HANDLING • TRANSPORT • STORAGE • DISTRIBUTION • PROCESSING SEPTEMBER/OCTOBER 2013

CONTENTS

Liftech Knows Bulk CranesStructural design

Feasibility studies

Condition assessment

Repair procedures

Upgrade designs

Structural health programs

Oakland, CA USA Teresa Ferguson (1) 510-832-5606 tferguson@liftech.net www.liftech.net

NEWSQueensland port plans 2Gottwald for Fospar 3New SA coal terminal 4Oz agribusiness 5Africa port concept 20

GERMANY FOCUSIn the firing line 6

BRAZIL FOCUSProjects re-evaluated 8

WEIGHINGAxle pad systems 12

CARGO HANDLINGStacker/reclaimers 13Driving forces 15

COMMODITY FOCUSBiomass in decline? 17

Mining hopesfor TasmaniaTasmania is looking to boost its depleted economy by implementing new mining projects, if environmental objections can be overcome. The ports of Burnie and Bell Bay, at opposite ends of Tas-mania’s north coast, will be the beneficiaries of proposed developments by Shree Min-erals, Venture Minerals and Hard Rock Coal Mining, which have recently received state government approval.

Indian/Chinese-backed Shree has battled various le-gal moves by Green groups to obtain federal and state licences for its Nelson Bay River Iron project, compris-ing hematite and magnetite deposits near Smithton in Tasmania’s northwest corner. The company proposes to use existing bulk shipping infra-structure at Burnie or Port Latta.

Schramm coal dealBrunsbüttel Ports GmbH, which is part of the Schramm group, has extended its logis-tics service range by assuming responsibility for the supply of raw materials and rehan-dling of outbound disposal materials at the Vattenfall Moorburg-Hamburg power station, which will consume more than 4 Mtpa of hard coal.

Brunsbüttel Ports will un-load the coal from colliers at Moorburg using two gantry grab unloaders and transfer it via conveyors to the daily

bunkers. Disposal materials are gypsum, wet and dry ash and ammonia water, which will be transported by spe-cial vessels and/or trucks. Brunsbüttel Ports is also re-sponsible for stuffing and handling containers with press cake and screenings, as well as continuous monitor-ing of equipment.

“Our service covers the entire supply and disposal logistics chain,” stated Frank Schnabel, managing director of Brunsbüttel Ports GmbH.TasRail will provide Venture

Minerals with dedicated trains on the Melba line and storage/shiploader access at the port of Burnie

Russia’s ICT Group has signed a contract with Com-pany Ust-Luga, the developer of the new Russian Baltic port, to build a 4 Mtpa termi-nal for handling fertilisers and general cargoes at the port.

Under the agreement, ICT will invest around US$140M to build the terminal by 2016, according to ICT spokesman Vladislav Vershinin.

The project, implemented by ICT subsidiary Baltic Fer-tiliser Terminal (BTU), is part of the group’s wider, US$1.6B undertaking to build a nearby fertiliser plant to produce 1.2

Mtpa of carbamide granules and 300,000 tpa of synthetic ammonia using natural gas.

The new production plant will be the first occupant of the 2,542 ha Ust-Luga indus-trial zone, located near the harbour, which will accom-modate mainly hydrocarbon processing facilities, as well as those for producing rein-forced concrete, asphalt con-crete and metal constructions.

As part of a deal with the regional government, the tax rate on profits from the ferti-liser plant will be reduced to 13.5% and the facility will be

Fertiliser terminal for Ust-Lugaexempt from property tax for the duration of the 13-year in-vestment payoff period plus two years. The company said all the investments would be financed with its own and borrowed funds.

ICT has also declared plans to expand its coal exports to

Venture’s most advanced project is its Riley DSO iron ore mine but it is progress-ing its Livingstone DSO and Mt Lindsay tin and tungsten mines, all in the vicinity of Tullah on the island’s West Coast. Riley alone has vol-umes that could triple bulk mineral exports through Burnie, with ores railed to the port via TasRail’s exist-ing network.

TasRail signed a deal with Venture in September to pro-vide dedicated trains on the Melba line plus port stor-age and shiploader access in Burnie. Since Asciano’s Pacific National sold the rail company back to the state government three years ago, TasRail has been renewing track infrastructure and is currently re-equipping with new locos and rolling stock.

Hard Rock’s A$50M Fin-

Tewoo into AfricaChina’s Tianjin Minerals and Equipment Group (Tewoo) is to buy a 10% stake in the Tonkolili iron ore project in Sierra Leone from British firm African Minerals. In ad-dition, Tewoo, will buy a 10% share in African Minerals, giving it an effective 16.5% equity stake in Tonkolili. Te-woo hopes to conclude the US$990M deal by the end of this year. Production on Phase 1 of Tonkolili is to be ramped up to 20 Mtpa but Af-rican Minerals hopes to use the money to fund increases in transport capacity to take Phase 1 handling capacity up to 35 Mtpa. A 200 km railway,

which is open to other users at commercial rates, takes ore to the Port of Pepel.

Shandong Iron & Steel Group has already spent US$1.5B on a 25% stake in Tonkolili, as Beijing has en-couraged Chinese companies to secure direct control over overseas iron ore assets, as part of its wider strategy to promote commodity security. Now that Tewoo has signed a 20-year contract to buy ore from Tonkolili, the executive chairman of African Minerals, Frank Timis, said: “We will have almost all of the Tonko-lili project’s production com-mitted for the next 20 years.”

gal Tier thermal coal project in the Fingal Valley in Tas-mania’s north-east is ex-pected to be fully operational within three years and will produce up to 1 Mtpa, lead-ing to a 40% increase in Tas- Rail’s bulk traffic and 30% growth in export volumes through Bell Bay.

The reception pier at Hamburg-Moorburg

the Asian-Pacific markets through Shakhtersk harbour on the island of Sakhalin. The project envisages upgrading the port’s coal handling ter-minal, increasing steam coal production on the Group’s Sakhalin-based deposits to 5 Mtpa by 2016 and linking the coal field with the shore-side terminal.

The coal mining develop-ment project also provides for geological exploration and subsequent development of hard coal deposits in Russia’s Far Eastern Magadan Region.

ICT is controlled by billion-aire Aleksandr Nesis, whose other investments include stakes in Uralkali and Poly-metal International.

News

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Bauxite is booming in Queensland with Rio Tinto Alcan’s (RTA) A$1.2B South of Embley (SoE) mine and port project overcoming 12 months of regulatory hur-dles and the long-delayed Aurukun project in western Cape York finding new pro-ponents.

RTA’s current bauxite de-posits at Andoon near Weipa on the Gulf of Carpentaria, which produce 26 Mtpa of ore for overseas customers, and the Yarwun refinery at Gladstone are expected to be exhausted by 2020. But com-pany leases cover 3,400 km2 including the SoE deposits, which are expected to yield 50 Mtpa for 40 years.

The SoE project will con-sist of port loading facilities, beneficiation plant, power station and barge, ferry and tug facilities and is expected to take 40 months to build.

Most supporting services will be provided from Weipa, where RTA’s existing post-panamax port first began shipments in 1963.

Meanwhile, the Queens-land Government has short-listed two possible develop-ers for the Aurukun bauxite deposit after previous pro-ponent Cape Alumina failed to lodge a formal proposal by the 13 September dead-line. Proposals were received from Australian Indigenous Resources Pty Ltd and Glen-core International AG. These will be assessed on their en-vironmental merits and how they maximise returns to native title holders, the Au-rukun community and the state.

Meanwhile, the Govern-ment has, through the state EPA, given the green light for Metallica Minerals’ proposed A$80M heavy mineral sands

project near Weipa. Metallica subsidiary Oresome Austral-ia said the zircon-rutile mine has only a four-year, 20,000 tpa life but is surrounded by a further 2,000 km2 of high-prospect exploration tene-ments spread along 300 km of coastline.

Coal prospects are con-siderably dimmer, however. Glencore has officially con-firmed it has shelved Xstra-ta’s A$7B, 30 Mtpa Wandoan thermal coal mine, having earlier halted the associated Balaclava Island coal termi-nal development.

Separately, the Mitchell Group has stalled its Fitzroy Terminal barge/tranship-ment project at the mouth of the Fitzroy River near Port Alma, due to the downturn in demand. Mitchell Ports is continuing to work through necessary approvals proc-esses, however.

Queensland port plans facing mixed outlook

Samson Materials Handling in the UK (formerly B&W Mechanical Handling and part of Germany-based Au-mund Group) has launched a new material feeder, desig-nated MF0814T.

The machine is a tracked derivative of the existing Samson material feeder prin-ciple and, says the company, offers unrivalled flexibility, market-proven high perform-ance and reliability.

The concept has been de-veloped in conjunction with mining and minerals custom-ers, who require the holding capacity of up to 50t offered by the standard MF0814W, combined with operational durability and accuracy in discharge control, now deliv-ered to operate on the most testing ground conditions.

The Samson material feed-er MF08 series is designed for heavy duty applications with continuous use includ-ing impact loading from articulated dump trucks and large loading shovels. Suit-able for a material with bulk density up to 2.6 t/m³ and lumps up to 400mm, typical materials handled include limestone, coal and coke, raw slag, alternative fuels, clays and shale and heavy mineral ores.

The MF0814T is self-pro-pelled and operates via an in-tegrated diesel power supply offering flexibility on site. Self-steering through the um-bilical control, the unit can be deployed quickly and inde-pendently so offering greater utilisation, flexibility and productivity, added Aumund.

A Samson MF0814T material feeder on site

New Samson feeder

Yuzhny prepares for privatisationsUkraine’s state Seaport Administration has assumed responsibility for funding

the deepening of the Black Sea port of Yuzhny, which until June 2013 had been fi-nanced by the port itself. The move comes as the country’s infrastructure ministry pre-pares to issue tenders next year for concessions to oper-ate the port’s state-run port facilities.

PortInvest, controlled by steel tycoon Rinat Akhme-tov, has already expressed its interest in bidding for the concessions. The company is already in the process of de-veloping an import terminal to handle 10 Mtpa of coal and an export facility to handle 8 Mtpa of iron ore at berths 8 and 9, respectively, and also has plans to build a further two berths (10 and 11) as part of a €200M investment.

Other investors have re-vealed plans to build facili-

ties for handling grain, veg-etable oil, general cargo and containers at the port, which could more than double the Yuzhny’s volume to 90 Mtpa.

Located 30 km northeast of Odessa, Yuzhny handles mainly bulk cargoes, princi-pally coal, grain and iron ore, for export to China and South-east Asia (over 40 Mtpa). Most calls are 150,000 to 170,000 dwt Capesize ships, but the 15.5m depth limitation along-side means around 4 Mtpa has to be handled offshore.

Costing nearly €100M, in-cluding about €58M this year alone, the project to dredge the port to 21m depth by 2015 will make it the deepest port in the Black Sea basin, according to Seaport Administration chair-man Yuriy Vaskov. By the end of this year, the deepening and widening of the harbour’s 3 km approach channel is due for completion, providing ac-cess for 200,000 dwt vessels.

Caspian Sea port contract

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Turkmenistan has con-tracted Turkey’s GAP Insaat to build a new in-ternational seaport near the country’s existing Caspian Sea harbour of Turkmenbashi. The new port will comprise ter-minals for bulk, contain-ers (400,000 TEU/yr), freight ferries (75,000 trailers/year) and pas-sengers (300,000/year), representing capacity to handle more than double Turkmenbashi’s current total volume of 10 Mtpa.

The harbour will have 3.6 km of berths, 2.2 km of approach roads and 5.3 km of railways connecting it to the rail network. The US$2B project also calls for the construction of a shipbuilding and repair yard occupying 143,000 m2. All the works are due to be completed by 2017.

According to President Gurbanguly Berdimu-hamedow, the new port will boost capital invest-ment in the region and en-able his energy-rich coun-try to export its gas, oil and cotton to Europe and the Middle East bypassing Russia – Turkmenistan currently uses Russia’s Volga-Don Canal to ex-port commodities.

“The new harbour would become an impor-tant transportation hub within the newly emerg-ing geo-economic zone uniting Central Asia with Europe, Turkey and the Middle East via the Cas-pian and Black Seas,” the Turkmen president said.

Turkmenistan holds the world’s fourth-largest nat-ural gas reserves, vast oil reserves estimated at 12 Bt and is a major cotton producer.

CMM cranes for MurmanskSt Petersburg-based port ma-chinery manufacturer CMM has beaten off competition from Liebherr and Аrdelt to win the tender to supply the Russian Barents Sea port of Murmansk with three uni-versal portal cranes, due for delivery in 2014.

With a lifting capacity of 100t and 40m outreach, the new Vityaz cranes reportedly won the tender because they exceeded the energy efficien-cy of their rivals.

Had Murmansk chosen Liebherr or Аrdelt, the port would have had to spend an

additional US$3.3M to radi-cally transform its power sup-ply system, claimed CMM director general Oleg Titbe-ria. Because the port already operates seven CMM-built cranes, the Russian manufac-turer already has after-sales service capabilities in place.

EBHISA equity stake value risesThe value of the 68.8% stake that Gijón port authority (APG) in Spain wants to sell in European Bulk Handling Installation SA (EBHISA) could be affected by a policy being considered by the na-tional ports agency, Puertos del Estado, to allow longer concession periods to be made available.

A mid-2012 valuation of EBHISA suggested that the

company was worth around €15M, pricing the stake on offer from APG at €10.3M.

The main asset controlled by EBHISA is its terminal on Marcelino León quay, for which the concession expires in 2029. However, were this to be extended – and the ad-ditional period has yet to be decided upon – EBHISA would be considerably more valuable. Further boosting

the value of the company is its acquisition of Oligsa, giv-ing it access to more stockpile areas on Aboño Esplanade.

It has also been suggested that the deployment of bulk carriers of up to 400,000 dwt on Nuevo Muelle Norte will make it more attractive to in-vestors. ABG is keen for any new shareholders to bring additional bulk traffic to the terminal.

LEDs for Metro Port of Long Beach staff are recommending its Board of Harbour Commissioners ap-prove a US$55,000 project to replace metal halide fix-tures with LED lights at Metro Port’s coke barn and ship loading facilities. Fund-ing will come from Long Beach’s Greenhouse Gas Emissions Reduction Miti-gation Grant Program and allow the Metropolitan Ste-vedore Company to replace

15 metal halide fixtures at its bulk terminal on Pier G.

The metal halide fixtures to be replaced are 9 x 1000W fixtures on the exterior of coke storage barns, 4 x 400W fixtures mounted under boom of shiploader number one, and 2 x 400W fixtures under the boom of shiploader number two. Once the replacements are completed Metro Ports is required to file project benefits reports annually for five years.

News

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© 2013 Terex Corporation. Terex is a registered trademark in the U.S. and many other countries.

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solution tailored to the pier’s width and loading capabilities.

“The first Gottwald crane has made a major contribution to in-creasing our handling rates,” said Ronaldo Sapateiro, plant manager at Fospar. “For this reason, we decided to replace the old crane that we are still currently using on the finger pier with a further G HSK 4316 B.”

Bob Histon, Terex Port Solutions’ head of sales and services in the Americas, commented: “Brazil is the growth locomotive of the region and the growing demand for our

portal harbour cranes shows that we have the right products to meet our customers’ needs.

“We have to-date predominantly been represented on the local mar-ket by mobile harbour cranes for container handling. Now, Terex Gottwald handling machines are increasingly taking over bulk termi-nals.”

From autumn 2013, another Terex Gottwald Model 4 G HSK 4316 B portal harbour crane will be help-ing to move bulk cargo for Fospar SA, part of Mosaic Fertilizers, at its 2.6 Mtpa SSP granulation plant and fertilizer terminal in Paranaguá, Brazil.

The new crane is identical to the one supplied to the Fospar termi-nal last year and has been ordered, based on the first unit’s perform-ance, as a replacement for the sec-ond old slewing crane on the finger pier.

From the slew ring upwards, the G HSK 4316 B provides the facility with proven Terex Gottwald mobile harbour crane technology, fitted onto the rails of the narrow quay serving bulk vessels up to Panamax class. The crane is four-rope grab variant with a 40t grab curve in A7 classification, tailored for bulk handling.

The unit is operated with power from the harbour mains and fea-tures a compact design, comparably low weight and an individual portal

A new study has concluded that deepening the Lower Mississippi to 50ft would add US$11.5B to the US economy.

The study, commissioned by the “Big River Coalition” and the Loui-siana Department of Transportation from economist Dr Tim Ryan said that dredging from the current 45ft to 50ft would provide this econom-ic boost as 50ft is the controlling draught of the new Panama locks.

The Gulf port of New Orleans is around the same steaming time from Colón as Miami. New Panamax opens up the prospect of shipping to and from Asia in much bigger and more economical bulk carriers and containerships using tri-modal sup-ply chains along the Mississippi and associated river systems.

The cargo carried on the Mis-sissippi River system, mostly raw materials, other bulks and semi-processed goods, has an estimated US$135B annual impact on US economy.

It connects 31 states and two Ca-nadian provinces through the third largest river basin in the world.

The plan to deepen the Lower Mississippi River would be ac-complished in two phases. Phase one would deepen Southwest Pass to Venice, Louisiana, or Mile 10 above Head of Passes – a 30-mile stretch. This would automatically open 175 miles of River to a 50ft channel. Construction cost is esti-mated at US$195M, with annual maintenance at US$60M.

Phase II would begin at Belmont Crossing and dredge several river crossings to Mile 232 at the port of Baton Rouge at a cost of US$105M, with annual maintenance costs of US$30M.

The Lower Mississippi River channel was authorised in 1986 to be deepened to 55ft but was nev-er dredged below 45ft due to the onerous federal requirement that annual maintenance beyond 45ft would be the State of Louisiana’s responsibility.

Study urgesMississippideepening

Gottwald for Fospar

The new Terex Gottwald crane is identical to one supplied last year (right) and will replace an older slewing crane (left)

News

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ISSN 0955-3754ISSUE NO:144

Electrically driven MacRack units

Transport utility Transnet is pushing ahead with plans to construct its own coal export terminal at Richards Bay, separate from Richards Bay Coal Terminal (RBCT). Tran-snet is keen to ensure that black empowerment mining companies have greater ac-cess to export capacity.

“We spoke to RBCT mem-bers about this,” said Tran-snet CEO Brian Molefe. “Their attitude is that they have already given up ca-pacity at the terminal to al-low access for new players and they cannot give up any more. So we want to cre-ate export capacity outside RBCT and make it available

to the small guys. That is the role of the state.”

The development of new mines in South Africa’s Waterberg Basin and also in Botswana should increase demand for export capacity over the next decade.

The biggest obstacle to increased shipments out of Richards Bay, whether from RBCT or a separate entity, is the lack of capacity on the railway to the port.

While RBCT now has annual handling capac-ity of 91 Mtpa, Transnet Freight Rail has strug-gled to get above 65 Mtpa.

However, there are signs that the company could be

overcoming its problems. It handled a record 6.88 Mt in August and 6.46 Mt in Sep-tember.

Writing to the CEO of TFR Siyabonga Gama, RBCT CEO Nosipho Siwisa-Dama-sane said: “It is clearly evi-dent that the initiatives un-dertaken by TFR to improve the coal line efficiencies are yielding positive results.”

Elsewhere in South Africa, the country’s first new coal railway for 27 years is now under construction. The 68 km line, which is to run from coal mines in Mpumalanga Province to the new Majuba power plant, is due to be completed in 2016.

Iron ore reserves estimated at about 830 Mt have been dis-covered close to the existing iron ore mines at Zouerate in the north of Mauritania. In ad-dition, Charter Pacific Corpo-ration is hopeful of confirm-ing that its Kaoua El Khadra has 4.4 Bt of iron ore fol-lowing recent drilling work.

The country currently produces 12 Mtpa but state-owned Société Nationale Industrielle et Minière de Mauritanie (SNIM) hoped to increase this to 40 Mtpa even before the recent discover-ies. SNIM director Mohamed Abdellahi Ould Oudaây said: “Within the next 10 years, the

company will invest about $5B to attain its growth ob-jective.”

At this stage, SNIM be-lieves that the existing railway to the port of Nouadhibou will be able to cope with increased production, although obvi-ously additional rolling stock will be required. The railway is well known for carrying the world’s longest trains. How-ever, the port itself will have to be expanded to cope with rising exports. Work to ex-pand Nouadhibou’s capacity to 25 Mtpa is already under-way, partly through dredging the harbour to allow access for vessels of up to 250,000 dwt.

New ore reserves

…and Greek MacRack dealbulk ships at MacGregor. “The new orders demonstrate ship-owners’ willingness to invest in this type of technology and they are a testament to the con-fidence these particular owners have in MacGregor’s ability to deliver this type of solu-tion. We anticipate that Mac-Rack will become the stand-ard system for side-rolling hatch covers, making separate hatch cover lifters obsolete.”

Each hatch cover panel will be operated by an electrically

Cargotec-owned MacGre-gor has secured an order for autonomous loading and un-loading systems for a 8,700 dwt cement carrier being built for Japanese shipowner Taiheiyo Kisen Kaisha Ltd.

“The totally enclosed ce-ment handling arrangements will ensure flexible, efficient and clean cargo operations,” said Anders Berencsy, Mac-Gregor sales manager for self-unloaders. “An addi-tional benefit is that the com-puter-controlled systems are programmed for automatic operation by just one person.”

The 109m vessel will have

four cargo holds, each divided into two compartments. The cement handling system is designed to carry up to three grades of cement in each ship-ment.

During loading operations, the ship’s deck-mounted re-ceiving aeroslide is connected to the shore facilities by flex-ible bellows. Cement is trans-ferred to two short interme-diate aeroslides by means of hydraulically-actuated flow control gates. These transfer the cargo to two reversible horizontal screw conveyors. One moves the cement for-ward to holds 1 and 2, while

MacGregor cement carrier solution…

Standard and Poor’s downgrading of Western Australia’s AAA credit rating has sharply in-creased the likelihood some parts of the state’s port network will be sold to help repair the state bal-ance sheet.

Local media said “sig-nificant work” on port pri-vatisations has been com-pleted in the office of state treasurer Troy Buswell, who holds responsibil-ity for ports. Buswell indi-cated he is unlikely to sell any ports outright but will consider major facilities within state-owned ports, such as the Kwinana Bulk Terminal near Fremantle and the Utah Point com-mon-user iron ore terminal at Port Hedland. Other as-sets in the water, gas and electricity sectors as well as landholdings will also be considered for sale.

“There are clearly as-sets on our balance sheet that don’t need to be held by the taxpayer,” Buswell said, echoing counterparts in NSW and Queensland where ports have already been priva-tised or are on the market.

Current users of the nominated facilities have been quick to raise con-cerns that privatisation could result in unsu-pervised price gouging. While a Utah Point sale to Asciano or (current op-erator) QUBE could raise A$500M, users said the current rate of about $8/t would inevitably rise and therefore conditions must be attached to any sale.

WA port sell-off

Optimism for new Richards Bay hub

The cement carrier during capacity testing

Rhenus renamingThe Rhenus Midgard group has renamed its Niedersach-senbrücke terminal in Wil-helmshaven, Germany, as Rhenus Bulk Terminal Wil-helmshaven.

“You could say we are now in the Champions League and we are getting this across with our new name,” said Rhenus Midgard joint MD Michael Appelhans.

In 2012 the terminal’s draught was deepened to 18.5m to accommodate Capesize bulkers and it has invested in new ship-unload-ers, conveyors, an automated stacker/reclaimer and a new wagon loading station. The intermediate coal storage area has also been enlarged. The terminal is targeting an annual throughput of 10 Mtpa of coal.

the other serves holds 3 and 4. A combination of hydrauli-

cally actuated sliding gates, flexible connections, hydrau-lically-actuated flow divid-ers and transfer aeroslides complete the delivery of the cement to the selected drop off points. Maximum level guards indicate when the holds are full, while pneumat-ically operated shut-off valves avoid contamination between different grades of cement.

Sloping aeration panels in-stalled on the tanktop of each hold are the first elements in the discharge system. Air blown through the panels flu-idises the cement, allowing it to flow towards the centre of the hold, where it feeds into a vertical screw conveyor equipped with two remote-controlled flow control gates.

At deck level the cement returns to the reversible hori-zontal screw conveyors and is conveyed to a buffer hop-per inside the pump room, located amidships. From the hopper the blow pump sys-tem transfers the cement to a silo ashore via two pipes. Dust collectors are installed on deck.

MacGregor has also won an order to supply side-rolling hatch covers for five 180,000 dwt bulk carriers under con-struction in South Korea at Sungdong Shipbuilding and Marine Engineering. The hatch covers will be operated by MacGregor’s innovative MacRack technology. The order includes the design and supply of key components and the fabrication of the hatch covers.

The bulkers are destined for two Greek owners – the first two for Quintana Ship-ping and the remaining three for Alcyon Shipping. The first vessel is scheduled for deliv-ery at the end of 2014.

“Technology that drives new standards of efficiency and minimises environmental im-pact is an essential element of today’s market,” said Torbjörn Dahl, senior naval architect for

Tanzania bulk dealPan-African private equity firm Jacana has invested in DSM Corridor Group (DCG), a bulk cargo handling business at the Port of Dar es Salaam. Non-governmental investment fund Soros Eco-nomic Development Fund (SEDF) has also invested in the company in order to sup-port the growth of SMEs in Tanzania. DCG will use the twin investment to expand the range of commodities it can handle and storage capacity.

“DCG is a prime example of the attractive investment opportunities that can be found in the country,” said Jacana partner Ezra Musoke.

A spokesperson for SEDF said: “The positive outlook for mining, agribusiness and construction means there is high growth potential for the company and significant social impact for the wider community.”

The port secured new bulk business in September, when the Tanzania Zambia Rail-way secured contracts to transport maize from Mbeya and fertiliser to the port.

driven MacRack unit, which both lifts the panel up from its closed position and then rolls it away to its open, stowed po-sition.

The panels are automati-cally freed from their secur-ing cleats as they are lifted. The overall operating time for one hatch is approximately 2.5 minutes.

Each MacRack unit is mounted at the associated longitudinal coaming, driving a pinion which engages with a rack fitted underneath the hatch cover panel. In the open position, panels are stowed on transverse ramps. During the closing operation, the hatch covers are automatically cleated and made weather-tight. Automatic motor brakes prevent the panels from unin-tentional rolling at all stages of the opening and closing process.

News

BMI September/October 2013 5

Oz grain reshapes…bulk loading/receiving facili-ties at Kwinana and has off-port storage at Albany, Espe-rance and Geraldton.

According to Australian Crop Forecasters’ statistics, CBH is Australia’s biggest grain exporter, shipping 5.56 Mt in 2012-13. But follow-ing its US$6.1B takeover of Canada’s Viterra, Glencore is now Australia’s largest wheat exporter at 3.4 Mt, followed by CBH at 3.3 Mt and Cargill at 3.2 Mt.

The industry is closely watching the entry of Swiss-based, Dutch-owned Vitol, which stunned the market by debuting with an unheralded purchase of some 400,000t of port capacity for this season. Cargill is also on the industry radar after outbidding rivals for Joe White, Australia’s largest malting company.

Australian agribusiness heavyweights are flexing their muscles as they eye Archer Daniel Midlands’ contentious take-over of dominant east coast grain handler and marketer Grain-Corp, which still requires government approval.

What will be the only remaining Australian-owned grain group, Western Aus-tralia’s CBH, is striving to counter multinationals’ aggressive behaviour in its own backyard by opening a North American office to provide alternative sources of grain for its Asian customers.

The Portland, Oregon beachhead will seek 500,000t of Canadian and US grain in its first year to help satisfy grow-ing demand from 260 custom-ers spread across 30 countries. CBH will target 10 privately owned grain elevators and terminals in the Pacific North-west to handle shipments.

HES Beheer is to become sole owner of stevedoring and transport group Atic, which operates bulk and steel terminals in France and Po-land. HES will acquire the 78% share currently owned by ArcelorMittal, having previously bought a 22% stake in December 2011.

The Atic buyout will make HES bigger and broader as well as a more simplified and unambiguous asset for the private equity fund that is currently negotiating to buy all HES shares. Unconfirmed Dutch reports suggest that this party might be Riverstone of New York and London.

HES Beheer buys Atic

209.946.0246 portofstockton.comCALIFORNIA

Port of Stockton

The Port of Stockton is located in Foreign TradeZone #231, close to Interstates 5 and 80. The portis an international 35-ft. deep-water port with morethan 2000 acres for import/export cargo and isan overweight corridor connection for rail-boundheavy cargoes to and from Asia/U.S.

TThe Port is served by both the Union Pacific andBurlington Northern Santa Fe railroads. TheCentral California Traction Company (a whollyowned subsidiary of both railroads) providesindustry switching and track maintenance services.The Port is expanding the rail intermodal sectionto have four 800-meter tracks of a half-mile eachavailable for component storage and staging.available for component storage and staging.

New rail extensions will allow the Port to beginreceiving three more bulk unit trains per week forexport. This increases the capacity at the Port ofStockton and Metro Ports’ ship loader to six unittrains, from the current three trains per week, ofexport iron ore or coal. This new track allows a loop, upon which inbound and outbound trains can moveupon which inbound and outbound trains can movewithout interfering with operation of the Port’seast complex class yard. The tracks will improveinterchange between Union Pacific, BNSF Railwayand the Central California Traction Company, aswell as reduce equipment dwell time at the Port.

The move comes as a number of new players vie for CBH’s traditional grower/suppliers and estab-lish alternative supply chains.

Bunge said it is on target to start bulk exports from Bun-bury, WA by mid 2014, as it works to establish its own on-farm storage and road transport network in compe-tition with CBH. The firm is investing A$40M and offer-ing wheat and barley grow-ers long-term contracts as it seeks to build volume of 200,000 to 300,000 tpa. In the interim Bunge has bought shipping slots at CBH’s Kwinana and Geraldton ter-minals for this year’s harvest.

Louis Dreyfus subsidiary LD Commodities Australia recently purchased WA’s Ravensdown Fertilisers and will use the business to lever-age an expansion of its activ-ities, including grain exports. Ravensdown already leases

...WA wheat threatA stalemate between the West-ern Australian Government, CBH Group and rail network owner Brookfield Rail is threatening what is forecast to be a record export grain crop. The WA Government refused to fund refurbishment of so-called Tier 3 grain lines in the state’s Wheatbelt, saying it is a commercial matter be-tween CBH and Brookfield.

The issue was highlight-ed when a seldom-used, 116-year-old Tier 3 line col-lapsed under a CBH-Watco grain train near Quairading in September. CBH warned that thousands of extra truck movements will be forced

onto regional roads to handle a likely record wheat harvest of 12.8 Mt.

Transport minister Troy Buswell said that while Tier 3 lines handled 12% of WA’s grain, these will close on 31 October unless CBH and Brookfield can reach an ‘eco-nomically viable’ agreement.

Since 2010 CBH has estab-lished its own rail operations and invested in locomotives and rolling stock, managed by Watco of the US. This has significantly lowered freight charges for growers.

Brookfield has estimated the cost of re-sleepering Tier 3 lines at A$90M.

China’s Shandong Lingong Machinery Co Ltd (SDLG) has continued the global rollout of its excavator line with a move into Africa. The company chose the inau-gural Bauma Africa event in Johannesburg to launch two hydraulic excavator models to the local market, the LG6150E and LG6210E. SDLG said its hydraulic excava-tors are ideally suited to the African market. “We un-derstand that our customers want a tough machine that will keep running – even in the harshest conditions,” said Wang Xiaohui, head of export sales at SDLG.

Metso has agreed to divest certain parts of its industrial rubber conveyor belt manu-facturing and related sales and services operations to ContiTech and Lutze Group. The operations comprise 27 locations with around 340 employees currently belong-ing to Metso’s Mining and Construction segment.

Industrial rubber conveyor belt manufacturing and sales and services locations in Fin-land will be divested to Cont-iTech. The equivalent business locations in Belgium, Ger-many, Netherlands, Norway and Southern Sweden will be divested to Lutze Group.

Metso said that industrial rubber conveyor belts and re-lated services will continue to be an essential part of its of-fering to mining and construc-tion industries in the future. The divestment is part of the

firm’s strategy to develop and simplify its current produc-tion capacity in Europe.

“The aim is to improve the competitiveness of the busi-ness and to further develop customer service,” it said in a statement. “The sales and services operations planned to be divested serve other cus-tomer industries than mining and construction.”

Hans-Jürgen Duensing, head of the ContiTech Con-veyor Belt Group business unit, commented: “The acqui-sition strengthens ContiTech’s industrial business and is the perfect complement to the Conveyor Belt Group’s cur-rent range of industrial con-veyor belts and special belts. Our objective is to continue and further develop activities at the plant in Finland and gain access to new customer groups in the Scandinavian markets.”

Metso divestment Stobart contractStobart Biomass Products Ltd has signed a 15-year contract to supply 150,000 tpa of biomass fuel to West-ern Bioenergy Ltd’s biomass plant at Port Talbot, UK. The deal follows the acquisition of Western by Greensphere Capital LLP.

The contract requires a mix of virgin wood and Grade A recycled wood, with the recycled component set to increase following planned upgrades to the plant. Sto-bart will supply around 50% of the volume itself and will manage and process the re-mainder, supplied by a third party.

Stobart said it would in-vest £800,000 to acquire “a small stake in the equity and debt of the project, alongside Greensphere”.

Germany Focus

BMI September/October 20136

Germany in the firing lineGermany is one of the very few EU countries to commission new coal-fired power plants, but environmen-tal concerns pose problems for the long term future of thermal power

Despite Germany’s Green Party suffering declining support in

the recent national elections, the country has a very pow-erful environmental lobby. At the same time, Germany has a very strong industrial base which demands cheap electricity, regardless of its source, and this currently means a very heavy reliance on coal firing.

This puts these two groups at loggerheads over future en-ergy policies following Ger-many’s decision to pursue a programmed closure of all of its nuclear power plants before their lifecycles are complete.

In 2012, coal-fired power plants generated 45% of total electricity, followed by re-newables with a 22% share, nuclear at 16%, and gas at 11%. In the first half of this year, however, coal-fired power plants contributed 52% of Germany’s electricity de-mand as output from natural gas-fired power plants and wind turbines declined, ac-cording to research organi-sation Fraunhofer Institute (ISE).

Coal plants, including lig-nite, increased production by about 5% to 130.3TWh in the first six months of 2013 as output from gas-fired power plants fell 17% to 21.9TWh, the ISE said. Wind turbine output, meanwhile, fell 10% to 22.4TWh, while solar output was unchanged at

14.3TWh. Hydro output rose 3% to 9.2TWh, with nuclear power up 1.8% to 46TWh.

Hard coal plants alone in-creased production by 8.5% to 65.8TWh in the first seven months of 2013.

Overall, the share of coal-fired power in the first half of 2013 rose 3% to 52%. Ger-many’s nine nuclear power plants contributed 18% to to-tal demand, while combined wind, solar and hydro output added 18%.

Gas-fired power’s share dropped to 9%, with even the

most modern CCGT plants now seriously underutilised. The gas-fired plants are need-ed for security of supply dur-ing winter months. Germany’s largest utility E.ON, for in-stance, said it will close its un-profitable 430MW gas-fired Malzenice plant in Slovakia in October but will retain its Irsching gas plant in Bavaria after a deal was signed with the German grid regulator to restore profitability at the unit.

According to the Federal Grid Agency, power genera-tors plan to add 5.3GW of new

coal-fired power plant capac-ity this year. However, a total of 39 proposals for coal-fired plants have been put forward, with the majority of these now abandoned or cancelled.

Five new coal-fired power plants in Germany with a combined capacity of around 4GW have had their “first fire” in the last couple of months and will be generat-ing electricity in the hot test-ing phase over the next few months, according to a Platts survey of the five plant opera-tors.

The projects include RWE’s Hamm D unit (800MW), EnBW’s RDK 8 (912MW), Vattenfall’s first block at Ham-burg Moorburg (840MW), Steag’s Walsum 10 unit (725MW) and GDF Suez’s new coal-fired power plant at Wilhelmshaven (800MW).

Trianel’s 750MW coal-fired plant at Luenen is already in operation and on track to be commissioned in the third quarter. Steag’s Walsum 10 unit and EnBW’s 912MW RDK 8 facility are on track to start generating power before the end of this year.

RWE’s 1.6GW newbuild project at Hamm is progress-ing, with the first 800MW unit (Block D) already in the testing phase following pre-liminary firing in May and the second unit is to follow short-ly. Steag’s Walsum 10 unit has already come online, but is still in the testing phase, with an initial 175MW fed into the grid in June with further tests at different output levels on-going.

Critical massThe Vattenfall ultra-critical 840MW hard coal-fired power plant at Hamburg-Moorburg is also entering the final phase of testing, with full grid synchronisation of Block B scheduled for the autumn. When completed in 2014, the Moorburg plant will be one of the world’s most modern and efficient power stations with a fuel performance ratio of up to 61% when producing both electricity and district heat-ing (CHP) and a degree of ef-ficiency of 46.5% when only generating electricity.

The Hamburg-Moorburg plant is located on the River Elbe on a site that was previ-ously also used for electric-ity generation. The plant is designed for annual electric-ity generation of 11.5TWh, which will meet about 90% of Hamburg’s electricity require-ments.

Additionally, Moorburg will produce about 2TWh for district heating, amounting to some 40% of the district heat-ing supply that Vattenfall pro-duces for Hamburg. Around 12 km of new pipeline will connect the Moorburg plant to Hamburg’s district heating system.

Moorburg power plant will replace an existing power sta-tion in Wedel which has been in operation for more than 45 years. However, Vattenfall’s

coal-fired 321MW Tiefstack power plant in Hamburg will remain fully operational.

Fossil futureOver 90% of Vattenfall’s gen-erated electricity in Germany is based on fossil fuels, much of which is sourced from Vattenfall’s own lignite mines, inherited as part of the deal when the company acquired a large part of the old East Ger-man generating capacity.

Continuous improvements are being made in production efficiency at the plants. To-gether with the lignite-fired block at the Boxberg plant in Sachsen, inaugurated in Octo-ber 2012, the new Moorburg coal-fired plant will increase the overall energy efficiency of the generation portfolio. Vattenfall states that no addi-tional coal-fired power plants will be built until they can incorporate CCS technology, which will require a clear leg-islative framework.

New biofuel-fired power plants are also planned, two of which will be sited in Berlin plus one in Hamburg.

Efficient burnEnBW’s new RDK 8 project at Karslruhe also underwent a live burn test in June when fuel oil was used to generate steam, before further tests fol-low with coal.

According to EnBW, the RDK 8 “ultra-critical” unit will be the world’s most effi-cient coal power plant with an efficiency rating of 46%. This compares to an industry aver-age of around 35% to 38% for coal-fired power plants over the past decades in Germany. However, RWE also claims a 46% net efficiency rating for its Hamm plant.

For the same level of elec-tricity production, the new RDK 8 plant will require 20% less coal, reducing CO2 emis-sions by 2.5 Mtpa compared to legacy plants, it is claimed.

Overall, German power plant operators will add 7.3GW of new coal-fired capacity by 2015, including second units at Hamm and Moorburg (2014) as well as the 900MW GKM 9 plant at Mannheim (2015).

E.ON’s Datteln 4 plant, which has been constructed, but has to re-apply for op-erating permissions, may add another 1GW before the

country’s first nuclear reactor is taken offline by the end of 2015 under the nuclear phase-out plan.

Blinded by lightAccording to the Coal Im-porters Association, Verein der Kohlenimporteure e.V (VDKi), declining hard coal output in Germany, Spain and Poland is being compensated for by imports, at least in part. But the recession, particu-larly the Southern European euro zone countries, has led to lower power consumption.

The long winter and the lower “clean dark spread” (the costs for coal, freight and CO2 certificates), in comparison with the “clean spark spread” (costs for gas, transport and CO2 certificates), favour coal imports to Europe, especially to Germany, the UK, Spain and Italy.

However, VDKi’s CEO Dr Wolfgang Cieslik (who is also an executive at power genera-tor Steag GmbH) is concerned that the continued growth in the feed-in of power from re-newable energy sources (es-pecially solar photovoltaics) in Germany, Italy and Spain could dampen demand for coal, especially in the summer months.

In this respect, the utilisa-tion of steam coal is becom-ing an inverse function of the amount of sunlight – and Eu-rope last year experienced a particularly fine summer.

On the riseNevertheless, results in Ger-many from the first quarter of 2013 gave the VDKi reason to be cautiously optimistic, as power generation from hard coal-fired power plants in the country rose by an estimated 3TWh to about 42TWh.

Quoting data from the AGEB, Dr Cieslik observed that hard coal consumption for power generation rose by 14.5% to 14.5M TCE (tonne of coal equivalent) while pro-visional calculations from the VDKi showed that the import of steam coal increased by about 2 Mt to over 10 Mt dur-ing the first quarter.

Gross power export rose by almost 70% in comparison with the same period in the previous year to 21TWh. Tak-ing out power imports, there is still an export surplus of 12TWh, generated primarily

A study commissioned by the coal importers association VDKi concluded that thermal coal firing will dominate power supply until even 2050, despite the growing gen-eration of power from photovoltaics

The 2,200MW Scholven hard coal-fired plant generates some 3% of Germany’s power demand and supplies six cities with district heating. In the absence of nuclear pow-er, it is unlikely it could be replaced by renewables in the medium to long term

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BMI September/October 2013 7

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in hard coal-fired power plants, Dr Cieslik noted.

Key to the powerThe VDKi is particularly aware of the future role of hard coal-fired power plants for the energy market.

“They [coal-fired generation plants] are not only indispensable for the energy turnaround, they are in actual fact the true pillars of the grid, and will remain so today and tomor-row,” said Dr Cieslik. “This has been unambiguously documented in the Prognos study commissioned by the VDKi. Starting from the basis of the targets set forth by the Ger-man government, the study comes to the conclusion that the thermal hard coal-fired power plants and their de-pendable availability will remain the foundation of power supply security even in 2050, despite the growing generation of power from wind and photovoltaic farms.”

But Dr Cieslik warned against be-coming too pessimistic, accepting that “the thermal power plants ur-gently need a new power market de-sign within a functioning energy-on-ly market. The current market design distorts competition, featuring as it does subsidies of renewable energies via the EEG and the right to priori-tised feed-in regardless of the actual demand for power, and puts thermal power plants at a competitive dis-advantage, posing a genuine threat to their continued operation and evolvement for the security of sup-plies and the affordability of power.”

Set for a fallVDKi managing director Erich Schmitz accepted that “German im-ports of hard coal are likely to fall 4% in 2013 from a year earlier to 46Mt.”

He added: “Coal generation is the backbone of German power sup-ply. It used hard coal for 19.1% of 2012 generation with another 25.6% provided by domestic brown coal, although we expect slightly lower imports from the coal-burning pow-er industry because of competition from renewable energy and due to coal plant closures.

“We are also cautious about cok-ing coal imports because European steelmakers buy less raw material, with their sales declining, and as they face global competition.”

VDKi pegged thermal coal im-ports at 34 Mt, down 3.7% from 2012. Coking coal imports used for steelmaking would fall 6.3% to 9 Mt while domestically sourced cok-ing coal, would be steady at 3.0 Mt, VDKi said.

Pendulum politicsThe European Association for Coal and Lignite (Euracoal) noted that the German case – the relatively sudden phase-out of nuclear generation, the massive expansion of photovoltaics and high oil and gas prices – illus-trates that it is sometimes difficult to understand political developments which affect the energy sector.

In 2011, 20.3GW of German gen-eration capacity was still nuclear and 20.2GW was lignite. By the end of 2012, only 12GW of nuclear remained and 20.8GW of lignite, meaning lignite has become the reli-able base-load energy source.

Compared to 2010, nuclear de-creased its share in electricity pro-duction by 42TWh, whilst renewa-bles increased their share by 32TWh and lignite by 12TWh. At the begin-ning of 2012, the installed capacity of renewables was 25.3GW, but had increased to 32GW by the end of that year.

In other words, Germany has a

high feed-in of photovoltaics on bright summer days (between 10 to 16 hours) of some 15GW to 20GW, representing 20 large nuclear power plants. This can create a large power surplus, but also requires significant back-up capacities for periods when there is no sunshine. Last year, Ger-many exported more electricity than ever before but at a very low whole-sale price.

Euracoal noted that the German power market is undergoing drastic changes and even though politicians call for further renewables expan-sion, back-up capacities will be needed, either in the form of addi-tional conventional power plants or new storage capacities.

Such is Germany’s dependency on coal-fired power genera-tion that even E.ON’s 1957-built 132MW Shamrock power station is still on frontline duty

But investment uncertainty is so high – due mainly to Government policies – that nobody is willing to take the risk of investing in con-ventional capacities. A solution will have to be found to ensure Germa-ny’s supply security and one option would be capacity payments. Once the dust has settled on the German election, the next government may be in a stronger position to make changes to these energy sector policy developments. �

Brazil Focus

BMI September/October 20138

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Bulk Materials Int A4.indd 1 16/10/2013 09:19

Brazil puts another brick in the wallBrazil’s iron ore exports,

the country’s main ex-port for over a decade,

totalled 128 Mt in January to June 2013, down from 136 Mt in the same period last year. According to the latest figures from foreign trade department Secex, it generated US$2.67B in July, down 10.3% from US$2.84B during the corre-sponding period last year. But the amount of iron ore shipped abroad was 29.69 Mt in July, 4.2% more than the 27.25 Mt exported in July 2012. In August, Brazil’s iron ore ex-ports generated revenue of US$2.64B, down 4.35% from US$2.76B a year before. The average sale price decreased 14% to US$89.8/t from US$104.3/t, Secex noted.

Private enterpriseBrazilian iron ore exports are

dominated by Companhia Vale do Rio Doce, the former state-controlled group known worldwide as Vale, which is now one of the world’s largest mining conglomerates.

The company had a solid financial performance in Q2 2013 against a background of uncertainty in the Chinese market and pessimism among European steelmakers with below-trend global economic growth and declining mineral and metal prices.

Operating revenues were US$11.3B, generating earn-ings of US$3.3B, much of which has been channelled

into mining projects such as the Salobo II copper pro-duction complex, as well as bulk materials projects, such as those alongside the Carajás S11D iron ore and Moatize II coal mine.

Iron ore sales were slightly above expectations, at 61.9 Mt in Q2 2013 and 117.6 Mt in H1 2013, broadly in line with H1 2012. The average price for Vale’s iron ore shipments dropped to US$99.20/t from US$111.70/t in Q1 2013, as it managed to cushion the effect of the fall of its 62% Fe grade ore to US$125.95/t in Q2 2013 from US$148.40/t. Revenues

were sustained at US$6.1B.

Hard travellingShipments from Vale’s Brazil-ian export facility at Tubarão to Qingdao in China travel 11,100 nautical miles, about three times further than de-liveries from Port Hedland, Australia’s main cargo-load-ing terminal. This provides Australian exporters with an immediate cost advantage for the Chinese buyers. Au-gust saw Port Hedland export 27.4 Mt, up from 26.6 Mt a month earlier, with China the biggest buyer, taking 22.3 Mt, up from 20.4 Mt in July.

Shipping from Australia to China costs about US$7/t us-ing Capesize ships of around 180,000 dwt, while freight rates for a Capesize from Brazil to China are around US$17/t. However, this dis-advantage for Brazil is offset by the fact that Brazilian iron ore is much higher quality than Australian, with a purity of about 68% Fe. This com-pares with top Pilbara ore at 62% Fe, the nominal contract index, while Fortescue ex-ports at some 58% Fe content.

For the European market, Brazil has the advantage of being much nearer and there-fore maintains a cost advan-tage over its Australian rivals, but the European steel manu-facturing industry is contract-ing and China is now the growth region.

Building bigIn an attempt to combat its disadvantage in shipping distances, Vale has ordered a series of 35x 400,000 dwt “Valemax” ore carriers, some of which it will own directly, with others chartered under long-term agreements.

In September, Vale held the first loading test of a Valemax vessel in the new South Berth at Pier IV in the Ponta da Ma-deira maritime terminal in São Luís, Maranhão state when the Valemax vale caofeidian, loaded with over 390,000t be-fore sailing to Asia.

The opening of the Pier IV terminal means Vale has three large piers capable of receiv-ing Valemax vessels, the oth-ers being Pier I, also at Ponta da Madeira, and Pier II at the Port of Tubarão. To expand the loading capacity of Ponta da Madeira, Vale began the con-struction of Pier IV in 2010 and has been conducting op-erational tests since late 2012.

The Pier IV is part of the first stage of the expansion of Carajás’ logistics capac-ity and aims to add 20 Mt to the current annual capacity, reaching 150 Mtpa by 2014. This investment will support an increase in production of the existing mines in Carajás in Pará state.

The onshore handling sys-tems comprise two car dump-ers, two stockyards, a stacker, two reclaimers and conveyor belts. The offshore part in-cludes the south berth of Pier IV, a 1.6 km access bridge two 16,000 tph shiploaders, an en-vironmental monitoring sys-tem and a tugboat pier.

Since January 2012, Vale-

Declining European steelmaking, falling iron ore pricesand higher freight rates to Asia are forcing Brazilian oreproducers to re-evaluate production projects

max class vessels have been partially loaded at Tubarão, but will now be able to re-ceive full cargoes following a 22-month dredging contract to deepen the port’s shipping channel from 22.5m to 25.3m, making it possible to load ships with a draught of up to 23m.

Loading a Valemax with 400,000t of ore to its maxi-mum draught marks is the big-gest loading operation in the 47-year history of the Port of Tubarão, beating its previous record, set in 2002 when the berge stahl loaded 335,088t of iron ore for Rotterdam.

In a holeWhile Vale is charting a steady course with its iron ore exports, Anglo American is facing serious challenges with its US$8.8B Minas-Rio iron ore mine, connect-ing slurry pipeline and port project, to the extent that it has already written off US$4.4B on the project this financial year.

The Minas-Rio iron ore min-ing project is situated in the states of Minas Gerais and Rio de Janeiro in the south-eastern region of Brazil. It is 100% owned, for the time being, by Anglo American through its subsidiary Iron Ore Brazil. An-glo American initially bought a 49% stake in Minas-Rio in April 2007 for US$1.15B, with the then CEO, Cynthia Carroll, saying the project would rais Anglo American’s iron ore production to over 100 Mtpa within five years. Two years later, Anglo raised its stake in the mine and pipeline to 100%. It has a 49% stake in the Atlantic port of Açu in Rio de Janeiro state, which will export the production.

The mine’s development has been underway since 2009, after Anglo had bought it outright for US$4.6B in 2008 from the Brazilian min-ing group MMX, owned by entrepreneur Eike Batista. The Minas-Rio project was origi-nally forecast to cost US$2.6B to build and was Carroll’s most expensive acquisition in the more than five years that she ran the company.

The project will have an in-tegrated system comprised of open-pit mines, a beneficiation plant, a 535 km slurry pipeline, filtering plant and an export terminal at the port of Açu.

Production is expected in the last quarter of 2013 and the first ore shipment in the second quarter of 2014. The ore will be extracted through

Vale’s Pier IV complex at Ponta da Madeira undergoing berthing trials ready for the 400,000 dwt Valemax vessels, with Pier II, adjacent, loading a conventional bulker

This demonstrates how much spillage you get with a Siwertell ship unloader.

www.siwertell.com Siwertell is a Cargotec brand

Brazil Focus

BMI September/October 2013 9

conventional open-pit mining op-erations. It will be processed at the beneficiation plant to upgrade Fe content. With an average plant feed of 56 Mtpa at 39.5% Fe content, the plant will produce maximum 29.8 Mtpa of 68% Fe pellet feed follow-ing the crushing, grinding and con-centrating.

The pellet feed will be transported through a 525 km long slurry pipe-line that passes through 32 munici-pal districts to connect to the Port of Açu. The ore slurry will be pushed through the pipe line by gravity with two pump stations and one valve station. After transiting the 24x26in diameter pipeline, the ore will be dewatered in the filter plant located near the port. The use of the slurry pipeline eliminates the need to use any of Brazil’s crumbling infrastruc-ture or to construct a rail link be-tween the mine and the port.

Losing patienceAnglo American’s new CEO Mark Cutifani appears to have lost pa-tience with his predecessor’s pur-chase. Under shareholder pressure to cut capital expenditure as Chinese demand slows, he confirmed in July that Anglo had invited bidders to take a stake in Minas-Rio, but he said his company would “only sell for value”.

Six and a half years after the first deal, Minas-Rio has not produced any iron ore. In its first phase of development, it will produce 26.5 Mtpa, but there is scope to optimise this to around 29 Mtpa.

In 2012 Anglo American com-pleted a detailed cost and schedule review of the Minas-Rio iron ore project, and expects the first phase to be on schedule for the end of 2014.

The company has reportedly hired Goldman Sachs, Morgan Stanley and UBS to sell as much as 49.9% of its stake in the project and while Anglo American values the project at as much as US$6B, a deal for a 49.9% stake could be reached for about US$1B.

The plan to sell a stake in Minas-Rio follows the company’s write-down in the value of the US$8.8B mine, processing plant, pipeline and port terminal by US$4B. The mine will generate US$2.5B of earnings with 26.5 Mt output, given a price of US$120/t, or about US$3B at a price of US$150/t although observers be-lieve a price of US$100/t might be a better base to conduct preliminary sale negotiations.

Iron ore prices appear to be firm-ing, following a peak of US$160/t in January, bottoming at US$115/t in June but rallying to US$141/t in Sep-tember, before falling off a little to US$136/t by the end of September.

A factor worth considering is that Anglo American does not have the cost advantages of the Valemax bulk-ers to reduce freight rates to China.

Part of the problem of the Minas-

Production line load testing has been completed at the new ore processing plant at Conceição Ita-biritos, Itabira, Minas Gerais

Rio project is the integrated Açu port complex which will be a mixed-use private facility with an estimated investment of Rs$4.3B (US$1.86B) and is divided between LLX Minas-Rio and LLX Açu, which respective-ly account for Rs1.9B and Rs2.4B.

Located in the city of São João da Barra in the north of the state, the port will have a depth of 21m. It was scheduled to start operations by the end of 2012 and represents LLX’s main undertaking, extending across some 36 square miles. It comprises

an onshore terminal that should start operating this year and an offshore terminal expected to start up in 2014.

Though Brazil badly needs port in-frastructure and LLX believes firms setting up at Açu will invest as much as US$50B in the port complex, it has become involved in a broader crisis at Batista’s EBX group of companies.

The Brazilian tycoon’s group has suffered a dramatic decline in for-tunes with the failings of one divi-sion soon spreading to other parts of the conglomerate due to their fi-nancial interconnectivity. Formerly Brazil’s richest man, Batista is no longer believed to be a billionaire and recently agreed to transfer con-trol of LLX to US-based private-

equity firm EIG Global Energy Part-ners LLC for Rs1.3B (US$548M). He stepped down as the company’s chairman in August.

Joined up thinkingThe Brazilian entrepreneur had en-visioned a fully integrated industrial conglomerate where the flagship firm OGX would buy oil platforms from his shipbuilder OSX Brazil, which would have a shipyard at a port being developed by his transporta-tion company LLX Logistica. LLX, in turn, would gain revenue from shipping MMX iron ore and from onsite manufacturers that would buy electricity from power utility MPX, which would generate pow-

BMI September/October 2013

Brazil Focus

1010

er using coal shipped from CCX Carvao da Colombia.

OGX Petroleo & Gas Par-ticipacoes SA ran into trouble a little more than a year ago after failing to meet produc-tion targets, eroding confi-dence in the rest of Batista’s interconnected EBX empire. The final straw appears to have been when two oil wells the company was fronting proved to be dry.

Batista has lost the confi-dence of investors as his com-panies have struggled to meet revenue forecasts after raising more than US$6B in share offerings and about US$11B in debt during the past seven years, when liquidity was abundant and the offerings were portrayed as a way to ride Brazil’s economic wave.

Second stringIn addition to its involvement in the Açu port, EBX-owned MMX is entering the final phase of construction of its

iron ore export port in Ita-guaí, on Sepetiba Bay in the state of Rio de Janeiro, 75 km southwest of the city.

MMX Port Sudeste Ltda, dubbed the Sudeste Super-port, was originally sched-uled to start operations at the beginning of 2013, ship-ping an anticipated 12 Mt of iron ore in its first year. The port’s nominal capacity is 50 Mtpa, with the option of be-ing expanded to 100 Mtpa. However, problems within Batista’s empire have now delayed opening until mid-2014, which will probably be under a new ownership struc-ture. The new port will export iron ore from MMX’s mines in the state of Minas Gerais. Limited export capacity has restricted the growth of Batis-ta’s mining operations. The Sudeste Superport was in-tended to change this, making MMX one of Brazil’s leading and most influential mining companies.

The Sepetiba Bay is a busy export area which is already home to terminals operated by Vale, Petrobras and CSN. With its proximity to the min-ing centre of Minas Gerais, the port previously planned to start shipping by year-end, provid-ing a supply route for Brazilian mining and metals companies, including Usinas Siderur-gicas de Minas Gerais SA.

This development joins the Superporto do Açu, a US$1.6B project developed by Batista’s logistics compa-ny LLX in São João da Barra, the north of Rio State.

In a deal announced in Oc-tober, Batista sold a 65% stake in MMX Porto Sudeste Ltda to Abu Dhabi’s Mubadala Development Co, already the biggest investor in Batista’s industrial group, and Dutch investment fund Trafigura Group. MMX will retain the re-maining 35% stake in the port.

Mubadala – which already had US$1.5B invested in

Batista’s EBX holding com-pany – and Trafigura plan to pump US$400M into MMX Porto Sudeste Ltda to fund the completion of the port and iron ore terminal and will assume Rs1.3B (US$596M) of debt taken on by MMX Sudeste Mineração SA, an MMX unit linked to the port project. Completion of the deal is subject to regulatory approval and the conclusion of a debt refinancing plan.

MMX CEO Carlos Gonzal-ez said recently that MMX was seeking to sell the entire company, though it will now retain a 35% stake, but pos-sibly only for the short term, depending on how the other EBX companies fare.

“[The port] is a very valu-able asset; as a trader Trafig-ura will be strategically well-positioned,” one Brazilian analyst told Bloomberg. He added that it is unlikely that a similar export facility will be constructed in the region for

at least a decade, giving the Sudeste port a captive market for bulk commodity exports.

After the deal and finan-cial restructuring are com-pleted, MMX will be able to ship 7 Mt of iron ore through Sudeste each year, with an op-tion expiring in mid-2015 to expand operations to handle 13 Mt. MMX will also have the right to increase volumes proportionally in case the new controllers decide to double Sudeste’s capacity to 100 Mtpa.

The mining business of MMX, which last year pro-duced 7.4 Mt of iron ore, will be essentially debt-free after the Mubadala-Trafigura deal is completed, MMX said, without elaborating. MMX had net debt of Rs2.56B at the Q2 2013, according to data compiled by Bloomberg.

Cutting backBatista’s iron ore producer MMX Mineração & Met-alicos SA will suspend op-erations at the Corumba mine for six months, according to a regulatory filing. MMX produced 7.4 Mt last year, with Corumba accounting for about 1.4 Mt and the miner having enough stock to meet sales contracts while saving on mining operating costs, according to the filing.

Batista stepped down as chairman of MPX Energia SA as part of a capital increase agreement with partner E.ON SE, a subsidiary of the Ger-man utility group. The entre-preneur plans to sell assets and renegotiate debt in his companies after losing about US$30B in personal wealth since March 2012 following a series of missed targets and cancelled projects. The crude oil producer OGX Petroleo & Gas Participacoes SA an-nounced that it may shut its only producing field next year. MMX said recently that it is in talks to sell assets or a stake.

Batista has indicated that he could sell his remaining 25% stake in power utility MPX Energia, having already sold a controlling stake in MPX to Germany’s E.ON earlier this year for around US$700M.

Steeled to goThe financial structure of the interconnected port, mining and port related activities suf-fered a further blow in Sep-tember when the steelmaker Ternium announced that it will not proceed with the con-struction of a steel plant in the Açu industrial port com-plex. As a result of Ternium’s decision, all shares held by Ternium in Siderúrgica Norte

Fluminense (SNF) will be transferred to LLX Açu Op-erações Portuárias, subject to regulatory approval.

In September 2010, LLX signed an agreement with Ternium to build an 8.4 Mtpa steel slab mill on a 1,300 ha site at the Açu port using ore from the MMX mines. A sec-ond agreement between LLX and Ternium involved a “take or pay” contract allowing Ternium to use the port to ex-port steel products and import coal to be used as raw material. At the time, the steelmaker se-cured US$500M in tax breaks to build the steel mill, which would have required a total in-vestment of US$5B to US$6B.

The facility has been de-signed to use coal for power generation for the mill, which the Brazilian Environmental Ministry said would be high-ly polluting. Consequently, Ternium has been seeking supplies of natural gas to use as a substitute for coal, but this has not materialised.

The environmental prob-lems, a fragile domestic mar-ket, exacerbated by Thys-senKrupp’s attempts to sell its Steel Americas plant, plus uncertainty regarding the fu-ture of Batista’s interlinked group, have all served to deter Ternium from this project.

Retreating steelGermany’s ThyssenKrupp, put its Americas steelmaker up for sale over 15 months ago, but may now retain its plant in Brazil and sell only its US plant, not because it wants to keep its Brazilian operations, but because of the general lack of interest at the price level the German firm considers appropriate.

Bids for the Brazilian fa-cility have been too low and ThyssenKrupp has accepted that the Steel Americas divi-sion will not realise the €3.4B (US$4.5B) book value and faces a further write-down. Brazil’s Cia. Siderurgica Na-cional SA would probably be the buyer of ThyssenKrupp’s US plant in Alabama, which may fetch about US$1.5B, as it has consistently sought an entry to that market.

ThyssenKrupp’s preferred option remains to sell both plants to CSN and talks are continuing. Steel Americas’ adjusted loss before interest and taxes totalled €162M in the second quarter this year compared with a loss of €262M in the corresponding period last year. ThyssenK-rupp invested almost €12B in the ill-fated Americas plants, which to date have had €6.4B written off. �

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only load cells of this type at a North American Veri-fied Conformity Assessment Program (VCAP) certified facility. This allows its axle pad scales to weigh accu-rately and reliably to 0.25% in temperatures from -40°C to +57°C.

Unlike some manufactur-ers that use thin cable in their axle pad scales, the Canadian company uses heavy-duty cable that can withstand tem-perature extremes without breaking to ensure prolonged use even in cold Canadian weather which can reach -40°C.

“The Massload axle pad scale works fine in -30°C outdoor weather and is hold-ing up to a high volume of use,” said Swystun.

For grain and crop farmers who want to account for eve-ry pound of their product and inputs by the truckload, the good news is that these axle pad scales come in several sizes that can handle even the large tri-axle, B-Train Dou-ble truck rig sizes favoured by Canadians.

For example, while Mass-load’s axle pad scales are all 30in wide and 6in high with an active weighing surface capacity of 30,000-40,000 lb per pad, their 84in long mod-el weighs dual axles and their 144in long model weighs tri-axles.

Canadian farmers Of particular interest to Ca-nadian farmers, the company is the only one in the world that manufactures a 168in long axle pad scale capable of weighing the extra wide tri-axle B-Train rigs popular in Canada – whose axle sec-tions to be weighed can each be more than 12ft long.

While crop farmers may have believed that built-in grain cart spindle scales or volumetric measurements were sufficient, those who turn to accurate truckload, axle pad scale, weighing systems will have the advan-tage. By accounting for every pound of their product and inputs by the truckload, these farmers will add to their bot-tom line much faster than the competition. �

*This article was contributed by Massload Technologies. The views and opinions ex-pressed are not necessar-ily shared by Bulk Materials International. For more in-formation email axlepad@massload.com.

Weighing

BMI September/October 201312

With the size and volume of farms getting larger, of-

ten up to 10,000 acres or more in the United States, even small errors in accuracy of weighing product and in-puts can have a major impact on the bottom line. Yet many farmers are located far from the nearest load scale or rely on grain cart spindle scales or volumetric measurements whose accuracy is often less than desired.

As an alternative, more farmers in the US and Canada are turning to axle pad scales, which allow them to quickly check-weigh product in the truck right off the fields before it goes to market or the grain bin, which can prevent costly overweight load fines. Axle pad scales also enable farm-ers to check-weigh input costs on receipt to ensure ac-curacy, as well as benchmark and optimise productivity by verifying the accuracy of farm equipment.

“Accurately weighing the load on a triple-axle B-Train semi-trailer before it goes to market can prevent an overweight ticket that could pay for the axle pad scale,” said Rod Swystun, owner of a large grain farm, north of Blaine Lake in Saskatch-ewan, Canada. “I use the Massload scale in my farm yard to verify the weight load of semi-trailers going to mar-ket, the accuracy of my field yield monitor, and the capaci-ty of my grain dryer and grain cleaner.”

Bin estimatesThough built-in spindle scales are common in new grain carts and air seeder carts, due to mechanical con-straints in design they are not as accurate as advertised for measuring weight. Also, vol-

umetric measurement of con-tents of grain storage bins is inexact and not of much help to those needing to measure more accurately.

“Volumetric measuring is just ‘guesstimates’ because the actual weight can be misrepresented when there’s chaff and foreign objects in a load,” said Swystun.

For grain and crop farm-ers, it is easy to lose money on weight estimates. Unless there is a check-weigh at the fields before the crop goes to market or to the storage bin, farmers may have no way to detect if key measurements are off or even if the entire load safely makes it to mar-ket or storage.

Volumetric measuring also cannot help farmers to check-weigh their input costs for seed, fertiliser, and other items against the invoice re-ceipt. With the value of crop

farming doubling due to larg-er farms producing greater volumes of product over the last six years, even a small er-ror in weighing can be costly.

Seeding time“What we do at seeding time dictates our income for the year,” said Gordon Spencer, who farms 3,500 acres of wheat, barley, peas, lentils, and canola in Saskatchewan, Canada. “But the manufac-turer’s seed drill output rates were inaccurate so we had to recalibrate everything.

“When fertiliser is C$1,000/t and amounts to a few hundred thousands of dollars during the plant-ing season, you don’t want errors on those rates. Apply too much and it’s wasted, too little and your in-come will be off on that field. Without our own scale to measure output, we estimat-

ed weight because driving to town to use a scale or weigh-ing out pails of grain was too time consuming.”

Trailer weighingA better option for many farmers in the US and Cana-da is to use axle pad scales, which allow easy dual-axle and tri-axle weighing of product in the trailer before it goes to market or the storage bin, as well as weighing of in-puts in the trailer on receipt.

Spencer uses an above ground axle pad scale in a farmyard building to check seed drill rate settings each spring and to check that the combine is recording accu-rate data.

“Once we get seed drills adjusted and set for the prod-uct, it’s quite reliable,” said Spencer. “I got payback on our Massload axle pad scale in one spring planting sea-son. During harvest, we use the scale almost every day to check that the combine is recording accurate field yield data.”

Gathering dataWhile axle weighing systems are not legal-for-trade in the US and Canada, gathering weight data is quick and easy as the vehicle moves axle by axle over dual weigh pads and a total is given. This not only provides a check-weight to assure that all crop gets to market, and a check-weight against grain cart scales, but also a check-weight against input receipts, which can help benchmark input costs to optimise productivity. Use of axle pad scales at the farm can also help speed product to market or storage by mini-mising the time wasted at off-farm weighbridges.

“The accuracy of our Massload axle pad scale is improving our cost of pro-

duction,” said Spencer. “It’s helping us to get the best output with the least input by applying the right amount of seed and fertiliser to maxim-ise our productivity.”

Varying standardsBut not all axle pad scales are constructed alike. To maximise use without pre-mature troubleshooting or replacement, it is vital that certain components be ro-bustly constructed and made to last for prolonged use and severe weather condi-tions. The key components in axle pad scales are its load cells, which are located in the weigh pad platform and convert mechanical energy to electrical energy that is meas-ured to determine weight.

Unfortunately, in some axle pad scales, the load cells are sub-par and not individu-ally tested. Often, these axle pad scales contain load cells that do not extend the full width of the weigh pad plat-form, which makes inaccu-rate measures more likely de-pending on truck axle weight placement. One such model, in fact, contains six small load cells, one in each corner and two in the centre, which makes accuracy dependent on axle weight placement and multiplies the probability of one of the load cells failing by six-fold.

Massload, a Saskatoon, Canada-based manufacturer of quality weighing systems, uses a 26in long load cell in its weigh pad that is essen-tially as wide as the platform. The company says this pro-vides accurate dual or triple-axle weighing, regardless of truck axle weight placement. These weigh pads have a very large weighing surface and low 6in profile, making them an easy method of de-termining truck axle weight. They can be used portably above ground at multiple lo-cations or can be pit-installed for permanent use.

No moving partsSince the company’s envi-ronmentally sealed double-ended shearbeam load cell is fully electronic, there are no moving parts to wear out or adjust. All gauges are in-dividually tested and elec-tronics done at its headquar-ters, which manufactures the

Triple-axle B-Train semi trailers are favoured by Canadian operators

Truckload weighing in demandAccurate axle pad weighing systems, even for large B-Train semi-trailers, are helping farmers account for every pound of product*

Axle pad scales allow farmers to check-weigh product in the truck direct from the fields before it goes to market or the grain bin

Cargo Handling

BMI September/October 2013 13

While enquiries for stacker/reclaimers are steady, there are more worrying

long-term trends that could affect the market, particularly for coal han-dling. The European market looks particularly difficult, with steelmak-ing depressed and little prospect of it improving, even if demand were to rebound. Any increase in steel would undoubtedly be met by imports, un-less the EU introduced tariffs, which may not meet WTO approval.

Europe is also facing a strong en-vironmental challenge, which will make industries such as steelmaking and cement manufacture uncompeti-tive, while coal-fired power stations appear to have a limited shelf life.

Germany is one of the few EU na-tions still building coal-fired power stations and unless its new govern-ment introduces a package of envi-ronmental regulations that do not favour renewables as much, its coal imports will start to decline over the next decade.

FAM secured an order for two 4,000 t/hr stacking, 2,500 t/hr re-claiming bucket wheel machines for the ultra-critical E.ON 500MW power plant at Wilhelmshaven, as well as the circular storage reclaim-ers at the new Vattenfall Hamburg-Moorburg which can handle coal at some 3000t/hr. Both these plants are currently nearing completion, but there are no further German coal plants authorised.

The UK and Scandinavia are not planning any new coal-fired pow-er generation, the Netherlands is building two but moving towards biomass, while Poland is under EU pressure to reduce its coal burning. With European import terminals well equipped, there appears little prospect of new orders in this region other than for replacement units.

Regional restrictionsThe North American market faces a similar scenario. Despite shale gas driving down the price of its coal and leading to greater exports, there is growing pressure on coal-fired pow-er stations with the introduction of a 1100lb/MWh limit on new power stations, requiring them to be some 40% cleaner than current plants. This will effectively stop any new coal-fired power plant development.

The Asian markets for handling equipment currently appear more positive, although coal-burning is starting to come under pressure as air quality deteriorates. It is esti-mated that more than 280GW of coal-burning power stations are in advanced planning stages or under construction, mainly in China and India. These will require some 825 Mt of coal annually.

There are major investments be-ing made or planned in coal produc-tion and export facilities, but it will become more difficult to fund these and who will buy the output? The World Bank has stated that it will provide financial support for new coal-fired power stations “only in rare circumstances” such as cases where countries have “no feasible alternative to coal”.

The European Investment Bank, meanwhile, has announced it will in-troduce an “emissions performance standard” of 550g/CO2/kWh, ruling out more conventional plants, while some of its directors favour a 450g/CO2/kWh, which would rule out the majority. It remains to be seen whether this policy will be extended

Stacking up on past ordersWhile the mining boom and the rush to rampup production may be over, the outlook forheavy plant such as stacker/reclaimers hasreverted to steady demandto coal mines and export terminals.

There are other commodities out-side the core thermal coal market that normally require more special-ised stockyard handling equipment. Takraf India, for instance, has re-

cently secured orders for 16 stackers and scrapers besides various in-plant conveyors in the cement, copper and associated power industries.

The subsidiary of Germany’s Takraf group received an order

has secured an order from City Ce-ment for supply of a high capacity limestone pre-blending system.

With the successful reference of bridge-type scraper-reclaim-ers supplied to Konkola Copper mines, Zambia, in 2006, Takraf has clinched an order from First Quan-tum Minerals Ltd of Australia for its copper mine Kansanshi Mining PLC in Zambia. The order includes the supply of two bridge reclaimers with several added features for handling copper concentrate. The consultant for this project is Worley Parsons, Toronto, Canada.

In another contract from Thermax, Takraf is to supply a luffing stacker and side scraper/reclaimer for a small

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from Mangalam Cement (BK Birla group of companies) for the supply of a luffing stacker and a bridge-type scraper-reclaimer for limestone han-dling for its existing cement plant in Kota, Rajasthan, India.

Negotiations over the past few years with Dalmia Cement have re-sulted in a contract for the supply of four stackers, four scraper-reclaim-ers and nine belt conveyors for its greenfield cement plant in Karnataka and Grinding unit in West Bengal.

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Cargo Handling

BMI September/October 201314

capacity coal handling system for the Thermax-captive pow-er project, placed by the Dan-gote Group in Zambia. This is the fourth project carried out by Takraf for the Dangote Group.

A major contract for Minera Antucoya in Chile has been placed with Takraf, working in conjunction with Tenova Bateman, to design, supply and construct a copper ore handling/processing system and solvent extraction/elec-trowinning plant.

Takraf will provide the ag-glomeration plant, the on-off leach pad and a spent ore han-dling system, including stack-ers and reclaimers. However, the project is currently on hold.

Subbing outMeanwhile, the Material Handling business unit of ThyssenKrupp Fördertech-nik (TKF) is currently near-ing completion of a major subcontract placed by Italy’s Techint Compagnia Tecnica Internazionale to supply four back-stacking portal reclaimers for the Ruwais Sulphur Handling Ter- mi-nal-2 in the UAE. The ter-minal is designed to receive 22,000 t/day of granulated sulphur, which will be trans-ported by rail from Shah and Habshan producers to Ruwais where it will be un-

loaded and exported by ship.The four machines installed

in two different storage build-ings (two per building) rep-resent the key equipment of the new facility. They will be capable of stacking the sul-phur coming from the railcar unloading station, either re-claiming the stored product or by-passing the stockyard to feed the downstream ship-loaders.

Breaking groundThe design of the back-stack-ing portal reclaimers repre-sents a technical challenge as, with a rail gauge of 71.25m, they are not only the largest full portal reclaimers ever built but also the most effi-cient with a stacking rate of 2,000 tph and a reclaiming rate of 4,000 tph.

The portal reclaimer itself is equipped with four scraper booms – i.e. two arrange-ments of main and auxiliary scraper booms mounted on either side of the portal struc-ture and connected together by a knuckle arrangement.

The scraper booms are not only capable of reclaim-ing the sulphur stored in the warehouse but also to stack by-pass sulphur coming from the railcar unloading station. For this purpose, the sulphur flow is fed by a dedicated belt conveyor to the tripper car, towed by the main machine,

run-of-mine iron ore blend-ing yard stacker and bridge type bucket wheel reclaimer, together with an iron ore con-centrate stockyard stacker and bucket wheel reclaimer. For the port site the company will deliver a high capacity railcar dumper, an iron ore concen-trate stockyard stacker and bucket wheel reclaimer, as well as a high-capacity ship-loader.

The mechanical, hydraulic and electrical equipment are engineered and manufactured in Germany and Western Eu-rope, while the steel structures of the machines are fabricated in China. The steel structure and mechanical parts will be manufactured there under permanent quality assurance/control by Thyssenkrupp and then assembled with all me-chanical, hydraulic and elec-trical parts delivered from abroad.

Blending inThe blending yard stacker is designed for stockpiling ROM iron ores in layers with a capacity of 8,300 tph, while the bridge type bucket wheel reclaimer, with a design ca-pacity of 5,600 tph, will feed the concentrate process plant continuously for controlled mixtures of raw materials. Af-ter the process plant, a stock-yard is arranged with a stacker and a bucket wheel reclaimer for buffer storage of iron ore concentrates.

For shipment of the prod-uct a bucket wheel reclaimer takes the stockpiled material back to the conveyor system and further to the railway train loading station. To match the train loading operation, the reclaimer will feed the con-veyor line at a design rate of 6,000 tph.

The iron ore concentrate will be transported to the port by railway for export, with the stockyard serviced by sepa-rate stackers and one bucket wheel reclaimer.

Structured bidEarlier this year, ZPMC signed a long-term coopera-tion agreement with Brazil’s Vale, following similar agree-ments with BHP Billiton and Rio Tinto, although this time not for bulk handling machin-ery but for steel structures.

ZPMC has previously provided grab unloaders for Vale’s operations in the Port of Sohar, Oman, and won the US$114M contract for

the Brazilian conglomer-ate’s 128-barge project at the beginning of 2013. This is claimed to be the largest hull manufacturing contract ever placed, and will allow Vale to shuttle iron ore from its mines at Corumba along the Paraná-Paraguay waterway to the ex-port terminal. The barges will be fabricated in China and shipped to Brazil on ZPMC’s flat top vessels. However, the latest agreement between ZPMC and Vale does not, as yet, include handling equip-ment.

Zooming inThe Chinese group Zoomlion, although better known for mobile construction cranes, is also making inroads into the bulk materials handling market. It has, for instance, recently delivered separate stacker and reclaimer units to Vale for handling iron ore.

The machines are of a rela-tively advanced design with the 35m boom capable of a ±110deg slewing angle and mounted on a four-leg/three-pivot gantry with maximum wheel loadings of 280kN. Gantry drive is through a three-in-one configuration featuring an integrated motor, gearbox and brake with fre-quency controlled travel mo-tors. A vertical planetary gear-box and variable frequency AC motor are employed for boom slewing.

Zoomlion acquired its bulk handling expertise through a US$17.5M acquisition of Foretide HI, which was prin-cipally involved in the devel-opment and manufacturing of bulk material transport equip-ment and systems. Since the acquisition was made, several years ago, Zoomlion has been developing the product line and integrating it into its glo-bal sales and support network.

One of the first of these was to negotiate a sole partner agreement with Team Mate-rial Handling Equipment to handle the Chinese firm’s bulk handling portfolio in Australia.

Equipment designed and manufactured by Changsha-based Zoomlion includes stackers, bucket wheel re-claimers, bucket wheel stack-er/reclaimers, bridge reclaim-ers, portal reclaimers, bucket wheel bridge reclaimers, ship-loaders, ship unloaders, belt conveyors, pipe conveyors and complete material han-dling systems. �

via a splitting/diverting chute arranged at the tripper car.

The sulphur by-passes the machine for direct feeding of the shiploaders or is equally distributed in-between the scraper blades of the two main booms running in re-verse direction and thereby performing an upward motion of the product to buildup the stockpile.

Sizable strengthThis was one of the last con-tracts TKF won under this business unit, which has now been integrated as part of ThyssenKrupp’s strategic de-velopment programme. The two engineering subsidiaries ThyssenKrupp Fördertech-nik and ThyssenKrupp Poly-sius were officially merged in April 2013 to form ThyssenK-rupp Resource Technologies.

With around 5,500 em-ployees and annual sales of approximately €2B, the new company will be one of the world’s leading system sup-pliers for the mining and ce-ment industries as well as the mineral processing and bulk materials handling sectors.

The rationalisation is part of ThyssenKrupp’s restruc-turing, caused mainly by its loss-making steel production projects in Brazil and the US, which have been put up for sale but have attracted no suit-able buyers.

The ThyssenKrupp Re-source Technologies product range includes bucket-wheel excavators, conveyor sys-tems, crusher plants, grind-ing and processing plants, stockyard and port handling systems for bulk materials, as well as cement plants, the latter being the core business of the previous TK Polysius division.

Digging awayIn one of its first materials handling contracts, Thys-senKrupp Resource Technol-ogies has received an order from Serbian state-owned power utility Elektropriveda

Srbije (EPS) in Belgrade to design, supply, install and commission a bucket wheel excavator system. The con-tract is worth over €30M.

The crawler-mounted sys-tem, consisting of type SchRs 1400/3 x28 excavator, con-necting bridge and loading unit, is scheduled to start op-eration at the end of 2015. Ca-pable of handling up to 6,600 m³ of overburden per hour it will be deployed in the Kolu-bara coal basin.

The new bucket wheel excavator is part of the “En-vironmental Improvement Project in Kolubara Mine Basin” investment program, being carried out by EPS to secure and expand electric-ity generation from coal-fired power plants. EPS currently operates five open-pit lignite mines in Serbia in the Kolu-bara and Kostolac coal basins with a total capacity of ap-proximately 38 Mtpa of soft coal.

The ThyssenKrupp contract represents a continuation of existing business relations be-tween the German company and EPS following the sup-ply of a comparable bucket wheel excavator system for the Kolubara/Tamnava-West mine and a spreader with trip-per car for the Kostolac mine.

A further contract for a type SchRs 740 L bucket wheel excavator to mine lignite in the Kolubara/Tamnava-West mine is currently being car-ried out.

Liberian ventureThyssenkrupp Fördertechnik is also heavily involved in the contract placed by Arcelor-Mittal Liberia for engineer-ing, supply and construction assistance of materials han-dling equipment for its iron ore mine and port in Liberia. The contract includes three stackers, three bucket wheel reclaimers, one railcar dump-er and one shiploader.

The materials handling equipment of Thyssenkrupp for the mine site comprises a

Chinese plant manufacturers have gained expertise in the domestic arena and are able to offer competitive products internationally, such as this stacker (left) and bucket wheel reclaimer, ordered by Brazil’s Vale for handling iron ore

While coal usage is forecast to remain strong in the short term, uncertainties over its longer term future create prob-lems for suppliers of heavy handling plant, such as stack-ers/reclaimers, in trying to assess future demand

Cargo Handling

BMI September/October 2013 15

Maintaining the driving forceOne of the more challenging

jobs in electrical engineering is that of the maintenance

electrician at a bulk terminal, either inland or marine. Not only are the majority of motors and drive compo-nents situated in exposed locations, but they are inevitably covered in dust and debris from the commod-ity handled. Furthermore, in marine import terminals, for instance, there are a large number of often diverse systems, such as the grab unloader crane drives, conveyors and stacker/reclaimer motors, each with differ-ent drives and control systems.

More than any other single de-velopment, AC frequency control drives have probably had the great-est impact on the electrical depart-ments of such facilities. The earlier DC drives required physical contact between the stator and the rotor, which called for periodic inspection, cleaning and replacement.

DC drives are relatively simple and cheap and in dry protected conditions perform well. However, in order for the brush gear to be cleaned and changed when worn, an inspection cover is incorporated in the motor. If the cover becomes damaged or is not replaced correctly, dust and mois-ture from the dirty environment of bulk handling facilities will enter the motor, leading to premature failure.

AC motors do not require a physi-cal contact between the motor casing windings and the rotating armature and therefore an inspection plate is not necessary. This simple differ-ence allows AC motors to be fully enclosed and virtually maintenance free, regardless of the operating en-vironment.

However, the speed and output torque of an AC motor is more dif-ficult to accurately control than their DC equivalent and sophisticated software is required to undertake this. Initially, this was expensive, leading to reluctance to incorporate AC drives for multi-motor applica-tions, such as conveyors. However, increasing adoption has seen the cost fall to the extent that DC is now re-garded as obsolete.

Fooling physicsUnlike conveyor drives where speed control is not the main design cri-terion as they operate near constant speed, grab unloader drives repre-sent an interesting application over crane drives. For a grab crane’s hoist and trolley drives, speed and ac-celeration swing between zero and the maximum and back to zero in a matter of seconds, repeated con-tinually during the handling cycle.

DC motors have the advantage of generating maximum torque at zero revs, something an AC motor can-not do without bending the laws of physics. In practice this means that a DC hoist motor can hold a grab over a hopper, for instance, as part of a typical load curve. For an AC motor to achieve the same effect, the motor must be ‘fooled’ with rapid forward/reverse signals to maintain a zero loaded speed.

Gearing upThe next big step in conveyor drive technology will be the in-corporation of gearless drives for conveyor applications in place of multi-motor geared drives. This ap-plication of an existing technology is being introduced for longer dis-tance applications to replace dump trucks from mine sites to process-

20,000kW would require eight tra-ditional 2,500kW drives, which has the disadvantage of reduced overall availability associated with a large number of mechanical components.

The traditional conveyor electri-

cal drive system consists of an elec-trical motor with a gear reducer and coupling in single or multiple drive configurations, often without soft-starting capability. There are sever-al disadvantages when starting and operating belt conveyors with these devices, including, high tension peaks in the belt during start-up, high starting currents in the network

Grab crane hoist drives using AC frequency control require signifi-cantly less maintenance than DC systems

ing plants or rail/export terminals.In the near future, drive configura-

tions for large conveyors with gear-boxes will reach their physical limits. For example, a conveyor system with a drive power demand of more than

Electrical drives are the force behind bulkhandling facilities but operators are seekingfi t-and-forget solutions as more attention ispaid to lifecycle and maintenance costs

The Konecranes AGD Grab Unloader offers you the best lifetime value. A simple, remarkably effective rope reeving design and standard components give you high operational reliability and reduced maintenance. And your drivers will enjoy the good response time of the modern AGD control system.

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Cargo Handling

BMI September/October 201316

the required low frequency of 5 to 8Hz, while they provide a high power factor over the entire speed and load range.

Multi-taskingSingle drives are used if there is only one motor to be oper-ated at the head or tail end of the conveyor belt. They are available for 1 to 4 quadrant operation with diode or ac-tive front-end low-harmonic supply sections.

Multi-drives are highly modular solutions. The same supply sections as for single drives are also available to feed the common DC bus. Re-dundant systems might have two parallel supply sections.

Depending on the conveyor configuration, several inverter sections can be connected to the common DC bus to con-trol individual motors. If there are conveyors in series, the motors at the head end of one conveyor and the tail end of the next conveyor can be con-nected to the same multi-drive.

In April, ABB won an or-der to provide the electrical equipment, including its new gearless conveyor drives, for Codelco’s largest operation in Chile. The contract was awarded by Tenova Takraf as the main contracting party for the conveyor system and ABB’s partner for develop-ment of the gearless conveyor drive technology.

The electrification of the new gearless overland con-veyor is part of an overall US$550M expansion at the El Teniente mine and will allow Codelco to increase convey-ing capacity of the mine to more than 12,000 tph by 2025.

The ABB drive system is designed to feed power back into the grid during electrical braking and regenerative op-eration. This feature, together with the variable-speed drives, will increase overall effi-ciency, availability, reliability and productivity at the mine.

Package dealABB’s scope of supply for the project includes electrical equipment and new gearless drive technology (with 12x 2500kW/56 rpm motors) for the four conveyor flights of the complete conveyor system, one of which is a downhill tunnel conveyor measuring almost 9 km. ABB will also deliver E-houses with pre-installed equipment, air condi-tioning and liquid cooling for ACS6000 drives and synchro-nous motors, the mining con-veyor control program MCCP for main drive control and load sharing, as well as its Extended Automation System 800xA.

The order also includes the

plus greater system and load sharing losses.

Weak pointThe reduction gearbox, how-ever, represents the weakest point in the system. The pow-er rating of the angular gear reducer is limited to some 3.2MW, or 500kNm, while being a mechanical compo-nent, is maintenance-inten-sive as it comprises a number of parts, such as sealings, fil-ters, sensors, oil pumps and re-cooling units. As such, the mean time between fail-ures (MTBF) for a reduction gearbox, either planetary or straight cut conventional, is around three to four years.

Additionally, while the bearings have an operat-ing life of between eight to 10 years, replacing them requires a major system overhaul. The lifecycle of a reduction gearbox is approxi-mately half that of a convey-or systemʼs 20 to 25 years.

To achieve a power rat-ing of 6MW, a conventional geared solution requires up to four high-speed drive systems, each comprising a squirrel cage induction mo-tor, disc brake, couplings, and gearbox, housing such components as motor and gear bearings, seals, preci-sion cut tooth wheels and oil lubrication complete with oil cooling system. The number of wear parts is usually more than 22 and the MTBF is low at around three to four years.

Siemens calculates that us-ing gearless drives instead of standard motor reducer pack-

and easily disconnected from the motor in the case of wear or a fault.

There is a significant differ-ence between the efficiency curve of a gearless motor and those of a squirrel cage mo-tor and wound rotor induction motor. In effect, the higher the power rating of a synchronous motor, the higher its efficien-cy and even at part load down to about 45% of maximum load, the efficiency curve of a synchronous motor continues to increase, whereas that of a squirrel cage motor drops off significantly at 60% of maxi-mum load.

There are several possible drive solutions for gearless synchronous motors, all of which are based on single or multi-drive configurations us-ing cycloconverters or VSIs. Cycloconverters use old technology and have a poor power factor. It is claimed this system pollutes the net-work with high harmonic and interharmonic frequencies that can distort other equip-ment connected to the grid.

However, in collaboration with ThyssenKrupp, Siemens has introduced a new high-performance generation of gearless, cycloconverter-fed conveyor drives designated the SIMINE CON GD. When the demand for power exceeds 3MW per pulley, Siemens considers SIMINE CON GD is the right solution. The com-pany points out that the princi-ple has been proven for more than 25 years, with on-going research and development.

Cycloconverter technol-ogy has proven its high reli-ability over several decades while conveyor belt suppliers are also able to manufacture stronger belts (ST-10,000) that can withstand higher stresses resulting from higher drive power.

Varying the choiceVoltage source inverter drives are by far the most common type of drives of the vari-able frequency drive family. The controller is a solid state power electronics conversion system comprising of three distinct sub-systems, a recti-fier bridge converter, a DC link and an inverter.

The most basic rectifier converter for the VSI drive is configured as a three-phase, six-pulse, full-wave diode bridge. In a VSI drive, the DC link consists of a capaci-tor which smoothes out the converter’s DC output ripple and provides a stiff input to the inverter.

This filtered DC voltage is converted to quasi-sinusoidal AC voltage output using the inverter’s active switching el-ements.

VSI drives provide higher power factor and lower har-monic distortion than phase-controlled current-source inverter (CSI) and load-commutated inverter (LCI) drives. It is considered that VSI drives in single or multi-drive configurations are better suited to gearless conveyor systems. VSI drives operate the motors smoothly and ac-curately during start-up and at

ages will eliminate approxi-mately 40 bearings and eight couplings per conveyor for a two 4.4MW conveyor con-tract it is currently undertak-ing in South America.

There are also spin-off benefits, such as that the re-duced number of mechani-cal components reduces the cost and scope of the spare part holding, particularly in remote applications, while there is a reduction in noise as there is no gear meshing.

A gearless electrical drive system without a mechani-cal gearbox is simpler, with the same 6MW power output achieved with just one drive system comprising a single synchronous motor, increas-ing the MTBF to up to 30 years.

The elimination of numer-ous mechanical and electrical components associated with a geared drive, lowers the maintenance requirements compared to a conventional drive system, for which gear reducer maintenance alone can amount to up to 5% of the mechanical maintenance budget. Lubrication and re-duction gearbox cooling systems, together with their maintenance, are not required with gearless drives.

System reliability and cost savings can be further im-proved by using a bearing-less motor in the gearless drive system. A low-speed 6MW gearless and bearing-less motor, it is claimed, can reduce investment and oper-ating costs by as much as 7% over a 20-year period, com-

pared to a high-speed geared twin-drive system.

Although a bearing-less motor is virtually mainte-nance-free, the main savings come from the significantly lower production losses that are achieved because of the reliability and availability of the drive system.

Gearless benefitsThe benefits of gearless con-veyor drives derive from the four main hardware and software components that comprise the system – i.e. low-speed synchronous mo-tors, frequency converters with voltage source inverters (VSIs), converter transform-er and advanced conveyor control software.

A single 6MW synchro-nous motor has sufficient torque (around >2,300kNm) to attain the maximum pos-sible torque that can be trans-ferred between one pulley and one conveyor belt. The fact that only one motor is required halves the electrical and mechanical equipment required to power and oper-ate the drive system such as the transformer, frequency converter, motor, founda-tions and driven shaft ends.

This not only reduces main-tenance and the risk of fail-ure, it also frees up space and improves access by making it possible to install the disc brake on the opposite side of the pulley to the motor. The interface between the motor and the pulley shaft is located outside the motor, which ena-bles the pulley to be quickly

bus system, conveyor moni-toring and instrumentation, medium- (33kV) and low-voltage switchgears, the mo-tor control centre (MCC) in NEMA standard and uninter-ruptable power supply (UPS). In addition, ABB will also provide one asynchronous motor with a low-harmonic, air-cooled, low-voltage fre-quency converter ACS800, a converter transformer as well as the gearless drive sys-tems, comprising eight water-cooled synchronous motors, four MV low- harmonic volt-age source inverters in multi-drive configuration and four converter and excitation trans-formers. The first deliveries are scheduled for Q3 2013.

Peruvian copperSiemens, too, has secured an order for a gearless conveyor drive, also in South America and placed by ThyssenKrupp Robins for the overland con-veyor system at the Las Bam-bas copper mine in Peru. This will be the second Xstrata Copper mine in Peru to use gearless drives from Siemens following its contract to equip the Antapaccay Mine, again in conjunction with Thys-senKrupp. Start-up of the new conveyor system at Las Bam-bas is scheduled for 2014.

The Antapaccay mine in-stallation comprises two 3,800kW low-speed syn-chronous motors, providing 576kNm of torque to each drive pulley, driving the 1.37m wide, 6,528m long belt. The capacity of the con-veyor is rated at 5,263 tph and operates at 6.2 m/s.

The drive incorporates an air-cooled cycloconverter to provide reliable performance in this remote and mountain-ous area, particularly when very high torque is needed, such as restarting the convey-or at low speed. In the case of one of the two motors failing, it is possible to combine the cycloconverter and the gear-less drive for a period of time to provide twice the torque on one pulley.

The Las Bambas project will employ the same gear-less drive system as is used for Antapaccay’s overland conveyor, although each of the two overland convey-ors is approximately 2.5 km long and with a belt width of 1,830mm.Travel speed is 6.5 m/s giving an approximate capacity of 9,400 tph.

The Siemens drive systems for each of the two overland conveyors comprise two low-speed 4.4MW synchronous motors controlled through the associated Sinamics SL150 cycloconverters. �

Motors and drives employed in bulk handling facilities are exposed to dust, debris and hostile environments which can make regular inspection and maintenance difficult

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Commodity Focus

BMI September/October 2013 17

Biomass put on the back burnerEnthusiasm for biomass firing, particularly at 100% rates, is cooling as European gov-ernments revise their subsidy stances

Essentially, Europe is the only place that currently expresses a tangible interest in burning

biomass for power generation, either at 100% burn or as a mix with other fuels, as part of a package of climate control measures. But this situation is beginning to change as other re-gions investigate its advantages and disadvantages.

Despite being home to the major-ity of the forests that source biomass for European burners, North Amer-ica currently has no interest in this fuel source due to the availability of cheap domestic shale gas. Asian generators have sufficient access to relatively cheap coal, although some regions with high density cities, such as Singapore, are keen to reduce de-pendency on coal in order curb air pollution.

However, as a city state with no natural resources but located in a very heavily forested region, bio-mass generation could make eco-nomic and environmental sense for Singapore, particularly with a neigh-bour like Malaysia keen to extract greater value-added revenue from its extensive palm oil industry.

Palmed offAfter recently creating a National Biomass Strategy (NBS) for 2020, Malaysia is hoping to capitalise on the use of palm oil for high value downstream activities in the bioen-ergy and biochemical industries. The newly formed federal agency Malaysian Biotechnology Corpora-tion (BiotechCorp), operating under the Ministry of Science, Technology and Innovation (MOSTI), has been entrusted to nurture and assist bio-technology companies.

BiotechCorp CEO Mohd Nazlee Kamal explained: “We recognised that we have 5M ha of oil palm plan-tations and we have by-products of empty fruit bunches, trunks and fronds that contribute close to 100 Mtpa of this material. Before this, we didn’t know what to do with the wasted materials. We just basically dumped it back into the plantation. But we realised we could probably use it as a source of energy – as a source of cellulosic sugar – and make more biochemicals.”

Created in November through a collaboration of several organisa-tions and government agencies, the NBS provides a blueprint that could generate MYR30B (US$9.5B) in gross national income by 2020.

Load of rubbishIn 2012, Malaysia generated some 83 Mt of biomass from the palm oil industry, the majority of which was ploughed back as fertilisers. This could increase to between 85 Mt and 110 Mt by 2020, of which biomass production as a fuel source would be in excess of 30 Mt. While some 25 Mt could be mobilised for export at around US$20 to US$80/t (dry weight), Malaysia also has budding renewable power generation plans.

Currently some 1% of the country’s electricity demand is met by renewa-bles, which the government would like to see increased to around 17% of capacity, or 4,000MW, by 2030. An interim target of 800MW, requir-ing some 6 to 7 Mt of biomass burn (dry weight), has been set for 2020.

BiotechCorp estimates the cost of a 100,000 t/yr pelletising plant to be around MYR30M to MYR40M, which should provide a return on in-vestment within five to seven years.

Due to freight costs, it is unlikely that European destinations will fea-ture in Malaysian biomass exports, but it will make the fuel widely available across the South East Asia region.

Asian and European countries op-erate with widely different agendas.

Asian authorities want to curb air pollution, mainly caused by smoke, particularly from coal-fired thermal plants and vehicle exhaust emis-sions. The European stance, howev-er, is to curb global warming, mean-ing politicians become involved with the private sector CO2 emitters.

Malaysia’s approach to biomass differs from European users in that it has freely available biomass and is looking at ways to extract value-add-ed revenue from it, while European users see biomass as an environmen-tal solution that also allows them to prolong the use of existing thermal power plants.

While some smaller European biomass plants can source feedstock locally, bigger plants have a bigger appetite and require pelletised hard wood, normally sourced from US for-

ests. The market is therefore focussed on Europe, with some EU coun-tries more enthusiastic than others.

Degenerating biomassOften, it comes down to a matter of subsidies and emission regula-tions. After starting with consider-able enthusiasm, biomass burning in Europe has now degenerated into a confused political football.

Germany, for instance, under its Energiewende programme, was a very strong advocate of wind, solar and biomass projects after abruptly announcing the closure of its nuclear power plants in 2011. These renewa-bles are eligible for feed-in tariffs

Commodity Focus

BMI September/October 201318

(subsidies) for 20 years, but this has served to make Ger-man electricity 40% more expensive for consumers and 20% more for industrial users, compared to the EU average.

This has prompted the Fed-eration of German Industrial-ists (BDI) to call on the new German government to make its “top priority to reduce the subsidy-driven distortion of the energy markets”.

E.ON has plans for two co-firing coal/biomass plants in Berlin plus one in Hamburg – which have yet to be finalised – as well as one that is going ahead in Belgium.

Belgian burnerFollowing the rejection on en-vironmental grounds of plans for a coal-fired power station in the port of Antwerp, E.ON has instead secured permis-sion to construct a 300MW biomass plant in the port. It will be constructed on the Solvay terminal, which is also

term answer to the country’s energy needs”. He also noted that it has “always been clear that biomass is a transitional technology, to be replaced by other, lower carbon forms of renewable energy in the medium to long term”, by which he was presumably referring to nuclear power.

Subsidy stakesUK policymakers also plan to restrict subsidies for biomass to 400MW per plant through the Renewables Obligation (RO), although restrictions on this form of subsidy will only apply to new projects and not conversions from coal-fired power planned by companies like Drax. “It is new, so-called dedicated biomass power sta-tions that will have a cap on subsidies and not those plants that are switching to wood from coal,” a Drax spokes-man commented. Drax and other large generators switch-ing to biomass from coal will have subsidies phased out by 2027. “This is something we already knew and does not mark a change in govern-ment policy,” the spokesman added.

Drax has been able to proceed with its plans to re-invent itself, now that the regulatory framework is clear with a known level of support – principally one RO Cer-tificate per MWh for a fully converted unit, effective from April 2013, grandfathered to 2027. In the first flush of the biomass boom, it had planned three new biomass plants, sized at 299MW, avoiding the need to be carbon-cap-ture-ready, which kicks in at 300MW. All three projects have now been cancelled, cit-ing “the need for better gov-ernment support”.

The new RO scheme, which comes into effect from 2015, will require new power plants to demonstrate adherence to environmental best practice, including sustainable harvest-ing, biodiversity protection, and land-use rights for indig-enous populations. For the first time, they will also have to carry out an independent sustainability audit alongside their annual sustainability re-port.

The RO scheme will close to new entrants in March 2017, but will continue run-ning in support of accredited capacity for a further 20 years. In practice, this scenario will encourage the development of a larger number of rela-tively small biomass power plants favouring coastal loca-

tions over the conversion to biomass of existing coal-fired plants. It could also lead to a sudden surge in construction of new biomass plants until 2017, after which planning applications and construction will decline considerably.

Britain’s government re-cently announced it intends to limit guaranteed minimum power prices to dedicated bio-mass plants that do not incor-porate both heat and electrici-ty generation under combined heat and power (CHP), or co-generation, projects.

“The lack of a strike price for newbuild biomass means support for this important technology has effectively come to an end and we urge the Government to recon-sider,” said Gaynor Hartnell, CEO of the Renewable En-ergy Association. “Develop-ers cannot simply add CHP to these [already approved] projects retrospectively, so they will most likely be can-celled.”

CHP is considered efficient as heat from power genera-tion is used to warm nearby houses and commercial build-ings. It is widely employed in Europe and Scandinavia, and will feature as part of the new 840kW coal-burning Moor-burg power plant in Hamburg, with 12 km of underground pipes feeding a domestic heat-ing network.

However, if CHP is to be incorporated in a new thermal plant, it must be designed and integrated in the very early stages. Planning permission to dig up roads for the heating pipes alone could take as long to secure as that of the power plant itself.

House warmingIt is considerably easier and more cost effective if co-generation is incorporated at a project’s inception. This is the case with a new plant to be constructed by Denmark’s Burmeister & Wain Scandi-navian Contractor A/S, a sub-sidiary of Mitsui Engineering and Shipbuilding, which has secured a £55M contract to build a 15.8MW biomass CHP plant in Northern Ireland.

The new plant for Evermore Renewable Energy (ERE) in Derry will be fuelled with re-cycled wood and is expected to be handed over to ERE for start-up of commercial opera-tions in mid-2015. The plant will burn an annual volume of around 110,000t of recycled wood, delivered by sea or road. The CHP element of the plant is 6,100kW heat, in ad-

power stations operating, but a mixed solution of replace-ments is required due to the decades of time lag before new nuclear power plants be-gin operating.

The UK has 5,000 wind tur-bines with a total installed ca-pacity of over 6,368MW and is ranked as the world’s sixth largest producer of wind pow-er but still requires a back-up generating solution that can be turned on and off. Wind turbines cost about twice as much as coal-fired plants to install per MW of power, and only now are the true main-tenance and lifecycles costs starting to emerge.

As the true costs of its green policies become apparent, the UK Government appears to be trying to distance itself from biomass burning by tightening subsidy conditions. Britain’s Energy Secretary Ed Davey announced recently that “im-porting wood and burning it as biomass was not the long-

a participant in the Antwerp Biopower project. Most of the wood pellets, wood chips and other biomass to fuel the facil-ity will be imported. When it comes on stream in 2018, the new plant will be the largest biomass generator in Bel-gium, surpassing Electrabel’s Max Green 180MW plant in the Port of Ghent.

While environmentalists generally agree that biomass is a better alternative than their bête noire, coal, it re-mains a compromise solu-tion. One of the main sticking points, apart from its trans-port, is the destruction of large areas of forests.

Biomass is also seen as a means of keeping coal-fired

Pellet supply for large European biomass-burning power plants can be problematic, which is why Drax is construct-ing two pellet plants in the US capable of a combined out-put of around 1 Mtpa

The UK government is imposing more restrictive subsidy requirements to focus on new, lower output plants, rather than the conversion of existing large coal-fired genera-tors, such as E.ON’s 44MW Steven’s Green plant

Commodity Focus

BMI September/October 2013 19

Russian timber, such as this consignment destined for a Finnish paper mill, could be a good source of biomass pellets for European power plants, especially if Finland’s paper industry declines as quickly as some predict

dition to the 15.8MW electri-cal power generated at 11kV, giving the plant an overall ef-ficiency in excess of 40%.

UK burning upIf all the biomass plants that were planned during the UK’s initial subsidy regime had come to fruition, the country would be importing in excess of 70 Mt of wood chips annu-ally. Currently, planning con-sent has been granted for six power stations to convert to biomass, excluding Tilbury B which was closed by RWE Npower in August 2013, hav-ing burned wood pellets from late 2011.

Both of the Ironbridge units were converted to biomass in early 2013, although the plant is scheduled for closure in 2015. The 500MW Unit 1 started to burn 20% biomass in July, while the 300MW Unit 2 has been operating on biomass since February.

Ironbridge’s operating hours were restricted in 2008 under the Large Combustion Plant Directive (LCPD). At the end of January, the plant had just over 11,000 hours of operating time remaining until the end of 2015. Due to the high investment costs re-quired, E.ON does not plan to re-license the station as a bio-mass plant to allow it to run beyond 2015, a spokesman confirmed.

In 2011, the 750MW Tilbury B power station was converted from coal-firing to run on 100% biomass, using sustainably sourced renew-able wood pellets. The plant will run on biomass until its scheduled closure under the LCPD by the end of 2015, or when the remainder of its per-mitted 20,000 hours of opera-tion has been used up.

Decision timeThree other UK plants – Egg-borough, Rugeley and Lyne-mouth – have gained consent to convert to biomass, but have yet to announce when construction will start. Lyne-mouth, which was recently bought by RWE Npower, when the smelter which it fed was closed down, had already obtained planning consent to convert to 100% biomass under its former Alcan owner-ship.

However, while RWE Npower debates the future of the plant, North Blyth Energy Ltd has now been given per-mission to build a 100MW biomass plant at nearby Bat-tleship Wharf, Blyth Harbour. The company is planning to invest some £250m to con-struct a 100MW plant having gained Government approval. Construction is expected to begin in 2014, taking about two and a half years to com-plete. The company is in the process of appointing con-tractors, although no decision is expected until November at the earliest.

Special caseThe 4,000MW Drax power station at Selby – previously the largest coal-fired plant in Europe and now aiming to be the largest biomass plant – is

in the process of converting three of its six power units to 100% biomass burn following extensive trials.

Drax is a special case that defies the current biomass trend. Not only is it large and ex-coal burning, it is also lo-cated inland, posing consider-able logistical challenges for the supply of imported pellets.

It is also a special case in its financial structure. Unlike other UK power plants, it is not owned by a major util-ity, but is a separate company listed on the London Stock Exchange. As it only has one asset and revenue source, it must contrive to maintain out-put and revenue streams in a changing political environ-ment – hence its massive in-vestment in biomass.

Biomass conversion of the Drax coal-fired power station is to be the first green project to receive support from the UK Government’s £40B loan guarantee scheme, announced last summer. The Treasury is to guarantee £75M of debt fi-nancing for the project using the Green Investment Bank and private investment funds. The power station, near the River Ouse in North York-shire, is to use this backing to convert three of its six genera-tors to biomass combustion.

Working outThe three converted units will consume around 7.5 Mt of pel-lets annually. Accordingly the project engineers have identi-fied three work streams: rail reception and dome storage; enclosed pneumatic distribu-tion network; and combustion plant modifications, both to the boilers and turbines.

Schenck Process designed the pneumatic conveying and screw feeder with filter receivers, which includes the use of individual conveying and mill feeding systems, with each conveying vessel equipped with multiple Clyde Process Dome Valves. This specialised valve is designed to operate up to a million times without the need for maintenance.

Because open storage is not practicable, Drax will construct four domes, two of which are now complete. To construct each dome, the outer skin is inflated and then strengthened on the in-side through the application of polyurethane foam, steel mesh and concrete. This work is being undertaken by Shep-herd Construction.

A contract with Siemens to upgrade the turbines is under-way, which has increased their overall efficiency to almost 40%. Peter Emery, Drax pro-duction director, commented: “We have taken the decision to upgrade the intermediate pressure turbines of the three generating units that are to be converted to burn sustainable biomass in place of coal. This will optimise the efficiency of those units by helping to offset any loss in efficiency experienced as a result of the change in fuel diet.” The first module is scheduled to be in-stalled in 2014 with project due for completion in 2015.

In the US, Drax plans to construct two pellet making plants in Louisiana and Mis-sissippi near the forest sourc-es, with a combined capacity of 900,000 t/yr. It has leased a site from the Port of Baton Rouge to develop a biomass pellet storage and export ter-minal.

Wagons rollFor the UK operation, Drax has commissioned a new de-sign of dedicated biomass rail cars, following reliability concerns that emerged dur-ing trials of converted bot-tom dumping coal wagons for carrying pellets. The new units have been designed by Lloyd’s Register Rail and constructed by WH Davis, with the first two sets in the 200-wagon fleet due to enter service during Q1 2014.

These dedicated units will be 30% larger than any other UK freight wagon, with a ca-pacity of 116 m3, giving a load

factor of 71.7t. Tare weight is 30t while gross weight is 103t. Due to the non-flowing properties and light mass of pellets, the wagons will incor-porate a patented product con-trol flow system and a special bottom dump door design op-erated by line-side magnets.

The trains will operate from the ports of Tyne, Im-mingham and Hull, with all three ports making signifi-cant investments in handling and storage facilities for the project. The Port of Tyne, for instance, plans to extend its Riverside Coal Terminal quay for dedicated biomass. Immingham, meanwhile, has inked a 15-year supply con-tract with Drax and will con-struct a 11.5-acre automated biomass terminal able to store up to 100,000t of wood pellets in four storage silos. The ter-minal, to be built by Graham Construction, will also feature two continuous ship unload-ers, around 1.2 km of convey-

or systems, a new automated rail loading system capable of handling the new dedicated

pellet wagons, truck load fa-cilities and extensive safety systems. �

News

ArcelorMittal is ramping up pro-duction at its iron ore operations in Liberia. It is on course to ship 4.5 Mt this year, slightly ahead of the scheme’s official capacity and also in excess of the port’s nameplate handling capacity. The ore is transported by rail to the Port of Buchanan at the mouth of the River St John, where Arce-lorMittal has invested US$75M in upgrading facilities and is by far the facility’s most important customer. The port should han-dle about 130 vessels this year, up from just 18 in 2010.

The rehabilitation of the port and railway is one of the biggest success stories in Liberia since the end of its civil war. A new road has also been constructed between the Liberian capital Monrovia and Buchanan, raising the prospect of Buchanan attracting more general trade from its better known neigh-bour.

Antonio Carlos Maria, CEO of ArcelorMittal Liberia, said that during the dry season midsized vessels are loaded with up to 60,000t of ore to be transferred on to waiting Capesize vessels that carry up to 200,000t.

It remains to seen whether the harbour can be improved in the future to handle larger ships. Fur-ther west in Liberia, Sable Min-ing Africa has received a licence to export iron ore from its Nimba project in Guinea through the Li-berian port of Yekepa.

Buchanan exports increase

Engineering firm Bechtel is pro-moting its new offshore hub port design to be used in Africa. The company describes the Multi-User Offshore Hub model as “a smart terminal and docking system” and a lower cost option for providing new port capacity.

Its offshore situation would pro-vide very deep water that could handle the world’s biggest vessels today and in the future.

Cargo could be taken off the hub by rail using a fixed link or by

barge. Bechtel estimates that the design could reduce construction costs by up to 40% and operating costs by up to 50%.

Unveiling the model at the Afri-can Ports Evolution 2013 Forum in Cape Town, Bechtel’s senior ports specialist Marco Pluijm said: “As existing African ports become more and more congested, increased ca-pacity is an urgent need for both the import of consumer goods and the export of minerals.

“Each requires out-of-the-box so-

lutions to handle as many contain-ers as efficiently as possible and to speed the provision of new mineral export facilities to enable the region to develop its economy.”

Bechtel is currently considering potential sites for the hub in both West and East Africa.

Most analysts regard the Af-rican continent as being last in line for any new technology. Yet a number of relatively recent global innovations, particularly in the telecoms sector, have their

New model for African ports

A consortium of companies based in China’s north-eastern Liaoning province are preparing to invest US$150M to create and manage a special port economic zone at the Russian Pacific harbour of Sovet-skaya Gavan (SG).

Sources close to Liaoning’s Asso-ciation of Sino-Russian Cooperation said the project would involve con-struction of 15 to 20 dedicated termi-nals for handling coal, grain, timber, ore, oil and containers with a total annual capacity of over 50 Mt.

The Chinese group has calculated the project will require 12 km2 of land and US$600M to implement. It is reported that a joint venture with Russian partners is planned to de-sign, build and manage the project, with Chinese and Russian interests holding 25% and 75% respectively.

Initially two berths would be built to handle 50,000t of coal and 100,000t of general cargo. Addition-ally, shipbuilding, shiprepair and logistics facilities would be built, as well as timber and fish processing fa-cilities and an industrial park.

In 2008, Russian authorities grant-ed special economic zone status to SG for 49 years.

Meanwhile, coal producer SUEK plans to expand its SG facilities to increase coal exports from 12 Mtpa to 18 Mtpa next year and to 21 Mtpa by 2021.

China plan for Russian Pacific port

roots in African development.The ‘pay as you go’ model of

mobile services was originally developed to cope with African conditions, while mobile banking originated in East Africa and is still more popular in Kenya than any-where else in the world.

As a result of these successes and Africa’s growing economic suc-cess, some companies are develop-ing new technology to meet African challenges, with a view to its poten-tial use elsewhere in the world.