially consumer goods. It made food, medical supplies, household items and energy affordable to people all over the world. Containerization drastically shifted the global economy and improved the living standards of people worldwide.
If you live in the OECD, most everything you consume likely didn't come from your country. Most of your things were shipped to you from overseas. Before containerisation, these goods were usually handled manually as 'break bulk cargo,' or basically loose items placed around a ship's hull. This took dozens of longshoremen days or weeks to load a ship. It made many basic goods prohibitively expensive to ship overseas.
In 1956, hand-loading a ship cost $5.86 a ton. After containerisation of that cargo, it cost only 16 cents a ton.
It seems simple, but by loading items into standard-sized boxes, they could be loaded and unloaded in seconds - not weeks. Shippers could load a container at their warehouse, truck it to the port, load, unload and be trucked to the destination as one single box – without it ever being opened.
In 1955, former trucking company owner Malcom McLean wanted to carry his trucks by sea along the US East Coast. Break-bulk ships were simply too inefficient due to the wasted space onboard. So, McLean packed the trucks into boxes, and developed the modern ‘intermodal container.’ Malcolm McLean sold everything he owned to buy two ships capable of carrying his trucks. It was incredibly successful. He later expanded his service to Rotterdam, Scotland, Vietnam, Hong Kong, and Singapore. Malcolm McLean is credited with the single greatest advance in global trade, and a huge contributor to global human development.
Containers reduced the shipping times from Europe to Australia from 70 days to 34 days, without increasing ship speed.
Nowadays, purpose-built container ships carry 90% of the world's non-bulk cargo. Containers dominate ports, warehouses, railways, trucks, and almost everywhere goods are carried. All transport logistics has been designed with the Standard Intermodal Container TEU (Twenty-foot equivalent unit) as a baseline. Technological advances have further refined container transport, but the concept remains remarkably simple. Just like carrying shopping bags from your car - just put them in a box.
Cameron Livingstone MNI is the secretary of the South Eastern Australia Branch of The Nautical Institute, which covers the region of New South Wales and the Australian Capital Territory. The Institute's aim is to promote professionalism, best practice and safety throughout the maritime industry and to represent the interests of its members.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.
Flag Administrators Denounce ITF’s Targeted Inspection Campaign
ITF said it would conduct as many as 1,000 inspections for safety, maintenance, and welfare issues in the coming eight weeks (ITF file photo)
Days after the International Transport Workers’ Federation (ITF) announced it was launching a target inspection program in the Mediterranean aimed at safety, maintenance, and seafarer welfare issues, the four flags cited by the union are all responding calling the accusations false and untrue, and not representative of the efforts undertaken by the flags. They cite inaccuracies in the union’s statements and the flags’ ongoing efforts to resolve issues and enforce standards.
“The ITF’s campaign does not reflect the reality of the situation regarding PISR,” responds the Palau International Ship Registry (PISR), one of the four cited by the union. The ITF said that it would be targeting up to 1,000 ship inspections for vessels operating in the Mediterranean in the coming eight weeks. They listed Palau along with ships flagged to the Cook Islands, Sierra Leone, and Togo as the targets saying that ships from these flags had over 5,200 deficiencies or detentions issued by European Port State Control enforcement agencies, as listed by the Paris MOU between 2020 and 2022.
“The statistical evidence presented by ITF to justify its unwarranted attack on PISR is wholly inaccurate, misinterpreted, and therefore clearly misleading. The negative picture presented of PISR is misguided, as any objective observer with maritime knowledge will understand,” the flag administrator wrote in its response. They are calling into question the rationale behind the campaign.
PISR reports that in the past three years, only two vessels in its registry were sent for demolition from the Mediterranean. Neither of these vessels they state recorded unsafe shipping issues or abandonment cases.
Further, like all the flag administrators, PISR responds to and takes seriously any case of abandonment reported to the administrator. The flags point out that the financial issues that drive most shipowners to abandon a crew or ship are beyond their control, but they respond to their responsibilities under the Maritime Labor Convention.
“PISR has taken immediate action to address all cases brought to the Flag administration to benefit seafarers’ rights under the MLC,” they write noting as recorded in the International Labour Organization’s official abandonment database, PISR swiftly addressed and officially resolved all abandonment issues.
The flags also refute the broader accusation that the ships operating under these flags account for numerous detentions and deficiencies. PISR says as per the last Paris MoU report, it only had nine detentions out of 162 inspections in the last five years.
“No other flag state has improved its standing within the Paris Memorandum of Understanding (Paris MoU) in the last five years. PISR for consecutive years has been in the top third tier of the Grey List in both Paris MoU and Tokyo MoU.”
The flags report they have been working with the international community with PISR noting that its vetting process, for example, which includes looking into the vessel’s age, ownership, and past performance history, has been audited by international bodies, including the IMO during IMSAS audits.
PISR notes it applies a strict vetting process for vessel acceptance. Similarly, the International Ship Registry of Togo in its response to Tradewinds cited the number of ship registration requests it rejects. They told Tradewinds they turned down 148 vessels last year and since 2020 more than 200 ships have been deregistered.
The flags all responded citing their disappointment in the ITF’s efforts. The union has frequently targeted flags of convenience in its campaigns. The administrators targeted in this latest effort believe it would be more constructive to work with the flags in their efforts to improve the situations for seafarers.
Maersk Unveils Pioneering First Methanol-Fueled Containership
Maersk is building a trailblazer 2,100 TEU methanol-fueled containership due to launch later this year (Maersk)
Maersk unveiled the designs for its pioneering methanol dual-fuel containership in social media posts today. The shipping giant revealed the first renderings of the ship which is expected to launch a new era for container shipping as the first vessel in the sector to operate on the green fuel and one of only 25 methanol-fueled ships currently in operation.
The first vessel was viewed as a trailblazer when Maersk announced its intentions in February 2021 and confirmed the construction order with South Korea’s Hyundai Mipo Dockyard in July 2021. So far, the company has only provided a few basic details saying that it would be a feeder ship to operate on its routes in the Baltic. It is 564 feet long with a 105-foot beam with a nominal capacity of 2,100 TEU including 400 reefer plugs.
The renderings show that it is a conventional design with an aft deckhouse for navigation and the accommodation block. The methanol tank, unlike some LNG tanks, is below deck. One visible feature from the rendering is boxes labeled “shore power” which appear to give the vessel cold ironing capability. Also, Maersk is evolving its livery and branding to highlight the vessel’s pioneering role. Painted on the hull is the slogan “All The Way to Zero,” which Brian Borup, Senior Brand and Design Manager, says was selected to highlight the decarbonization efforts.
Boxes as the rear are labeled "shore power" (Maersk)
”Developing this vessel is a significant challenge, but we have already come a long way in our work with the yard and the makers to reach this milestone,” said Ole Graa Jakobsen, Head of Fleet Technology, A.P. Moller – Maersk when the order was placed in 2021. “While we are pioneering these solutions for our industry, we are working with well-proven technologies and the cost potential from further scaling is becoming very clear to us.”
Propulsion for the ship is a MAN 6G50-LGIM main engine and methanol capable gensets that were being developed in a partnership between MAN Energy Solutions and Hyundai Engine and Machinery for the main engine and Himsen for the auxiliary engine. The plant was designed to operate on either methanol or traditional very low sulfur fuel. When the order was placed, Maersk said the limiting factor in vessel design was the engine while also commenting that the methanol-capable engine was costing 15 percent more than a traditional engine for the ship. They however said with the technology in place it would provide a model that would only require engineering to scale up.
The design project they noted was providing important information in the development of the propulsion plant and engineering for methanol systems. Maersk said they expected to gain operating experience from the vessel which would also be vital to the later ships.
“I am very happy with the progress we are making on the project,” said Jakobsen today while revealing the renderings. “We have now completed all key design-related milestones and production is progressing at full speed with delivery expected during summer. It has been a huge project, but we have succeeded not least due to great collaboration internally in Maersk and with our external partners.”
Work is also underway on Maersk’s first class of dual-fuel large containerships. The first steel cuts began late in 2022 for the 16,000 TEU methanol containerships which are due to enter service starting in 2024. In total, Maersk has 19 methanol-fueled containerships on order.
The ships are seen as the first wave of the industry’s next generation which is expected to grow quickly. DNV currently reports that 68 of the 81 methanol-fueled vessels on order and due for delivery by 2028 are container vessels. Senior Consultant Martin Wold noted at year’s end that methanol had reached a 13 percent share of alternative fuel orders in record time. Last month, he noted that methanol “stole the spotlight” with the orderbook continuing to grow and he has commented that “the pipeline is building” with the expectation that methanol will emerge as the next leader in alternative fuels.
Hybrid Ferries with Batteries/Solar Power to be Deployed in Hong Kong
Hybrid ferry with battery and solar power will run excursion trips from Hong Kong (BV)
Efforts are proceeding for the launch of two hybrid ferries that will be equipped with battery power units and solar power technology to be launched in Hong Kong next year. The first-of-their-kind ferries will be providing service from the Central Pier in the city to neighboring Cheung Chau, an excursion destination and island to the southwest between Hong Kong and Macau.
The vessels were designed by CoCo Yachts, a Dutch naval design and development company. Called the Urban Sprinters 1000, the design was sold to Sun Ferries of Hong Kong which ordered the construction of the first two vessels. Once both are in service by the first quarter of 2025, it is expected that they will transport around four million passengers a year.
Each of the ferries will be 212.5 feet in length with a 45.6-foot beam. They will have a capacity for 1,000 passengers on two decks. They will have an aluminum hull and superstructure. Eight entrance ramps will be provided on the main and upper decks for easy passenger access including wheelchair accessibility.
The design is a double hull, double-end ferry, with bridges at each end of the vessel and operated by a total of 10 crew with four on the bridge. The first of the two vessels will be built with hybrid diesel-electric propulsion and will be zero emission when sailing within pier boundaries as well as during berthing. The second vessel will be built with diesel-electric propulsion. Both ferries will have a battery pack for overnight energy to avoid diesel generators running that will receive power from solar cells on the roof of the cabin.
Each vessel will be fitted with four IMO tier III diesel generators, of which three will typically be in service, and one will be on standby. The service speed will be 16 knots. The vessels will also be equipped with four Azimuth L-type thrusters, each fitted with a PM electric motor. The propulsion plant will also ensure low noise and vibration levels for a smooth passenger ride.
During the approximately 60-minute trip passengers will also have access to a range of amenities. In addition to comfortable seating and air conditioning on both decks, there will be a third deck with open air accessible to passengers for sightseeing. There will also be a kiosk and information desks located on the main and upper deck, and a baby care room, as well as two dedicated pet areas on the main deck. There will also be a cargo bay located on the main deck near the mid-ship entrance.
The design and building of the vessel will be surveyed and certified by Bureau Veritas. All flag-related items, including safety and stability, will be delegated from the Hong Kong Marine Department to BV. According to BV, previous projects with similar delegated work have demonstrated this to be an efficient and reliable method for the development of the vessels.
The vessels will be built by YaGuang Technology Co. in Zhuhai, China. The first Urban Sprinter 1000 hybrid is expected to be delivered in Q2 2024, while the second vessel will be delivered in Q1 2025.
Photos: Salvor Confirms Location of Leaking Philippine Shipwreck
Thin threads of fuel oil seep from the topsides of MT Princess Empress (Fukada Salvage / PCG)
A Japanese salvor has completed an ROV survey of the sunken Philippine tanker Princess Empress, returning images of fuel oil cargo leaking from the vessel's topsides. The survey confirms the wreck's location and serves as a first step towards a potential remediation effort.
The small product tanker Princess Empress went down off Pola, Oriental Mindoro on February 28 with a cargo of 900,000 liters of fuel oil. The petroleum continues to leak out of its tanks, threatening a growing swath of the central Philippines with pollution. The slick has spread as far south as the Caluya Islands and as far northwest as the ecologically sensitive Verde Island Passage, a critical fishery breeding ground located between Mindoro and Luzon. Tens of thousands of fishermen, hospitality industry workers and residents have been affected by shoreline pollution and related business impacts.
The salvage vessel Shin Nichi Maru arrived in Mindoro on Monday, and after formalities in port, she headed directly to the suspected wreck site. A Philippine survey ship previously scanned the area to determine the most likely location of the tanker. Shin Nichi Maru deployed her ROV, the Hakuyo, and quickly confirmed that the sonar target was the Princess Empress.
Images courtesy Fukada Salvage / PCG
Now that the vessel's location has been confirmed, the government of Oriental Mindoro plans to meet with the PCG, the shipowner, the insurer and the charterer in order to plan the next steps of the response.
The Philippines' civil defense agency also called for procuring an ROV for domestic use, citing the long timeframe in between the casualty and the visual inspection. "The government itself still needs to procure an ROV in order to create its own capacity. As soon as possible, we need to buy our own ROV," Office of Civil Defense Administrator Ariel Nepomuceno said in a statement.
Skimming operations to recover oil from the Princess Empress, March 16 (PCG)
Shoreline pollution on ecologically-sensitive Verde Island, March 21 (PCG)
Documentation inquiry deepens
It is unclear whether the newbuild Princess Empress had the correct documentation at the time of the casualty voyage. Philippine maritime regulatory agency Marina insists that it never issued an amended Certificate of Public Convenience (CPC) - a permit to operate in domestic trade - to reflect the addition of Princess Empress to the shipowner's fleet. However, the PCG is in possession of what appears to be a signed copy of an amended permit, which was allegedly provided to the coast guard by the vessel's second mate.
On Tuesday, Marina regional director Marc Pascua insisted that he had never signed the document and that it contained material discrepancies that suggest that it may have been forged. At a press conference, he told GMA that the document misspelled his name ("Mark" instead of "Marc"), incorrectly listed his job title, and showed that it had been "certified" by a Marina staffmember who had already retired two years before. The Philippine Department of Transport is currently investigating whether the document was legitimate.
Courtesy PCG
Could Indonesia Block Foreign Nuclear Subs at Maritime Choke Points?
Would it be permissible under international law to deny access of foreign nuclear-powered submarines through archipelagic sea lanes?
A U.S. Navy warship transits the Strait of Malacca, 2017 (USN file image)
Indonesia, a nation that controls vital maritime chokepoints, finds itself at the epicentre of an unfolding geopolitical drama. As rivalry builds between the United States and China, the prospect of more nuclear submarines passing through Indonesian waters – including plans for AUKUS boats under the newly formed pact between Australia, the United Kingdom and the United States – brings an underlying legal question into focus.
All ships, including submarines, have guaranteed rights under the 1982 United Nations Convention on the Law of the Sea (UNCLOS), which Indonesia is a party to, to navigate through archipelagic waters under the right of “innocent passage” or the right of “archipelagic sea lanes passage”. The right of archipelagic sea lanes passage grants all ships the right to navigate continuously and expeditiously in their “normal mode” through archipelagic waters and the adjacent territorial sea. Submarines may navigate submerged since that is their normal mode of passage. This right “cannot be impeded or suspended” by the archipelagic state for any purpose. An archipelagic state may designate sea lanes through its archipelagic waters, but all normal routes used for international navigation must be included. If such a designation has not occurred or is considered a partial designation, the right of archipelagic sea lanes passage may be exercised through the routes normally used for international navigation.
While it is true that foreign nuclear-powered ships exercising the right of innocent passage are subject to stricter requirements under UNCLOS, the intention is not to limit passage.
Outside of archipelagic sea lanes, all ships are entitled to the more limited right of innocent passage throughout archipelagic waters and through the territorial sea. Submarines exercising the right of innocent passage must navigate on the surface and show their flag, and comply with other rules on innocent passage, such as refraining from engaging in any activity that is prejudicial to the peace, good order or security of the coastal state. An archipelagic state may “temporarily suspend the right of innocent passage” for foreign ships in specified areas of its archipelagic waters and territorial sea if such suspension is essential for the protection of its security, after providing due notice.
Statements by some Indonesian government officials in the wake of the AUKUS announcements suggest that Indonesia should consider prohibiting the passage of foreign submarines through its archipelagic waters if they are engaged in activities related to war or preparation of war or non-peaceful activities. While UNCLOS promotes peaceful uses of the seas and oceans, it contains no provision permitting archipelagic states to suspend the right of archipelagic sea lanes passage through their archipelagic waters. Rather, it specifically provides that there shall be no suspension of the right of archipelagic sea lanes passage.
While it is true that foreign nuclear-powered ships exercising the right of innocent passage are subject to stricter requirements under UNCLOS, such as carrying appropriate documents and complying with special precautionary measures established by international agreements, the intention is not to limit passage, but rather to guarantee that hazardous activities are effectively managed in line with international standards.
UNCLOS makes no exception to the passage rights of submarines based on their intended use or purpose. It only requires that the passage of submarines is in conformity with the provisions in UNCLOS. Even if there is an ongoing war, archipelagic states have an obligation to respect the right of archipelagic sea lanes passage of foreign submarines.
Some debate has arisen as to whether the provisions in UNCLOS are applicable during an international armed conflict. Views vary from UNCLOS not applying at all to UNCLOS remaining applicable. A moderate position suggests that the maritime rights and duties that states enjoy in peacetime continue with minor exceptions during an armed conflict.
In wartime, the law of naval warfare is considered the lex specialis regime that supersedes UNCLOS “for belligerent parties”. However, UNCLOS continues to govern the conduct between neutral and belligerent states, and among neutral states. This principle applies in particular to passage rights of foreign ships, including the rights of archipelagic sea lanes passage and innocent passage through archipelagic waters. The law of naval warfare thus modifies the relationship between neutral and belligerent states to some degree to ensure that neutral states are not harmed by the conflict and to prevent the conflict from escalating.
The law of naval warfare has evolved over time and is primarily based on customary international law. A series of conventions have been adopted to regulate naval warfare, but not all have been widely accepted. The San Remo Manual, prepared by a group of legal and naval experts, provides the most detailed and current rules for the conduct of naval warfare. While it is an unofficial statement, it appears to be widely accepted as a reflection of customary law.
Finally, the San Remo Manual provides that the passage rights applicable to archipelagic waters in peacetime shall continue to apply during an armed conflict. A neutral archipelagic state may condition, restrict or prohibit the entrance to or passage through its neutral waters by belligerent warships and auxiliary vessels on a non-discriminatory basis, “except for passage through archipelagic sea lanes” – whether formally designated or not.
Indonesia’s policy on the passage of AUKUS submarines through its archipelagic waters will have significant implications for its relationship with the countries involved and its commitment to uphold international law, especially if it attempts to prohibit or restrict the passage of foreign submarines in a manner inconsistent with its rights and obligations under UNCLOS. The legal principles and frameworks will undoubtedly play a crucial role in shaping the outcome.
Dita Liliansa is an Ocean Law & Policy Research Associate at the Centre for International Law (CIL), National University of Singapore (NUS). She earned her first law degree (LLB) from the University of Indonesia and Master of Laws (LLM) from the University of Washington as a Fulbright scholar. She has received recognition for her research work, including being awarded Second-Prize Winner of the 2021 Asian Society of International Law Junior Scholar Award. Apart from research, she is active in teaching university students and training government officials as well as participates in ASEAN and IMO meetings as an observer.
This article appears courtesy of The Lowy Interpreter and may be found in its original form here.
Cameron Livingstone MNI is the secretary of the 
Skimming operations to recover oil from the Princess Empress, March 16 (PCG)
