KARACHI: Police say an explosion at a ship breaking yard in the country's southwest has killed at least seven labourers and wounded dozens of others.

Police official Mohammad Abdullah says an oil tank exploded on Tuesday while workers were dismantling an old ship, which then caught fire.

He says initial reports indicate dozens of labourers remain trapped after the blast in the coastal town of Gadani. He says several workers jumped overboard into the sea as the fire raged.

Abdullah says rescuers are transporting the casualties to a hospital in Karachi, the capital of southern Sindh province.

Gadani is one of the world's largest ship breaking yards and was established in the 1970s.

Labourers are often injured while breaking ships there, mainly due to poor safety measures.