Export & Financial
Introduction
Less than half a mile from the United States border, Canada’s largest coal export facility, Westshore Terminals, is a busy part of the Roberts Bank port complex in suburban Delta, 32 kilometres south of downtown Vancouver.
Westshore is the largest single bulk exporter in the newly-formed Vancouver Fraser Port (an amalgamation of Vancouver, Fraser River and North Fraser ports) and is the busiest coal export facility in all of North America.
Westshore occupies 133 acres (54 hectares) of land at Roberts Bank in suburban Delta. Its only neighbour is Deltaport, the largest container terminal in Canada.
Offering two deep-sea berths capable of handling vessels of up to 260,000 deadweight tonnes – massive ships up to three football fields in length – Westshore operates nearly 24 hours a day, seven days a week. It is a demanding pace which involves 200 full-time employees (plus the equivalent of another 50 full-time employees on a casual basis) on a three-shift roster to keep the coal moving.
Westshore Improvements
Westshore is well into a two-year, $49 million equipment upgrade which will improve equipment and add another five million tonnes to its throughput capacity, taking it to 29 million tonnes a year when the final phase is completed late in 2009.
This fourth major improvement project in Westshore’s 37-year history has completed Phase 1 which saw the installation of new conveyors. Phase 2, which will involve the replacement of a rotary dumper barrel used in coal car unloading, is set for July 2008. The replacement will enable all three rotary dumper barrels to handle the shorter, lighter aluminum coal cars now being used as the rolling stock of choice by North America’s major railways.
The final phase will see the installation of a fourth stacker reclaimer – the huge machines which stockpile coal on site and later reclaim it for loading on board large dry bulk carriers. Full commissioning of this stage is expected by late 2009.
As a bonus during the project phases, an initial capacity boost of about 1.5 million tonnes will be gained through the conveyor upgrade and the dumper replacement phases, with the rest being achieved through the addition of another stacker-reclaimer.
Metallurgical Coal and the Steel Industry
Most of the coal handled by Westshore is metallurgical, which is used by the steel mills of the world in the manufacture of high-quality steel. How the world of steel goes, usually decides the fortunes of our coal mine customers. World crude steel production hit a record 1,321 million tonnes in 2007, up 7.3% over 2006. Another vital indicator, pig iron production, was up 12.8% year-over-year as the world’s steel mills were kept busy.
The steel industry is expected to remain strong in 2008, propelled by growth in steel production by China, Brazil, Russia and India, while Westshore’s more traditional market, Japan, also had a record year.
Difficult supply conditions in Australia – the world’s leading supplier of metallurgical coal – are expected to drive prices higher in the coal year beginning April 1, 2008 and have heightened interest among buyers for the Canadian product. Westshore is the principal outlet for metallurgical coal (also known as hard coking coal) for the Elk Valley Coal Corporation, the world’s No.2 ranked supplier of steel-making coal.
A record US$125 a tonne was paid for metallurgical coal in 2005, but experts predict prices well in excess of that level in 2008. In 2007, Canadian coal mines received on average US$94 a tonne for their metallurgical coal exports.
Interest in Canadian thermal coal used for electricity generation is also increasing, and spot market prices reached records as 2008 opened. West coast coal from Canadian mines is particularly low in sulphur and this is a major bonus for a world going green, but needing coal to provide over 40% of the world’s population with their essential electricity needs. Research into cleaner burning coal is also stepping up in Canada, the US and other countries, to lessen the impact of emissions from coal-fired power stations around the world.
With its equipment upgrade underway, Westshore expects to be well-placed to meet increasing customer demands for more throughput for both metallurgical and thermal coal in future years. New business opportunities are being explored involving petroleum coke shipments from the oil sands of Alberta and thermal coal from the Powder River Basin coalfields in Montana and Wyoming.
