South Africa wants to set up a new shipbreaking yard to capitalise on the growing demand for green recycling.
The 34South facility at Saldanha Bay in the Western Cape will be supported by the Industrial Development Corp as its largest shareholder, according to domestic consultancy Frost & Sullivan.
Consulting analyst Yaa Agyare-Dwomoh said: "Growing environmental and labour concerns in the global shipbreaking industry present a desperate need for green-compliant ship recycling facilities."
The plant could provide an alternative to South Asian breakers, where 90% of obsolete tonnage ends up, but where serious environmental concerns remain.
"With a combination of changing environmental legislation and increased stakeholder pressure, green-compliant facilities that offer competitive vessel purchase prices are gaining increased prominence in the global shipbreaking industry," Agyare-Dwomoh said.
The planned facility will be set up in the Saldanha Bay Industrial Development Zone. No timescale has been given for the work.
The yard will use a ship lifting system, which it said ensures that vessels are decommissioned in an environmentally safe manner compared with the beaching method used in South Asia.
Economies of scale
"The ship lifting system will support a common user philosophy and can create economies of scale by accommodating more than one vessel at a time," Agyare-Dwomoh said.
"The demolition of ships is a hazardous and labour-intensive process. It can present great risks to the maritime environment and to the labour rights of its employees if the vessel is not recycled in a safe and sustainable manner."
UK broker SSY said this week that tanker scrapping levels are at 30-year lows, while Clarksons Research said the proportion of newbuildings on order compared with the operational fleet is at its lowest point since 1989.
But Norwegian investment bank Clarksons Platou Securities said it sees a rise in scrapping levels as decarbonisation regulations make older ships even more uneconomical.
