Know Your Cargo-1 (Alumina)

Alumina

Author's Note: In my career as an underwriter and adjuster, I kept notes of my experience with various cargoes including information gathered from various sources on different dates (and hence not always current). While I cannot always  guarantee accurancy of the information, these notes hopefully would inspire the underwriters to make further enquiries from their customers before writing the risk. Your comments and feedback would enable me to refine and edit these notes. Do share your experience!

Bauxite is an ore but Alumina is an intermediate product (refined). Both are relatively easy to carry and do not shift. The moisture ranges between 0 to 10%. Mainly shipped from Australia-Bauxite is more internally traded in Australia but Alumina is exported.

Exported from the ports of Kwinana which is the outer port, Freemantle being the main port and Banberry in Western Australia.  Here the quantity is determined not on shore scale but on the basis of draught survey which is reliable in fair weather if properly done by an experienced surveyor.

Dry Weight versus Wet Weight

Alumina can be exported either as dry alumina or wet  alumina. If wet, water is sprayed but sale contract should normally be on the basis of dry weights so that any water in the bilges and pumped out do not enter the shortage calculation. Wet Alumina is sold, in other words, on dry weight basis. Insurers should be aware of this.

Risk of Shortage

Like in the case of any bulk cargoes, a deductible is a must-0.50% to 0.75% depending on the port of loading and/or discharge. Use of vacuators is fine but some ports use gantry crane and estimated to lose 2 to 3% of cargo due to blowing everywhere. A draught survey at both ends by a reputed firm of surveyor is a must as in the case of any other bulk cargo.

Risk of contamination

Alumina requires the hold to be washed and dried and as it is sensitive to contamination from residues of previous cargoes, rust (loose/hard rust, flakes etc)   which is not always easy to remove. All exporters generally arrange hold washing and drying.

It is important fo find out what agreements have been reached between the buyer and the seller regarding rust etc  Some contracts say “no rust whatsoever.”

 Usually shippers/charterers arrange surveys (survey of the holds, cargo loadiing, draught reading etc) and in Australia, the quality of surveys and controls are very good. This also means that the assured would resist another surveyor to be appointed at the request of cargo insurers.  

Cleanliness is required  upto grain standard. It is believed that there have been huge claims in USA( which accounts for 70% of Alumina imports) due to contamination of alumina.

Effect of Water (fresh/rain or sea) on Aluimina

There are several grades of Alumina exported. Some experts say, depending on the grade involved, sea water may  change the chemical composition of the product. However generally speaking Alumina does not appear to be sensitive to water (in fact alumina is loaded during rains though the charterer would obtain a guarantee certificate against claim for wet damage at disport.)

I had occasion to consult a Chemist in London regarding the effect of water (salt or fresh) on Metallurgical Grade Calcined Sandy Alumina used by Aluminium smelters. The response received was :

“In theory alumina, aluminium oxide is chemically inert and insoluble in water.  This sort of data is available from any standard MSDS. However if you go a bit deeper, then you start to find papers on the hydration of aluminium oxide and research items demonstrating surface reactions involving water and aluminium oxide (Science.Vol.282.No5387, 0 October 1998). I've looked further into this and regret that there is not much info available.  My previous comments stand, it is described as unreactive but I think that it can be hydrated and that's about all."

 What does happen in case of wet damage to alumina is  that the wetted material dries into a cake which might then need further processing.  Certainly wet alumina is described as a difficult material to handle.  Particles in suspension are very small.

Since the only people who really know the answer to this are the users such as Aluminium Metal producers, a leading manufacturer was contacted. Their reply was

“ We need alumina which have a maximum of 0.8% moisture for the process to get best results  -  they  engage a contractor for drying and crushing the lumps. There would not be any  chemical effect on the material but handling of lumps (i.e not free flowing) including  loading/unloading from railway wagons becomes difficult and with greater moisture would have process related problems especially in the pot due to temperature variations/ moisture.” 

Often in the case of bulk cargoes, small quantities of dried cargo is mixed with larger quantity of sound cargo as a mechanism to mitigate the loss