Siba Ships and Seaarland back $300m Green Recycling Initiative

Italy-based Siba Ships and Netherlands-based Seaarland Shipping Management have been named as the inaugural investors in a $300m Green Recycling Initiative which aims to integrate the needs of shipowners to recycle ships in a more environmentally friendly manner and the needs of steel producers to be able to produce ethically sourced steel.

The Green Recycling Initiative (GRI) will seek up to 150 investors from the shipowning and steelmaking industries, and establish a fund to buy around 120 bulk carriers during 2009/10. It will begin recycling these at established environmentally friendly ship recycling yards run by the International Ship Recycling Association while it builds its own recycling facility.

Mauro Balzarini, chairman of Siba Ships, says, "Good shipowners 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 Green Recycling Initiative is an opportunity for shipowners and steel makers to join a sound, clean, green and long term business which will make shipping and steel making more environmentally friendly, and also produce good returns for those quick enough to see the opportunities."

Antonio Zacchello, managing director of Seaarland, says, "We are committed to running an environmentally sound shipping business, and clearly the way we recycle ships has to be part of that. GRI is a very useful vehicle which will ensure ships are recycled in an ethical and clean way and we are proud to be founding investors in the business."

Brett Salt, managing director of GRI, says, "We have identified a number of owners and a number of steel mills who share our high environmental standards and who want to be able to demonstrate traceability in the recycling of ships and the sourcing of scrap for new steelmaking. We are offering them the opportunity to invest in the business, and to 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. We shall be signing base load contracts for scrap supply with several EAF steel mills in Asia in the near future and be sourcing tonnage to meet that demand. And we are actively studying potential sites for recycling yards which will be able to provide a safe haven for laid up ships while waiting recycling, and also be designed from scratch to provide clean, cost-effective recycling using properly trained and protected workers."

The Green Recycling Initiative is a Singapore-based company specifically formed to buy and recycle ships and to trade steel scrap on a global basis. It is run by Pearl Minerals and Metals Ltd, an Australia-based minerals fund. www.gri.com.sg