Four of the world’s top five mining companies look set to lock away more than 40 Chinese shipyard berths for LNG-fuelled newcastlemax and capesize bulkers.
The newbuildings are worth almost $2.8bn in total.
Australia’s BHP, Fortescue Metals Group (FMG) and Rio Tinto have opted for 210,000-dwt newcastlemaxes, with UK-headquartered Anglo American choosing 190,000-dwt capesizes.
All are fitted with ME-GI propulsion systems that will mainly use LNG on their largely fixed-route voyages shipping iron ore.
The wave of orders prompted one newbuilding broker to describe the mining quartet as the “standard bearers for dual-fuel bulkers”.
Securing bunkers
Industry observers said that by ordering a dual-fuel fleet, the companies are better able to lock in improved economics on their LNG bunker volumes.
LNG bunker suppliers said these early movers are expected to hook up with energy major suppliers — as BHP has done with Shell — on fuel for these first-generation newbuildings.
One said that energy industry giants are likely to be offering attractive deals as they seek to extend their LNG bunkering portfolios, and signing with a large outfit gives the charterer security of supply.
“You don’t get fired for hiring Shell,” one commented.
Using LNG as a marine fuel will also allow the mining giants to log expected CO2 emissions reductions of up to 30% per voyage from their vessels. This will propel them towards meeting their carbon-reduction targets, while helping customers achieve their own emissions goals.
First mover
Last year, BHP specified a 40% emissions reduction target for its ship chartering operations.
The company was already off the blocks in the newbuilding stakes, booking five Chinese-built LNG-fuelled bulkers from Eastern Pacific Shipping in 2020 and signing up with Shell to supply bunkers in Singapore.
Anglo American followed, pursuing its newbuilding plans under the tag Project Ambition. The company has taken four newbuildings ordered by U-Ming Marine Transport on 10-year charters.
In January, TradeWinds reported that FMG is tendering for shipowners to provide up to 10 newbuildings to ship iron ore to Asia, mirroring BHP’s move with plans for five 209,000-dwt ships and options for a similar number of additional vessels.
Following on is Rio Tinto with an expected swathe of up to 12 newbuildings that have yet to be confirmed at two selected Chinese shipyards.
