By Mark Cardwell

To hear Pierre Gagnon tell it, the port of Sept-Îles has been the main gateway of Canadian iron ore with well over 2 billion tonnes of iron ore shipped throughout the world for the past 60 years. And he says the facility’s new multi-user wharf, which will be the largest in North America and one of the Top Ten wharfs in the world in terms of capacity when it begins operating late this fall, will ensure that pre-eminence for the next century.

“It’s impossible to overstate the importance of (the new wharf) for the future of our facility,” said Gagnon, the Port Authority’s President and CEO. “It will help us to expand volume in the world market (and) compete internationally with top iron-ore countries like Brazil and Australia.”

To be sure, the new wharf is a construction project of mammoth proportions. The biggest construction project in the history of the port of Sept-Îles and the largest current project in a Canadian port, the new 400-metre-long wharf features a 560-metre-long trestle, two shiploaders with a capacity of 8,000 tonnes per hour (expandable to 10,000 tph), and more than 2,000 metres of ore conveyors powered by energy efficient soft-start engines and housed in closed galleries that are designed to reduce noise and dust.

Since work began in 2012, nearly 5,300 linear metres of steel pilings have been installed that, placed end to end, would be as long as 444 school buses. Similarly, the new wharf contains 22,200 cubic metres of concrete – enough to fill eight Olympic-size swimming pools.

In addition to the new wharf, which will be the 9th owned and operated by the Port, a large kelp forest will be created to enhance the marine habitat in the 45-square-km natural harbour of Sept-Îles, which is named for the seven-island archipelago that fronts it on the North Shore of the St. Lawrence River, 640 kms east of Québec.

According to Gagnon, the $220-million infrastructure is now “98 per cent complete. We’re only missing the fenders and the two shiploaders.” He said work on the wharf will be completed this month (August). The shiploaders, which are being built in a Chinese shipyard and will be delivered by specialized big-lift ships, will be unloaded with large gantry cranes and installed later in the fall. That large-scale unloading operation, he added, might be filmed by Discovery Channel Canada, Mighty Ships.

Once functional, the new wharf will be able to accommodate two ships at a time, including Chinamax ships, which can carry 350,000 tonnes. It will also have a maximum loading capacity of 8,000 tonnes an hour, and over 50 MT annually. That will more than double the port’s current annual shipping capacity of 40-45 MT. Nearly all of that material is mined from the iron ore-rich Labrador Trough and shipped south by rail to the port, 600 kms to the south.

Most of the new capacity – 43 MT – is being shared by the five iron ore mining companies that together ponied up 50 per cent of the capital spending costs for the new wharf – or $110 million – based on the tonnage they expect to ship. The federal government provided 25 per cent of the cost – or $55 million – and the port the remaining monies. The five companies (and their reserved tonnages) are Tata Steel Minerals Canada and Labrador Iron Mines (5 MT each), Alderon Iron Ore (8 MT), Champion Iron (10 MT), and New Millennium Iron (15 MT). Gagnon said the companies have the option to use the remaining 7 MT of tonnage capacity according to the same cost-sharing formula. “Or we can find a newcomer,” he noted.

Financing of the facility was concluded in a very innovative fashion which shared the risk of development with the mining companies that will be using the facilities. Pursuant to Agreements signed in 2012, the mining companies “reserved” shipping capacities as above, and agreed to pay a total of $110 million during the next two years of construction as advances against future wharfage and other fees, on a pro rata basis to “reserved shipping capacity”.

To be sure, it will take a while before ore from any new mine will be shipped from the multi-user wharf facility. Alderon is well-advanced in its $1.3 billion, 8 million tonne/yr capacity Kami project, and is in the final stages of securing financing. Tata Steel Minerals Canada and New Millenium Iron are currently mining and shipping ore from another Port terminal, but are making plans to exploit other deposits to increase output and utilize the multi-user wharf. On the other hand, Labrador Iron has suspended operations for 2014, and its plans for 2015 are uncertain. Champion Iron Mines has recently reorganized and recapitalized under provisions of an Arrangement Agreement, and is embroiled in a legal dispute with the Port following Champion’s unilateral cancellation of its Agreement to participate in the multi-user wharf.

The Port, he added, will assume the annual operating and maintenance cost of the new wharf. Though he refused to divulge the expected amount of those costs, Gagnon said they will likely be more than covered by the anticipated port fees.

Gagnon notably credited the federal government for helping to get the new world-class infrastructure built. “They were the catalyst that got the private partners involved when we first started promoting the idea way back in 2006,” he said.  “They understood the synergy that was required to support the project (and) send a signal of support for all the new mines.” It has been a real boon for construction firms and local workers, who represented 70 per cent of the workforce on the new wharf,” Gagnon said.

The new infrastructure, he added, is unique in that the users are sharing the risk of investment. Gagnon said that is a big and positive change from the traditional model in which large iron-ore miners like IOC spent “astronomical amounts of money” to build whole towns, processing facilities, and shipping networks – including rail lines and ports near or right on top of mines.

At the same time, the new wharf meets the growing needs of both the port and its newest iron-ore partners. Rio Tinto-IOC, for example, owns a private dock on the north side of the bay of Sept-Îles, and charges premium rates to other companies that ship from there. Similarly, the two docking wharves at the port’s Pointe Noire terminal have a maximum depth of only 16 metres, meaning large cape size vessels over 150,000 tonnes can’t dock there. As a result, the terminal’s lone user – Cliffs Natural Resources – has to pay for smaller self-unloading vessels to shuttle material to large ships anchored in the bay, adding to its operating costs.

For its part, ArcellorMittal owns both the port at Port Cartier, 65-km south of Sept-Îles, and the railway that runs there from the Labrador Trough, and doesn’t allow other companies to use either of those infrastructures.

“We definitely need (the new multi-user wharf),” Ian Chadsey, Vancouver-based Alderon’s head of investor relations, said recently. “The existing port is really set up for the lakers that go up to the Great Lakes. What we’re talking about is Capesize vessels that will take iron ore out to China.”