Heat Treat Industry News
March 26, 2008
Unusual Ore Deal Gains City Nod
SAULT STE. MARIE - Another unusual proposal from Algoma Steel may transform the essentially unused Carbide Dock into a money-maker for the city, according to a report from City Manager Spencer Nebel, circulated earlier this week.
According to Nebel, Algoma Steel approached the city about use of the Carbide Dock to temporarily store European iron ore carried upbound to Sault Ste. Marie by saltwater ships. Very unusual in the ore trade, the European ore would apparently be used to feed a second blast furnace Algoma plans to re-start this year.
Algoma Steel normally receives its ore from Cleveland Cliffs mines across Lake Superior in the Marquette area.
In Nebel's report, he said a number of saltwater ships would bring the pelletized and cubed ore to Sault, Mich. for temporary storage at the Carbide Dock - if the proposal becomes a done deal. Since Saltwater ships are not self-unloading vessels as a class, each of the ships would be laboriously unloaded over a period of 2-3 days by crane.
When the need arises, the ore would be reloaded on a Great Lakes self-unloading vessel for the short hop across the St. Marys River to Algoma's Sault, Ont. steel mill.
Very costly from a materials handling standpoint, the break-in-bulk transshipment of industrial materials is almost never attempted in the normal course of the ore trade. Use of European ore is likewise unusual for a Great Lakes steel mill, considering the vast stores of processed iron ore available from Minnesota and Michigan mines nearby.
However, as Nebel explained the proposal, Algoma is considering using the Carbide Dock as a storage location for a six-month period this year. Transshipment to Algoma would be similar to an unusual coal delivery handled in the same manner in January 2005.
Nebel explained in his report that Algoma Steel does not have ready access to a storage dock nearer to its steel mill for its supply of European ore. The reason for use of European ore was not explained in Nebel's report to the City Commission.
Each of many saltwater ships contracted to bring the ore into Sault Ste. Marie would carry about 15,000 tons of iron ore, building up to a full supply of as much as 700,000 to one million tons of ore, according to Carbide Dock manager John Wellington. That much ore landed at the Carbide Dock would involve as many as 50 ship loads of material if the Algoma deal goes through.
Wellington said another fly in the ointment arises when the quantity of stored ore is considered. To handle that much ore, he said cargo initially landed on the city-owned dock would have to be moved back on the Carbide property to accommodate that quantity of iron ore at one time. He estimated that about 100,000 tons of ore, or roughly the same total volume as the 2005 coal delivery, would be stored at the dock at any one time.
Each time bulk industrial materials are moved a substantial cost is incurred that most mills, including Algoma, generally avoid by locating stockpiles adjacent to the mills that consume them.
If the deal goes through, the city stands to net about $315,000 in pier fees from Algoma. That windfall would apparently be diverted into a city fund set aside for Carbide Dock repairs.
Nebel's report indicates certain improvements at the Carbide Dock will be necessary if the Algoma deal becomes reality. A 19-20 foot underwater “ledge” extends out from the dock face itself, severely limiting the available draft of vessels using the dock. Wellington said saltwater vessels expected to bring in the ore will draft at about the St. Lawrence Seaway maximum of 26.5 feet, making dredging along the dock face necessary.
Great Lakes ships used to transship the ore over to the Algoma mill would likewise need the additional draft for efficient loading.
In his report to the City Commission, Nebel said MCM Marine Inc. estimated the cost of dredging the Carbide Dock face at about $30,000 for a cash deal. He held out some hope that MCM may be willing to do the small dredging job at no charge if the city were willing to “swap” use of the Carbide Dock by MCM in exchange for the dredging.
Nebel also reported that shoreside improvements must be made at the city-owned dock to safely accommodate the heavy lift crane equipment needed to unload and load ships efficiently. He did not supply a cost estimate for the shoreside improvements.
If the most unusual project goes through, it will supply work for about six temporary employees at the Carbide Dock through the end of the upcoming shipping season.
In addition to the approximately 50 ship loads of incoming ore that would be involved in the Algoma deal, the same number of vessel loadings would be needed to transship the ore to Great Lakes vessels involved in the shuttle to Algoma's mill site.
That number of vessels calling at the Carbide Dock in a limited shipping season would involve a considerable increase in shipping traffic in and around the Carbide Dock area. Nebel warned the Commission that neighbors may object to the 24-hour loading and unloading activity implicit in the potential arrangement.
On the other hand, he suggested that the cargo movement onto and off the dock may prove to be a kind of tourist attraction for people with maritime interests who may desire to watch the proceedings from the nearby Alford fishing pier.
Though no immediate action was requested of the City Commission, Nebel placed the proposal on the table to gauge reaction to it. Commissioners appeared to be generally favorable to the deal, even though Wellington said it is at a very preliminary discussion stage of development.
Nebel today cautioned that the Carbide Dock option may well be one of several alternatives being evaluated by Algoma Steel and may not come to fruition. He said the Commission authorized him to continue exploratory discussions if the proposal appears to be proceeding onto more solid negotiating ground.
Sault Ste. Marie Evening News - By: JACK STOREY
Story created Mar 19, 2008 - 10:54:45 EDT.
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