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Weekly UpdatesAn expanding corporate player could be the impetus Sault Ste. Marie needed to finally build a deep water port.
Despite slumping world steel markets, Essar Steel Algoma is determined to double its annual production to four million shipped tonnes.
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With the Mumbai, India-based conglomerate building a new mill in northern Minnesota with plans to send steel slabs to the Sault for finishing, a critical piece of infrastructure will be upgrading and expanding its dock facilities.
The city has never had public port facilities despite being located on one of the world's busiest marine highways on the Great Lakes.
It's only harbour is private, and it's operated by Essar Steel Algoma.
During an industry slump in the late 1990s, the steel maker, then known as Algoma Steel, was doing it's best to drive away any outside business from using its dock facilities.
Now under new ownership, it's had a change of heart.
The company commissioned engineering firm SNC Lavellin last fall to do an analysis as to what expansion is required.
Stenta said existing dock space is maxed out with 485 vessel passages annually.
Essar handles millions of tonnes of incoming raw material such as iron ore pellets, coal, limestone, steel slabs and scrap steel, and ships out steel coils, mill scale, slag and coke.
With expansion coming, Essar wants to boost their vessel traffic to 1,450 vessels a year. But there are significant and long-standing logistics hurdle in the way over the company's nine docks.
Essar's export dock facility on the St. Mary's River channel is at 28-foot Seaway draft. But closer in at its main slip, the draft there is only 25 feet. It means self-unloading vessels bringing in raw material can't load to full capacity
Dredging and blasting the channel over the Vidal Shoal will be needed.
No price tag for this expansion has been attached, said Stenta, and Essar, with the City of Sault Ste. Marie, is looking to Ottawa and Queen's Park to chip in on a cost-sharing arrangement under economic stimulus funding.
The dock proposal also has a regional flavour. Neighbouring Tenaris Tubes and other undisclosed businesses have an interest in expanded port capacity.
"The (city's transportation) group sees this as an important economic stimulus for Northern Ontario," said Stenta.
Essar already has a contractual agreement with Tenaris, which uses the dock regularly to import tube rounds from South America.
"We haven't gotten into the detailed engineering because this is a costly endeavor and we wanted to be sure there was support for this project," said Stenta.
"Once we are assured there is broader support and funding for a deep sea port, than we can move forward."
Essar and the city's multi-modal committee have had discussions with federal Industry Minister Tony Clement and senior government officials.
"We've explained the proposal and outlined the opportunity for them," said Stenta. "They've been quite receptive. We were optimistic it would come through in the economic stimulus packaging."
Clement met with Essar senior management at their Mumbai headquarters during a February trade mission to India to discuss further Canadian investment opportunities.
"The need is already there," said Stenta. "If we get underway as soon as possible, Sault Ste. Marie and the whole region would be in a position when the markets improve."
Preliminary plans are to upgrade and expand the current iron ore dock. Further expansion would occur on the west end of Essar's property away from general steelmaking operations and close to its export dock.
It would likely include a finished product dock and warehousing, said Stenta.
Essar would provide public access with rail and road infrastructure.
How this expanded operation would be managed, though a port authority or vessel scheduling agency, hasn't yet been been determined.
www.city.sault-ste-marie.on.ca
www.algoma.com
By IAN ROSS
Northern Ontario Business
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