Coal Age

FEB 2013

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transport tips continued Figure 2: Self-unloading Lakers Pass in Great Lakes System. Coal loaded into the holds drops onto a wide belt running the entire length of the ship, feeding a belted boom near the ship���s stern. The boom can direct the coal stream anywhere on-shore. barge Presque Isle, there are 14 of the 1,000footers owned by three companies: American Steamship Co. (6), CN Rails��� Great Lakes Fleet (5), and Interlake Steamship Co. (3). A vessel���s draft is another obstacle to passage on the seaway, particularly in connecting waterways such as the St. Lawrence River. The depth in the channels of the Seaway is 41 ft downstream of Quebec City, 35 ft between Quebec City and Deschaillons, 37 ft to Montreal, and 27 ft upstream of Montreal. Channel depths and limited lock sizes mean that only 10% of ocean-going ships can traverse the entire seaway. Lower water levels in the Great Lakes have also posed problems in recent years. The lake giants shown in Figure 2 can travel the entire 1,600 miles from the west end of Lake Superior to Ogdensburg, N.Y., but no further. Loaded Panamax vessels and light-loaded Capesize vessels can travel upstream on the St. Lawrence River as far as Quebec City, but no further. Lower St. Lawrence The eastern end of the system is the Gulf of St. Lawrence. As regards to coal and iron ore the Lower St. Lawrence is an economy unto itself. The Port of Quebec City is a hub for inbound iron ore and coal. In the Gulf of St. Lawrence the Ports of Sept Iles, Cartier, and Pointe Noire are deepwater ports for iron ore produced in the Labrador Trough. Major producers in the region are Rio Tinto (IOC), Arcelor Mittal (QCM), and Cliffs/Wuhan (Wabush and Bloom Lake). The mines are connected to the ports by the Cartier Railway and the QNSL (Quebec North Shore Labrador) Railway. These mines produce 99% of Canada���s current iron ore production (35 million mt), and accounted for $3.2 billion of Canada���s output in 2010. Aluminerie Alouette on Quebec���s Lower North Shore is pushing ahead with a $2-billion expansion of February 2013 the facility after clinching a low-cost electricity deal with the province. Much of the Labrador iron ore tonnage is exported to Europe (Rotterdam) and China (Tianjin), taking advantage of the ports��� ability to load Capesize vessels. Of the 27 vessels now sitting on the Sept Iles harbormaster���s schedule, nearly half are ships scheduled for the ore docks: 6 Capesize, 1 Panamax and 5 Handymax. The remaining vessels are mostly cargo vessels plying the ports upriver, but only one can be identified as possibly carrying iron ore into the Lakes. In FY 2012, the three iron ore ports shipped a total of 855,750 tons to Canadian Seaway Ports, roughly 2% of the Labrador production. Canadian mines produce all the iron ore Canada needs, but the obstacles to competitive transportation are great. The river gets progressively shallower upstream from Quebec City, preventing the passage of fully loaded Panamax and larger vessels. There are no connections to the Canadian National or the Canadian Pacific railways, further isolating the region from upstream steel plants on the Lakes. Some Hope on the Horizon��� Shipping PRB Coal to Europe Great Lakes vessels deliver approximately 16 million net tons of western coal annually. This commodity is primarily loaded at Superior Wisconsin, and moves southbound through the Great Lakes. The majority of down-bound western coal is destined for major public utilities. Industrial users consume the remainder. Great Lakes vessels deliver approximately 25 million net tons of eastern coal annually. The majority of this volume loads at ports on the Ohio shore of Lake Erie. Eastern coal moves primarily northbound and is consumed by public utilities, steel plants and other industrial users. One of the few optimistic stories on the Lakes concerns a deal made between MERC (Midwest Energy Resources Co.), Canada Steamship Lines (CSL), and Quebec Stevedoring (QSL). Together they have devised a system for competitively shipping Powder River Basin (PRB) coals 1,100 miles by BNSF rail to Superior Midwest Energy Terminal, then by 28,000 ton vessel to QSL���s Beauport Sector Dock in Quebec City, a water distance of 2,432 miles. At Quebec City, coal is stockpiled for loading much larger deep draft ocean vessels for final delivery to international customers. In 2011, MERC shipped 350,000 mt to customers in Rotterdam and Spain, and they have orders totaling 1,500,000 mt for the 2012-2014 periods. At 25.5 million tons per year, Midwest Energy Terminal is the largest coal terminal on the Lakes; about 20 million tons is consumed by owner Detroit Edison alone. The six-day trip to Quebec City requires passage of all 19 locks on the system, as well as requiring pilots from each of the five pilot districts: Western Great Lakes Pilots Association, Lake Pilots Association, St. Lawrence Seaway Pilots Association, Great Lakes Pilotage Authority (Canadian), and Laurentian Pilotage Authority (Canadian). It is a daunting trip. Dave Gambrel is a transportation consultant to the coal business and writer of the Transportation Tips column in Coal Age. He was formerly the senior transportation executive for Peabody Energy Company. He may be reached at bunkgambrel@earthlink.net. Figure 3: The Port of Sept Iles (seh-teel) in the Gulf of St. Lawrence. Aluminerie Alouette lies on a peninsula across the bay from the city of Sept Iles (foreground). www.coalage.com 23

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