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At around half of its sites, Rio Tinto either was missing a cultural heritage plan, its plan was out of date or had critical gaps, the report by sustainability consultancy ERM found.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)

Related Article: Rio Tinto played down Australian heritage damage at inquiry, aboriginal group says

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

Reuters | March 21, 2023 |

Image courtesy of Teck Resources

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)

Related: Full 9th US Circuit to tackle complex Resolution Copper mining case

Due diligence systems fall short of robust risk management in extractive sector – report

MINING.com Editor | March 21, 2023 | 

File image.

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.

BAN SEA FLOOR MINING

Study shows seafloor cobalt, nickel mining dramatically lowers battery metals environmental impact

Frik Els | March 21, 2023 | 

Image: TMC March 2023

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

Malcolm McLean and his invention

PUBLISHED MAR 19, 2023 8:06 PM BY CAMERON LIVINGSTONE, SE AUSTRALIA BRANCH OF THE NAUTICAL INSTITUTE

 

'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.