Anglo American renews shipping contract with Vuka Marine

JOHANNESBURG (miningweekly.com) – Global miner Anglo American has renewed its various full-time ocean freight contracts with local maritime company Vuka Marine.

Under these freight contracts, Anglo American will transport bulk iron-ore and coal products, primarily from the Saldanha Bay port to its customers around the world.

“A vast majority of the cargo that is loaded on Vuka Marine’s two capesize bulkers, the Cape Enterprise and the Cape Orchid, are loaded at Saldanha,” said Anglo American marketing CEO Peter Whitcutt in an interview with Mining Weekly Online.

The contracts will “really invigorate” the maritime industry in South Africa – “something that is needed”, he said, adding that it was encouraging to see merchant ships being put back on the South African register for the “first time in many years”.

In 2015, the Cape Orchid became the first merchant vessel to be brought onto the South African register in 30 years.

Meanwhile, Whitcutt said it was also encouraging to see employment in the maritime industry picking up. Signalling a clear commitment to youth empowerment, Vuka Marine has committed to deploying and training 25 local cadets on these vessels.

“It’s a path of employment that has really kind of disappeared in recent times, so we’ll be able to reinvigorate that, which is an added bonus. This can now be repeated on-board while also creating employment opportunities onshore,” said Whitcutt.

The Anglo American Vuka Marine partnership currently accounts for about $30-million of the mining company’s yearly freight spend, with Whitcutt highlighting that Anglo American ships around 60-million tonnes of cargo a year on about 400 to 450 voyages on a fleet of 15 contracted ships.

In a two-month shipping cycle, the Cape Enterprise and the Cape Orchid transport around 170 000 t to 175 000 t of cargo, respectively. This equates to a little over a million tonnes a year.

As the Cape Orchid’s first customer in 2015, and through chartering other South African flagged ships, Anglo American is committed to contributing towards the revival of the country’s presence in the global maritime economy, a sector in which South Africa’s participation had been declining for many years.

Vuka Marine chairperson Andrew Mthembu explained that, during the first two years of their contract, the Cape Enterprise was on full-time charter by Anglo, while the Cape Orchid was operated by Vuka, with support from Anglo. “Under the new arrangement, these ships are chartered to Anglo American.”

Mthembu added that the oceans economy remained an untapped sector for economic growth in South Africa. “We are proud of what we’ve been able to achieve through our partnership with Anglo American and look forward to delivering more value through this partnership.

“We are very happy with what we achieved over the last 30 months, operating in a difficult market,” said Mthembu, highlighting that the company was investigating the possibility of adding more ships to its fleet.

Whitcutt added that the partnership with Vuka Marine has contributed to Anglo American’s competitiveness.

“We are in a very competitive international environment, and we must manage our costs and commercial terms to ensure we remain competitive. By chartering South African-registered vessels, we are creating real value, over and above commercial returns.”

Using ships such as the Cape Orchid and Cape Enterprise enables Anglo American to take advantage of the competitive structure that exists for vessels entering the country under the South African registry. The direct effect of attracting more ships into the South African registry includes tangible job growth and development in the local maritime economy.