By Mark Cardwell
The big news from Port of Sept-Iles in 2015 is the completion of its $220-million multi-user wharf. The new facility has a shipping capacity of more than 50 million metric tonnes of iron ore, which more than doubles the port’s present capacity of 40-45 million tonnes.
Despite a collapse in the price of iron ore on world markets since 2012, when the construction project was first announced and iron ore was trading at around $180 a tonne, the wharf enhances Sept-Iles’ preeminence as North America’s leading iron ore port with an annual handling volume of nearly 30 tonnes.
“It is a huge boost to our facility,” said Pierre Gagnon, the port’s longtime President and CEO. “It was designed to be a highly efficient and environmentally friendly world-class facility, (and) was built with the best materials and equipment on the market.”
Funded by the federal government and Sept Iles Port Authority to the tune of $55 million apiece, plus $110 million from a consortium of five iron ore mining companies – Alderon Iron Ore, Champion Iron Mines, Labrador Iron Mines, New Millennium Iron, and Tata Steel Minerals Canada – that have agreed to share the use of the facility, the new terminal features a 560-metre-long concrete trestle on steel pilings and a 425-metre-long berthing site that is able to accommodate two ships at a time. The new wharf also features conveyors that are powered by energy efficient soft-start engines, as well as housed-in closed galleries that are designed to reduce noise and dust. The loaders and conveyors are also configured so that material can be loaded onto ships on both sides of the wharf, in slip numbers 35 and 36.
The final pieces in what was the biggest marine construction project in Canada when it was announced in 2012 –- two giant shiploaders, the first to be delivered to Quebec’s rugged North Shore region in 50 years, each with a capacity of 8,000 tons an hour –- arrived in Sept-Iles in the middle of February after a 43-day voyage from China via the Panama Canal on board MV Happy Star, one of the world’s leading oversized cargo carriers. The canal segment of the 10,000-km-plus journey was filmed by Discovery Channel for its Mighty Ships show.
Unloaded along with conveyor belts and other equipment over 17 days, the machines were then assembled and installed on the new multi-user dock, and were cold-commissioned this spring.
Slower demand growth, and increasing overproduction by low-cost global miners BHP Billiton, Rio Tinto and Vale are making it tougher for anyone with existing mines to participate in the seaborne market for iron ore, and produce positive cash flow. In this environment, it is not surprising that investors do not have an appetite to fund new mining ventures whose investment requirements are typically measured in billions of dollars. Notwithstanding, Gagnon is upbeat about future development of the Labrador Trough, aided by the high quality and purity iron ore that is mined in the trough and which presents a competitive advantage for Canadian iron ore producers and also once sanity returns among global producers to end the present war for market share and resulting cut-throat commodity pricing. At that point Gagnon believes that the increased shipping capacity from the new wharf will help the port to expand shipping volumes.
He noted that Canada produces about 40 million tonnes of iron ore annually, and most of that material – “99 per cent of it,” he said – is mined from the iron ore-rich Labrador Trough.
Though Canada’s output pales in comparison to the 700 million tonnes of iron ore that world-leader Australia exports annually, Gagnon shares the thinking of industry stakeholders and financial analysts who see Canada doubling production to 100 million tonnes when iron ore markets return. “We likely won’t see prices of $180/tonne again for quite a while. But the long term outlook is solid, and the new wharf is all about looking ahead and preparing for the future. Producers now have another competitive advantage with this high-capacity, cost-efficient loading facility ready to use and to reduce considerably their shipping cost with the use of larger bulk carriers such as Chinamax class vessels.”