Thermite is pretty old stuff. Rust, of course, is iron. I’m surprised a metal detector wouldn’t spot it. A bag of aluminum powder would be tough to conceal, I would think.
There are no extinguishers for class D fires (burning metals). The solution to a burning helicopter on deck was to clear it of people and then push it off the flight deck.
I could stand there and watch it burn until you lost sight of it as it sank.
Thermite welding... still used today. The rust is magnetite not hematite.
Perhaps you are thinking of magnesium?
Thermite is exothrmic welding agent....we use it all the time in the trades...under the trade name CADWELD
It would never burn long enough to burn through a ship hull...the reaction only takes a few seconds.
I doubt the report is true.