http://www.canadianminingjournal.com/
Richard Desgagnes is a Senior Partner and Andrew Godfrey is an Associate with Norton Rose Fulbright.
Shipping history was recently made in Canada when Fednav’s MV Nunavik sailed from Deception Bay, Quebec to Bayuquan, China via Canada’s Northwest Passage.
The ship carried 24,000 tons of nickel concentrate and became the first commercial vessel to transit the Northwest Passage westward, unescorted, with an Arctic cargo and with Canadian expertise. In doing so the transit time was reduced by about 18 days (or about 5,800 miles) than had it been routed through the Panama Canal.
This and other developments are opening new frontiers of coastal mining transportation in Canada. Wherever a mining project is located, however, there are some key issues that have to be addressed when looking at maritime transportation.
FLAG CONSIDERATION: If the transportation needs are purely domestic (from one point in Canada to another), due to coasting trade restrictions, the vessel must be Canadian flagged and manned by Canadian seafarers. As such, manning costs are much higher compared to some other foreign flag operations. For carriage to a destination outside of Canada however, there is no restriction on the nationality of the vessel or the crew used on-board. All vessels are regulated by the standards of the IMO (International Maritime Organization).
HIGH DEGREE OF EXPERTISE REQUIRED: No matter what flag the vessel is flying, it is of the utmost importance that the ship operator has the required degree of expertise to operate in the waters where the project is located. Experience is the key. Take for instance the Arctic. As the number of new opportunities grow in the region, so too does the interest among ship operators.
Not all ship operators have the same degree of experience, however. Even in the best circumstances, the Arctic will remain one of the most challenging environments to operate a vessel in. Thus, choosing a ship operator with a proven track record is very important.
ASSUMPTION OF RISKS: Even with experienced operators, a given voyage may provide its fair share of events that will contribute to delay or increased costs. Who assumes the consequences of these events will depend on the contractual form used by the parties. Some contracts provide for the payment for the daily use of the vessel (the hire). In this case, delay will usually be assumed by the shipper.
Other contracts provide for a rate per ton carried (the freight), in which the risks associated with the delay will usually be assumed by the carrier.
For the rest of this article, click here: http://www.canadianminingjournal.com/news/canadian-ore-carrier-makes-historic-journey-to-china-via-northwest-passage/1003429134/