TRAINING

From start to finish the project took 14 months.

CREDIT: UTC

The introduction of Covid-19 safe practices initially threatened delivery schedules, but the project was still delivered on time. CREDIT: UTC

faced a range of challenges due to the arrival of the Covid-19 pandemic.

“Social distancing, travel restrictions, lockdowns, curfews and uncertainty about the future of the economy were some of the challenges that Gebr Pfeiffer faced,” Pradet noted, adding that the “extraordinary efforts” of the teams involved ultimately led to a positive outcome for the project.

When the first plans for the project were announced in 2018, the prospect of a global pandemic was not something that any of the partners were expecting. But by the time the cargo was ready to be moved in early 2020, supply chains were facing serious issues and availability of staff and resources had shifted dramatically.

“The introduction of safe practices during the very first weeks of Covid-19 threatened delivery schedules from the outset,” Pradet said. “Coordinating work with sub-suppliers, which for a while did not have access to important documentation, proved frustrating. Fortunately, in good time, everybody learned to work remotely and efficiently.”

Despite the huge change to global supply chains, UTC was well prepared, having spent months researching the various risks and identifying alternative measures to ensure flexibility.

“During the project, we faced the limitations caused by Covid-19 in all ports, and we also encountered a hurricane. But, again, everything was planned, and risks were measured,” Chittoni said.

Cargo from Germany, Italy, Spain and Turkey was finally able to be loaded at several European ports and the majority was shipped directly to the port of Progreso in the north of Yucatan.

“Necessary personnel were in place to lift signs, signals, cables and lines. Safety measures were of the utmost importance, and Covid-19 protocols required adjustments with short notice,” a spokesperson from UTC Mexico explained.

CLEAR COMMUNICATION

Given the scale of equipment required to construct the new plant, a total of 800 truckloads of cargo were delivered to the site. Ensuring that these loads all arrived on time and intact required outstanding communication between the partners. For UTC, this involved close partnership between its various regional offices to ensure every step of the delivery went flawlessly.

Chittoni explained that information management was a “crucial aspect” of the project. “For example, we don’t use emails to communicate the status of the shipments with our clients. Instead, we use our own IT platforms to provide information and serve as a depository of documents.”

While these IT systems were able to guarantee internal consensus, the bespoke nature of this project also required UTC to develop new means of information sharing.

“The client demanded tailor-made solutions for managing the information of their project,” Chittoni said. “As a result, we designed a web page-based on SharePoint, allowing all the stakeholders to access it at many different access levels. Thus, all the interested parties had real-time access to the status and documents, allowing the engineering and logistics department to focus on their main stacks, instead of spending time in repetitive tasks, such as trying to search emails for finding out the status of a shipment.”

The use of electronic information sharing also helped Gebr Pfeiffer in the construction phase when travel restrictions made on-site inspections impossible. In response, the firm introduced electronic systems that proved highly effective, with new remote assistance functionality helping to drive forward the tasks of optimization and commissioning.

“Foreign technicians were not able to travel to Mexico in all the planned phases,” Pradet said. But he noted that the necessity of switching to new remote systems actually helped the teams discover that “there is no such thing as too much communication.”

From start to finish the project spanned 14 months and with the final cargo delivered, construction was finally completed in mid-2020. Elementia inaugurated the US$25 million Progreso site in the third quarter of 2020, adding a production capacity of up to 250,000 tons of cement per year and creating 450 direct and indirect jobs.

Speaking at the commissioning ceremony for the Progreso plant, Yucatán region Governor Mauricio Vila Dosal said: “The inauguration of this plant goes hand-in-hand with our vision of generating balanced economic growth, that is, that there are job opportunities not only in Mérida but throughout the state.”

Alongside this project, UTC also partnered with Gebr Pfeiffer for a second project in Mexico at the same time, delivering cargo for the Quetzal plant on behalf of Holcim México. Located in Umán, near Merida, this new grinding facility is based on Gebr Pfeiffer’s MVR 3350 C-4 mill and now complements the Progreso facility.

“The plants provide a combined cement capacity of 1.1 million tonnes per year to the local construction market and a significant economic stimulus during a challenging time where it is necessary to revive the local economy,” Pradet concluded.

Based in the UK, Malcolm Ramsay has a background in business analysis and technology writing, with an emphasis on transportation and ports.

SUPPORTING PORT INFRASTRUCTURE

While the small port of Progreso is primarily a passenger cruise destination, it also accommodates a container terminal operated by Dutch port operator APM Terminals and offers some limited multipurpose handling.

Located 36 kilometers north of the city of Merida, the port sits at the northwest head of the Yucatán Peninsula and has deep-water access with a channel depth of 12.2 meters. Having determined that this site had the necessary infrastructure to unload the cargo, UTC arranged charter vessels to collect the various components in Europe and coordinated logistics with APM staff to ensure seamless discharge upon arrival in Mexico.

“APM Terminals Yucatán has a highly qualified team that operates 24 hours a day in eight-hour shifts, 365 days a year,” a spokesperson for APM said. “The terminal provides stowage, and loading and unloading of goods between various types of transport.”

Covering more than 11 acres, the port features one berth with draft of 9.75 meters and 273 meters of quayside, and a second berth with 7 meters draft and 217 meters of quayside. The landside infrastructure also includes one Panamax portable crane and two mobile harbor cranes.

Thanks to the careful preparation by UTC and partners, the port infrastructure had been carefully vetted and onward transportation was closely coordinated with local authorities.

“The delivery of some 4,500 tonnes from Europe to a very small port facility in Yucatán would present a logistical challenge even under normal circumstances,” said Rodney Pradet, project manager at manufacturer Gebr Pfeiffer Americas USA. “Container vessel sailings were drastically reduced because of Covid-19, so keen logistics planning was key to guaranteeing space on board [but] many cargoes were consolidated in four charter vessels.” BB

The cement plant has added production capacity of up to 250,000 tons of cement per year and created 450 direct and indirect jobs.

CREDIT: UTC

CARGO LENS

CONFUSION ON COAL

To take an overview of the global mining sector is to find numerous stories: of high demand for coal but green pressures and investor reluctance; of high demand for copper required for low-carbon technology but investor uncertainty; of projects delayed by Covid-19 and now gathering pace; and of a new phenomenon of renewable energy projects being built on the site of former mines.

Last year saw investments in mining soaring, and the expectation is of more to come. That means increasing demand for the movement of mining infrastructure components, vehicles, power generators, pumps, dumpers and giant tires, to name a few.

According to the Global Energy Monitor’s Global Coal Mine Tracker, new coal mine proposals in January 2022 equated to 1.94 billion tonnes annual production capacity, with China, Australia, India and Russia dominating that volume.

The largest new coal mine projects include Siarmal in India, with annual production capacity 48 million tonnes per year; the Galilee and Carmichael projects in Australia; and the VostokCoal-Diskon project in Russia. Expansions and upgrades include Alpha North in Australia (30 million tonnes), and China’s Shengli East (stage two, 20 million tonnes and stage three, 30 million tonnes).

The world’s state-owned enterprises, with majority government interest, remain the major sources of new coal mine projects and expansions – especially in China and India, said Ryan

A Tale of Many Parts for Dirty Commodity

BY FELICITY LANDON

The 19,000 dwt AAL Fremantle discharging 22,400 cbm of Chinese manufactured mining plant components in Western Australia for the Eliwana Mine & Rail project.

CREDIT: AAL SHIPPING

CARGO LENS

Driskell Tate, Global Energy Monitor researcher.

For private and investor-led projects, Australia and Russia head the table – but in Australia, many mining projects are struggling to secure financial close. “In 2021, Australia shelved 103 million tonnes of proposed mining capacity and downsized ongoing projects by 37 million tonnes. Meanwhile Russia’s newest projects, primarily intended for export to Asia, are now in a shambles because of the war in Ukraine,” he said.

Without a doubt, says Driskell Tate, investments in new mines are at odds with Paris climate targets for 1.5 degrees, which require a phase-down in coal production of 11 percent each year. “It’s also at odds with the International Energy Agency’s Net Zero 2050 roadmap, which requires no new mines or mine expansions,” he added.

It is difficult to find investors willing to put their name behind mining projects, said Driskell Tate, although this can be circumvented because mining companies can raise finance without specifying particular projects.

“In Australia, so many mines have been shelved and cancelled – they have done the exploration, assessed the resources and lined up potential operators and the project just can’t get into production because they can’t get the finances.”

There is often a huge political incentive for politicians in Australia, the U.S. and elsewhere to support the coal industry, he noted, “but at the same time they are up against a market not necessarily telling the same story. In the U.S. we have had so many coal companies go bankrupt in the past five years – it has been quite astounding.”

Physical access to a new mine development is also a challenge. For example, in Australia there are a half-dozen other projects in the same region as the proposed Carmichael development, all on hold because they are dependent on being able to use the railroad access to Carmichael. “These projects are all backlogged, hoping for the railroad to be built – or they can’t get the coal out.”

Ryan Driskell Tate

Global Energy Monitor

APPROVALS COMPLICATIONS

Marc Willim, general manager for AAL Shipping, agreed that environmental concerns are growing. “Everything is getting more complicated to get approval for transport,” he said. “Some of the coal mines in Australia are very close to the Barrier Reef and that has caused some impact on how much traffic is allowed for exports. On the one side it is getting more difficult to build or expand coal mines, and on the other side they don’t really have the finance to do so.”

This would also apply to any plans to build new coal-fired power plants, he added: “There would be massive issues getting financing.” Because of its trading pattern, AAL’s main involvement in mining is limited to Australia. “We have regular services and carry large pieces – some for mining and some for mining-related port infrastructure,” Willim said. “We recently carried some big ship loaders from Asia to Australia – fully erected, weighing a few hundred tonnes, a substantial deck cargo. We also carry conveyor belts, either to load mining products in port or for mining activity. We are also engaged in bringing spare parts, mining trucks, big tires and all kinds of mining equipment.”

Last year was a very strong one in the global market for high and heavy machinery – and demand for mining machinery was no different, said Robert Berg, market intelligence and finance manager at Wallenius Wilhelmsen.

“Global exports of mining machines shot up approximately 50 percent from the Covid-induced trough in 2020 and, with the exception of the coal-driven strength leading up to the last peak in 2018, one would have to go all the way back to 2014 to find similar volumes,” he said.

“With our significant market presence in transporting this type of equipment, we also benefited from this strong momentum. We experienced strong volume growth in all our major trade lanes, with rebounding demand across Europe, North America and Oceania. We also saw significantly increasing appetite for machinery in South America. Similarly, growth was geographically broad in terms of export regions.”

Marc Willim

AAL Shipping

STRENGTH EXPECTED TO CONTINUE

Berg said that in the near term, he expected demand to remain strong. “Due to the supply strain caused by the pandemic, our customers are reporting solid order backlogs, which would help carry demand in the time ahead. At the moment, it’s all about meeting the strong demand out there for both us and our customers.”

WW does not expect any material shifts in terms of the type of mining machinery cargo it carries in the near term, Berg said. “There will always be a demand for parts and components for servicing and maintenance, and we certainly welcome what we are seeing in terms of miners wanting to replace what has now become an aging fleet. We believe there is more runway in this replacement cycle,” he said.

While some commodity prices were already at decade-high levels, the conflict in Europe continues to push prices upwards, which may result in even further increased capex activity, Berg predicted. “There has been an increase in activity in commodity sectors such as the gold segment. On behalf of AAW Projects (Metso Outotec), WW Group recently supported the carriage of a ball mill plant from Italy into Queensland for a gold mine expansion project.”

The 19,000 dwt AAL Nanjing transports a cargo of ‘petals’ (mining plant components) in South East Asia.

CREDIT: AAL SHIPPING

As well as plant and processing equipment, WW is seeing an increase in mining consumables being shipped via roll-on, roll-off rather than the traditional container mode – for example, conveyor belting and plant equipment parts such as slew rings and drum hoists, Berg said.

Overall, sourcing points of mineral processing equipment is ever-changing and this sometimes brings in more complexity, moving away from established supply chains, he noted. “The WW Group through Armacup are, for example, able to offer solutions from China into Oceania to support such sourcing shifts.”

MORE OPPORTUNITIES

Container line Hapag-Lloyd has become increasingly involved in mining shipments as it has pushed for special cargo in general, said Sarah Schlüter, Hapag-Lloyd’s senior director, niche

SPLIT COAL PRODUCTION OUTLOOK

Global Energy Monitor’s Ryan Driskell Tate described a “growing chasm” in global coal production – with state-owned enterprises in China and India committed to new developments, but many private and investor-owned firms seeking ways to offload thermal assets and diversify portfolios in renewables.

Peabody recently announced plans to pursue solar projects on former coal mines, he pointed out; Global Energy Monitor is starting to track projects where renewable energy infrastructure is being built on abandoned coal mines or facilities.

There is an advantage in doing that because a lot of infrastructure is already in place, it’s unlikely there will be land use disputes to deal with and few would argue with using industrial brownfield sites for solar power projects. “It makes a lot of sense; it will be interesting to see whether others follow,” Driskell Tate said.

“Globally, there’s a downward trend in the number of projects moving from exploration into production. The environmental perspective is that these closures and wind-downs aren’t happening fast enough. But small and midsize coal companies continue to pursue new projects and remain more bullish on their projects than some banks and investors.” products. “I think there are definitely more opportunities,” she said. “We are moving quite a bit of mining equipment – mainly to Australia and South America, including Brazil, Chile and Peru, and also some to Africa.”

There are challenges, she said: “All that equipment is going to places where there is often nothing else. The issue we have is a whole lot of equipment goes in, but no business goes out; also mining operations tend to be in parts of the world not super well-connected, so it usually involves transshipments as well, so higher costs. It is challenging for us to get the boxes out again – we have to reposition them empty most of the time as you cannot really get a circular flow in place.”

Overall, she said, mining offers attractive business in that it has a lot of volume, but it comes with the downside of the carrier being exposed to high costs.

Hapag-Lloyd recently carried tires for large mining trucks and a consignment of mining truck dumpers measuring 10 by 12 meters. “We carry a lot of breakbulk cargo related to mining, including machinery and parts for the vehicles working in the mines.”

For Santiago de Chile-based logistics firm Integral Chile, the focus is on copper mining, where there has been some hesitancy over new investments due to the change in government. “Many investors were waiting to see what the new government’s policies would be regarding mining and other infrastructure projects,” said Rodrigo Izquierdo, deputy general manager. “However, while projects may have stopped, been delayed or put on standby the regular mining activity continued, even when we had full lockdown. They can’t stop because Chile’s main income is from copper.”

Chile is the world’s No. 1 copper producing nation. For the general picture, it is important to differentiate between new and ongoing projects, Izquierdo said. “Regarding the first, there is a lot of investment that has stopped, put on standby or just delayed, because of the high risk of the Covid19 crisis, and ever higher freight costs that made many projects unviable and the hardware unavailable. On the other hand, ongoing projects are usually long-term and many can’t be stopped, so materials, machines, spare parts, vehicles and other kinds of cargo, are

Proposed Coal Mines by Country

Country Proposed Projects Projects Projects Projects New Multi-Stage Projects Announced Under Permitted Under Mine Expansion Recommission Development Exploration Construction Projects Projects Projects Projects

Australia 53 9 25 14 5 27 21 4 4 Bangladesh 3 3 0 0 0 2 1 0 0 Botswana 3 1 1 0 1 1 2 0 0 Brazil 1 0 1 0 0 1 0 0 0 Canada 13 2 10 0 1 11 2 0 0 China 169 2 1 27 139 133 36 0 18 Colombia 3 0 1 1 1 3 0 0 0 Czech Republic 1 0 1 0 0 0 1 0 0 India 67 3 57 5 2 62 5 0 1 Indonesia 12 2 5 0 5 9 3 0 0 Kazakhstan 2 2 0 0 0 0 2 0 0 Laos 1 0 1 0 0 1 0 0 0 Malaysia 1 0 0 1 0 1 0 0 0 Mongolia 5 2 3 0 0 5 0 0 0 Mozambique 5 3 2 0 0 3 2 0 0 Myanmar 1 1 0 0 0 1 0 0 0 Niger 1 0 1 0 0 1 0 0 0 North Macedonia 1 1 0 0 0 0 1 0 0 Pakistan 1 1 0 0 0 0 1 0 0 Poland 2 0 0 1 1 1 1 0 0 Russia 69 29 17 10 13 29 39 1 8 Serbia 2 2 0 0 0 0 2 0 0 South Africa 22 3 13 2 4 17 4 1 0 Turkey 5 1 3 0 1 5 0 0 1 Ukraine 1 0 0 0 1 1 0 0 0 United Kingdom 1 0 1 0 0 1 0 0 0 United States 14 1 6 5 2 9 5 0 0 Uzbekistan 2 1 1 0 0 1 1 0 0 Venezuela 2 2 0 0 0 2 0 0 0 Zimbabwe 2 0 0 0 2 1 1 0 1

TOTAL 465 71 150 66 178 328 130 6 33

Source: Global Coal Mine Tracker, Globalenergymonitor.org

still needed, and freight forwarders are doing their best effort to fulfil this need. Integral Chile participates in different projects – some inside the country, and some with other countries as origins or destinations.”

Last year Integral Chile participated mainly in industrial and construction projects, he said. “But in our domestic division, we have customers that are mining companies and other important suppliers of the sector, such as equipment or machinery, or certification companies that send time-critical samples to laboratories.”

MAKING COPPER CONTACTS

The copper industry can be difficult to access direct as mining companies often have their own freight forwarders or freight contract rates, Izqeuierdo noted. Integral Chile usually participates by working with other cargoes related with the industry. “For example, we have recently moved 22-tonne power transformers and 5-tonne water pumps, both in the north of Chile and regarding mining sites. We handle that kind of cargo on a more-or-less regular basis.”

Government proposals to raise royalties on copper sales are still up in the air, but Izquierdo said regardless of whether this new tax regime starts or not, the mining industry is so important to Chile that it would not stop. “Some mining companies may try to be more cost-efficient and that’s where we enter. Not to offer lower prices, but to provide a betterover-peers service, so projects can be fulfilled in a very reliable way. After all, logistics and transport companies are a very important component of the value chain within this industry,” he said.