News 18 Apr, 2017

Philippines – Continuing Problems with Nickel Ore Cargoes

Further to the News Article dated 21 July 2015, the Club’s local correspondent Pandiman Philippines Inc have advised that nickel ore cargoes currently being presented for shipment are giving rise to concern because of  the following factors:

  • Rain is continuing to fall, with no dry season apparent in recent years.
  • Where they exist, stock piles are exposed to the elements. Many mines have no stock piles and ore is supplied directly from the exposed mine pit, hence there is no drying nor drainage of the cargo prior to shipment.
  • On 2 February 2017, the Philippines Department of Environment and Natural Resources (DENR) ordered the closure of twenty-three mines and suspended operations at a further five mines. Hence mines are keen to ship as much ore as possible. The market has seen some “panic buying”.
  • Certification of transportable moisture limit (“TML”) and moisture content issued by the mines cannot be relied upon. In recent cases where independent analysis has been made, all were found with moisture levels in excess of TML. Differences of 8-10% for moisture content and 5% for flow moisture point (“FMP”) have been found between independent analysis and mine-supplied certification.
  • Where a precautionary survey has been arranged, many barges are being rejected due to field tests - including the can test as set out in IMSBC Code section 8.4 - indicating that cargo as suspect (though it should be noted that such field tests can only be considered as indicative and final determination needs independent laboratory analysis). As a consequence, the loading becomes overly extended with periods of up to forty five days having been recorded, giving rise to charter party disputes in some instances. 
  • Although there is the statutory requirement clearly set out in IMSBC Code paragraph 4.4.3 for access to stockpiles (“For a concentrate or other cargo which may liquefy, the shipper shall facilitate access to stockpiles for the purpose of inspection, sampling and subsequent testing by the ship's nominated representative”), it is frequently the case that such access is not given by the mine. In some instances, the Charter Party has a term where access is prohibited, contrary to this statutory obligation.

Given the above Members are reminded that in accordance with the Club’s bye-laws, they must consider Notice to Members No 14 2013/2014 and notify the Managers before agreeing to carry a cargo of nickel ore to ensure that (i) they are fully acquainted with the risks beforehand, (ii) any concerns regarding the contractual terms of carriage may be addressed and, (iii) a surveyor can be appointed at the load port to provide assistance to the Master. Failure to fulfil these requirements may prejudice cover.

In addition to the notification requirements set out above, Members planning to load nickel ore in the Philippines are advised to consider making arrangements for cargo samples to be tested by an independent laboratory prior to loading irrespective of the cargo declaration and test certificates provided by the shippers.

Members requiring further guidance should contact the Loss Prevention department