Singapore – Italy-based Siba Ships and Seaarland Shipping Management of the Netherlands are the inaugural investors in the US$ 300 million Green Recycling Initiative (GRI) which aims to integrate ‘the needs of ship owners to recycle ships in a more environmentally-friendly manner and the needs of steel producers to be able to produce ethically-sourced steel’. Run by Pearl Minerals and Metals Ltd of Australia, the GRI is a Singapore-based company specifically formed to buy and recycle ships and to trade steel scrap on a global basis. It will seek up to 150 investors from the ship-owning and steelmaking industries, and establish a fund to buy around 120 bulk carriers during 2009 and 2010. These will be recycled at established, environmentally-friendly yards until the GRI opens its own recycling facility.
Mauro Balzarini, Chairman of Siba Ships, comments: ‘Good ship owners want to recycle their ships ethically, and good steelmakers want to use ethically-produced scrap. IMO has introduced the International Convention for the Safe and Environmentally Sound Recycling of Ships, which in time will put an end to beach scrapping. The bulk carrier market in particular now is ripe for major scrapping, and when the world economy gets moving again demand for steel will take off quickly. So we have a historic opportunity where the market, public concerns and regulatory change are all working together.’
The GRI is an opportunity for ship owners and steelmakers to join a long-term business which will make shipping and steelmaking more environmentally friendly while also producing ‘good returns for those quick enough to see the opportunities’, he goes on to say.
According to Antonio Zacchello, Managing Director of Seaarland, the GRI is ‘a very useful vehicle which will ensure ships are recycled in an ethical and clean way’.
The GRI’s Managing Director Brett Salt says his company has identified a number of ship owners and steel mills which value high environmental standards and which want to be able to demonstrate traceability in the recycling of ships and the sourcing of scrap for steelmaking. ‘We are offering them the opportunity to invest in the business and so generate a return while owners can see their vessels complying with Green Passport requirements right to the point of recycling, and steelmakers can have an auditable Green Passport for their steel,’ he notes.
In the near future, says Mr Salt, the GRI will be signing base load contracts for scrap supply with several electric arc furnace mills in Asia and will be sourcing tonnage to meet that demand. And he adds: ‘We are actively studying potential sites for recycling yards which will be able to provide a safe haven for laid-up ships while awaiting recycling, and also be designed from scratch to provide clean, cost-effective recycling using properly trained and protected workers.’