Bulk cargo liquefaction – why is it still happening?

Cargo liquefaction remains the greatest contributor to loss of life and concern of the bulk carrier industry” (INTERCARGO, 2022).

According to the latest INTERCARGO Bulk carrier casualty report for the period from 2012 to 2021, 70 seafarers lost their lives as a result of five bulk carrier casualties, four carrying nickel ore and one carrying bauxite.

While the report indicates that ship operators are well aware of the risks to their crews and their vessels caused by carrying cargos prone to liquefaction and make every effort they can to mitigate those risks, “it is the lack of consolidated effort and commitment from many stakeholders to resolve the problem that is evident. These include shippers, receivers and port state authorities at loading and discharging ports. This makes it imperative that the minimum obligations under the IMSBC Code are properly fulfilled”.

The question is: why aren’t they properly fulfilled?

First, let’s have a brief look into the history of the International Maritime Organization (IMO) work on bulk cargo liquefaction.

The problem of liquefaction was first officially recognized by the IMO (at the time called IMCO - Inter-governmental maritime consultative organization) in 1962. The Working Group on Bulk Cargo published its findings on liquefaction in 1964. The Code of Safe Practice for Solid Bulk Cargo was first adopted in 1965 and replaced by the International Maritime Solid Bulk Cargo (IMSBC) Code in 2011 when it became mandatory under SOLAS.

Although the IMSBC Code has its shortcomings (mentioned in the article “Deadly solid bulk cargoes”) it is clear on the obligations of vessels, shippers, and competent authorities, and on procedures to be followed prior to, during loading and transport of cargoes prone to liquefaction. And yet the problem persists.

So, after 60 years, one finally has to look elsewhere for the source of the problem.

Let’s take nickel ore for example. In 2010, in just over a month, nickel ore cargo liquefaction claimed the lives of 45 seafarers in the Indonesia to China nickel ore trade, gaining a reputation as ‘the deadliest bulk cargo’. Although Indonesian cargo of nickel ore caused greater loss of life than cargo loaded in the Philippines, there have been a number of reports of cargoes of nickel ore loaded in both countries and liquefying, but not resulting in the loss of lives and vessels.

Since Indonesia banned its nickel ore export in 2020 (for economic reasons), let us have a look at the practices of loading and the origin of nickel ore in the Philippines.

The majority of nickel ore is mined in the eastern Philippines, where most mines are situated in remote locations thus making it difficult for independent surveyors acting for the vessel to attend the mines and take samples of the cargo to be loaded. Some mines do not even allow access for inspection of the stockpiles prior to loading. There are no loading/port facilities; cargo is transferred straight from the mine pit to barges and then to vessels loading at anchor. There is no pronounced dry season anymore; it rains throughout the year. Laboratories for testing cargo flow moisture point (FMP) and moisture content are owned by the mines. Where samples have undergone independent analysis the error in the mines’ FMP was between 8 to 10%.

To get to the bottom of the problem, one must delve deeper and although it may seem unrelated to nickel ore cargo liquefaction, it is important to understand the background of mining in the Philippines.

In June 2016 Regina Lopez was appointed Secretary of the Department of the Environment and Natural Resources (DENR). In February 2017 Regina Lopez ordered the closure of 23 mines (out of 41) and the suspension of five for alleged environmental violations. The order included the banning of new open-pit metal mines. Some of the violations allegedly committed by the mining firms were the illegal cutting of trees, contamination of rivers, and destruction of watersheds.

Regina Lopez said: “We have had mining in this country for over a hundred years and until now we don’t even have one rehabilitated mine. Just gaping holes, destroyed rivers, children with brain disease …. If we kill our land, our water, our air for whatever reason, you kill life. For me, you kill the constitutional right of a Filipino, which is the right to a clean and healthy environment. Here it is forces of greed and selfishness that threaten life. I see the government as the only institution that’s in the position to curtail the forces of greed and selfishness. It’s the role of government to do that.”

Regina’s short-lived tenure of only 10 months ended in May 2017, when she was overthrown by members of the appointments commission who owned mines ordered for closure. Once rejected by the commission, an appointee cannot be re-appointed.

Needless to say, all mines are operational again, and a four-year ban on new open-pit mines has been lifted in December 2021.

Was Regina Lopez right in shutting down mines and banning new open pit mines?

The answer is contained in the recent statement by the Mines and Geosciences Bureau director: “We cannot sacrifice the environment for the sake of growing the economy but we cannot also be fully environmentally conscious or depend largely on environmental protection without developing the economy.”

This statement contains admittance of causing environmental damage and the intention to continue with damaging practices, albeit with a promise of “minimising the adverse impact of surface mines”.

About 12 new open pit mines (mostly nickel) began commercial operation in 2022, with the justification of aiding pandemic recovery. Importantly, this government decision was underpinned by the knowledge that demand for electric vehicles increases and nickel is a key ingredient in the rechargeable batteries that power them. Obviously, the problem is political, with a hint of economic justification. Or, in simple terms, it is all about chasing hefty profits.

Environmental damage caused to provide ingredients for green technology is another matter.

How is all this related to bulk cargo liquefaction?

The very root of the problem of nickel ore cargo liquefaction, (similar to other bulk cargoes in certain parts of the world) is that the world appears to be rather desperate for nickel ore and miners are equally (if not more) desperate to sell it. And, either the question has never been asked or there is simply no plan whatsoever to invest some of the profits in building infrastructure to be able to produce and present for loading cargo of nickel ore sufficiently dry for safe transport by sea.

Nickel ore mining is a multi-million dollar industry, all mines are privately owned and although the miners’ lobby may be very strong, there must be a way of forcing them to comply with legislative requirements. Although with a different agenda, Regina Lopez proved that it can be done. ?

Finally, after 60 years, all eyes should be off Masters and their legal obligations and directed towards shippers/mines forcing them to fulfill theirs. In the meantime, the miners will keep dumping their nickel ore ‘wet tonnes’ on board vessels, while seafarers carrying the notorious cargo can only pray for good weather and hope for the best.

INTERCARGO: Bulk Carrier Casualty Report (Years 2012 to 2021 and trends)

PANDIMAN PHILIPPINES: Nickel Ore Cargo Philippines (2015)

MINING TECHNOLOGY: No sacrifices: inside nickel mining in the Philippines (2022)

S&P GLOBAL MARKET INTELIGENCE: Philippine nickel mining to post increased 2021 production, despite heavy rains (2021)

YALEENVIRONMENT360: How an Activist Minister in Philippines Took On the Mining Barons (2017)