SURVEYORS DAY 2013

“MARINE & CARGO” CLAIMS – TRENDS & COST”

IN RELATION TO

“LIQUEFACTION OF MINERAL ORE CARGOES”

WITH SUBSEQUENT LOSS OF VESSEL

PRESENTED BY:- BRUCE MORRIS NORTAS P&I MARINE SERVICES PTE LTD

NORTAS P&I MARINE SERVICES

P&I AND H&M CORRESPONDENT

FOR

ASSURANCEFORENINGEN GARD AS, ARENDAL NORWAY

Assuranceforeningen Gard is the largest Protection and indemnity insurer among the thirteen members of the International P&I Clubs, and ranks second in the Marine Insurance industry behind Allianz. Its Clients includes Shipowners and Operators, Shipyards and Companies involved in the upstream oil and gas markets. The group employs more than 410 people in 11 offices in Arendal, Athens, Bergen, Bermuda, Gothenburg, Helsinki, Hong Kong, London, New York, Oslo & Tokyo.

HISTORY P&I insurance developed over the last 150

years in response to the need by Shipowners for insurance cover for third party liabilities that were not recoverable under the standard hull and machinery policies.

The original purpose of P&I insurance – to protect shipowners against liability in respect of personal injury and death.

One-fourth collision liability (not covered by hull & machinery insurance & excess collision liability. i.e. liability in excess of sum insured in hull policy).

“LIQUEFACTION OF MINERAL ORE”Liquefaction of Mineral Ore causes shift of cargo and loss of stability. Problem present for many years – 50’s & 60’s. Cargoes most at risk – Ore fines and mineral concentrates. Moisture content. Wet at shipment. Ingress water into holds.During Ocean Transport cargoes exposed to

1. Engine Vibration2. Ship Motion & Wave Impact

Compaction of cargo from 1&2 causes water pressure inside cargo to force particles of cargo apart.Final effect of process is transition from solid

state to viscous fluid state.

“VESSEL’S LOST OCTOBER TO DECEMBER 2010”“Jian Fu Star” 45000T Bulk Carrier. Built

1983. Sank 27 October 2010 – 13 Lost.“Nasco Diamond” 56000T Bulk Carrier Built 2009. Sank 10 November 2010 – 21 Lost. “Hong Wei” 50000T Bulk Carrier Built 2001. Sank 3 December 2010 – 10 Lost.

All Three VesselsCarried same Cargo – Nickel OreLoaded in same Country-IndonesiaChinese operated and mannedPanama FlagSank in relatively same location

“VESSEL LOST DECEMBER 2011” “VINALINES QUEEN” 56000T Bulk Carrier built 2005.

Sank 25 December 2001 – 22 Lost.

Vessel sank Off Northern Luzon.

At 0548 hrs 25 December 2011 Master reported a 20 ̊ list to port.

At approx. 0650 hrs Master reported list reduced to 18 ̊.

No further contact from vessel after 0700 hrs.

Oil slicks seen but vessel never found.

Sole survivor recovered from Sea 5 days later.

“VESSEL LOST MID AUGUST 2013”

“TRANS SUMMER” 57000T DWT Bulk carrier built 2012.

Capsized whilst lying at anchor South West of Hong Kong.

Vessel sheltering from typhoon utor.

Vessel had loaded full cargo of Nickel Ore in Philippines.

All crew rescued by helicopter from Hong Kong.

Vessel total loss.

“IT’S NOT JUST NICKEL ORE” “Vinalines Mighty” 22,500T geared bulker built

2007 + On 10 September 2009 forced to return Paradip, India after loading full cargo Iron Ore Fines. + Developed list whilst underway.

“Black Rose” - Bulk Carrier + Capsized in Paradip Harbour after loading Iron Ore Cargo that had been in Terminal through Monsoon Rains.

Asia Forest - Bulk Carrier + In 2009 loaded Iron Ore fines in Mangalore, India lost at sea after liquefaction of cargo.

“Solonge P” - Tween Decker - 5 holds + Cargo of Copper concentrates liquifies holds 2 & 3 onpassage Chile to Japan 1984.

“WHAT IS BEING DONE ABOUT LOSSES”

Gard

Gard Loss Prevention Circular No. 10-07 Loading of Iron Ore Fines in India.

Gard News February/April 2010 – Extensive article on Liquefaction of unprocessed Iron Ore Fines & Nickel Ore.

Gard Loss Prevention Circular No. 06-11 Cargo Liquefaction problems – Sinter feed from Brazil.

Gard News February/April 2012 Cargo Liquefaction – an update

INTERNATIONAL GROUP CIRCULAR SAFE CARRIAGE ON NICKEL ORE CARGOES – INDONESIA & THE PHILIPPINES

PRESENTED AT MEETING IN PHILIPPINESSpecific concerns related to loading and carriage of Nickel Ore.Remote location of Mines – Mines not accessible by Surveyors.Previously shipped in Dry Season February – May/June.Lack of independent laboratories in Indonesia & The

Philippines.Cargo variance from individual Mine sites.Stockpiles/cargo subject to rainfall after samples drawn.Surveyors & Masters pressurised to accept shippers test

results.Vessel boarded by armed representatives of shipper. Crew

threatened.

INTERNATIONAL MARITIME SOLID BULK CARGOES CODE (I.M.S.B.C. CODE)

The Primary aim of the code which adopted 4 December 2008 is to facilitate the safe stowage & carriage of solid bulk cargoes by providing information on the dangers associated with the shipment of certain types of solid bulk cargoes. Section 3 - Safety of personnel & ship. Section 4 - Assessment of acceptability of

consignments for safe shipment. 4.2 - Provision of information re-documentation from Shipper. Certs of moisture content & TML. 4.4 - Sampling procedures. Section 6 Methods of determining the angle of

response. Section 7 - Cargoes that may liquefy. Section 8 - Test procedures for cargoes that may

liquefy.

“NASCO DIAMOND” (Built 2009) arrived Kolondale, Indonesia October 2010 to load 55000 Tonne cargo of Nickel Ore.

Loading from barges in Anchorage. Master writes to Shipper 2 November. Vessel sails 4 November bound for China. At 1111 hrs 9 November Master advised Owner, vessel listed 3º

with 60 cm slurry in several holds. At 2040 hrs 9 November calls to ship from Owners not answered. Vessel sank without time to send out emergency distress signal. 3 crew rescued & 2 bodies recovered 21 crew died.

As reported in Tradewinds dated 14 June 2013“Shipper’s tender specifies that owner forgoes

testing” Malaysian Iron Ore Fines Shipper

Contract of carriage requires Owner to carry cargo without transportable moisture limit (TML) Test to be done on cargo.

“WHAT ACTIONS CAN VESSEL TAKE”

Section 4 of IMSBC Code sets out obligations of the Shipper to provide information about the cargo. Master must receive documentation from Shipper

prior commencing load. Documentation to include:-a) Certificate/Declaration of moisture content of cargo.b) Certificate giving TML of cargo. Loading not commence till receipt of documentation. Master or his representative to monitor loading

operation from start to finish. The Can Test Observe and sample cargo on barges.

CONSEQUENCESLoss of Life

Loss of Ship

Loss of Cargo

MANAGING DIRECTOR: CAPT BRUCE MORRIS

20 HARBOUR DRIVE PSA VISTA BUILDING#07-01/#07-01ASINGAPORE 11761224 HOUR: +65 6775 2256Telephone: +65 6775 0985Fax: +65 6775 9135Email: nortas@nortas.com.sg morrismarine@nortas.com.sg