Business News
The Chronicle Herald
January 24, 2012 - 8:39pm By ROGER TAYLOR Business Columnist
Melford officials undaunted by decline in port traffic
A slowdown in container traffic handled at the Port of Halifax last year has not discouraged the group planning a $350-million ultra-modern container and logistics operation in Melford, Guysborough County.
“If Halifax is losing business, it’s losing business to ..... some other terminal out there,” says Richie Mann, marketing vice-president of Melford International Terminal Inc. in Halifax.
“If there is a Melford, then maybe we have an opportunity to offer something from Nova Scotia, from Eastern Canada, that will attract carriers from the Indian subcontinent and from other places in the world.”
A total of 410,649 TEUs (20-foot equivalent units) passed through Halifax last year, which was a 5.3 per cent drop in containerized cargo, compared to 2010.
Part of the decline could be attributed to companies like Green Alliance stopping a weekly Southeast Asia-Suez Canal express container service in September. French shipping line CMA CGM also suspended its Black Pearl container service linking Halifax to its hub port in Jamaica. Zim Integrated Shipping Services also cut back to one call per week in Halifax.
The decline in container traffic was not universal; rival Port of Montreal recently reported a four per cent increase in containerized cargo during the same period.
The financing for the Melford project is already in place and it’s just a matter of time before construction begins, according to the company. When Melford is up and running in the next two to 2½ years, it will be searching for new business.
Funding for the development is coming from the private sector, including Deutsche Bank, the parent company of Maher Terminals, and Cyrus Capital Partners. The group is currently lining up carriers and cargo owners who will commit to utilizing the Melford operation.
“There’s not much we can say except that this project is not intended to compete with Halifax,” says Mann.
“We haven’t targeted cargo that’s coming to Halifax; we’ve never done that. We are not responsible for any of the business Halifax has lost to date; we’re not responsible for any of that.
The Melford plan has always been to look for new business not calling on the east coast of Canada and that’s what the Melford group will continue to focus on, he says.
“There’s going to be sceptics, we understand that. The good thing about this project is the people in the industry that understand the industry understand what Melford is all about. It’s easy for people who don’t understand the industry to ..... infer certain things but the people in the industry do get it, they do understand, and if this project did not make sense, those people would have told us to go away a long time ago.”
The original plan for construction of the terminal was for it to have started in the fall of 2010, but the recession of 2008-09 forced the Melford backers to wait for better global economic conditions. Last summer, the provincial government extended the deadline for Maher Melford Terminal to close the deal to purchase 127 hectares of Crown land from the province until Oct. 23, 2012.
Mann says Melford is going to happen because it makes sense.
“I think what’s happening today in the global economy, particularly with a focus on container trade, is that these carriers are taking ownership of the mega-vessels, which have been on the order books and are being delivered, and we all see ..... the trends of what’s happening.”
Melford is gaining more attention in the shipping sector, he says, because it could accommodate the new crop of extremely large container vessels being built without having to deal with bridges or concern about water depth, and there isn’t any ice during winter.
The plan is to employ the same operating model as the Prince Rupert, B.C., terminal operated by Maher that has a reputation for efficiency.
“If you look at what’s happening in Prince Rupert ..... with the vessel-to-rail transfer taking place immediately when the vessel comes in, that’s a unique situation and obviously a tremendous opportunity. It reduces the number of times you handle a (container) and, well, we all know the more you handle boxes, the more the cost of transport goes up.”
The Chronicle Herald
January 24, 2012 - 8:44pm By JOHN DEMONT Business Reporter
Erdene mulls construction of marine terminal
Guysborough County facility would be used to ship crushed stone to U.S.
A junior mining company in Halifax is considering whether to build a new marine terminal in Guysborough County aimed at providing building aggregate for the recovering United States construction industry.
If the project goes ahead, Erdene Resource Development Corp. would build a terminal in Black Point to export crushed stone from quarries in the area to the U.S. eastern seaboard.
“The project is moving through the environmental assessment process and is still in the early stages of feasibility,” Erdene president and CEO Peter Akerley said Tuesday.
It will be at least a year before the company has all the information to make a decision on whether to go ahead, he said.
Erdene is also contemplating a corporate reorganization in the hope of boosting its stock price, which hit 45 cents on the TSX on Tuesday, down three cents from Monday.
The exploration company is reviewing several options, including spinning off its promising Mongolian gold prospects, to give investors what Akerley calls a “clear investment proposition” in the hope of putting some bounce in its stock price.
“Investors don’t go into a junior mining exploration looking to buy a basket of goods,” Akerley said. “They want a specific commodity focus.”
As a result, Erdene is contemplating putting its Mongolian gold assets into a separate company, the shares of which would be divided out to Erdene shareholders, who would end up with stock in both entities.
Erdene has been exploring for copper, gold and molybdenum in prospects in southwestern Mongolia near the Chinese border since 2009. In December, Erdene raised $2.2 million through a private equity placement with Mongolian investors for exploratory drilling on its Mongolian properties.
If the reorganization under consideration came to pass, the parent company would then hold all of the company’s North American assets.
Erdene owns a 138-hectare property in central Georgia that has just started mining, processing and selling aggregate for the U.S. construction industry.
But it’s more important assets would be closer to home. Erdene holds a 25 per cent stake in Xstrata Coal Canada Ltd.’s plan to develop the Donkin coal field in Cape Breton.
Mining giant Xstrata is planning a $300-million, 2.75-million-tonne-per-year coking coal operation at the Donkin site, assuming environmental watchdogs give it the go-ahead.
The Black Point operation would also likely stay with the parent company.
The Chronicle-Herald
Front, Monday, January 2, 2012, p. A1
ExxonMobil wants to extend Sable gas operating licence; Guysborough warden: Move would
keep plants running, economy hopping
Ten years have come and gone, but ExxonMobil Canada wants its Sable
Offshore Energy Project to last at least another decade.
The oil and gas giant began drilling off the coast of Nova Scotia in 1999,
and its 10-year licences granted in 2002 expire in five months.
ExxonMobil submitted its request to extend its operating licences to the
Nova Scotia Utility and Review Board in September. If approved by the
board, operations at its Point Tupper fractionation plant in Richmond
County and the Goldboro gas plant in Guysborough County will continue.
The subsea pipeline from the Thebaud platform, the hub of the $3-billion
Sable project's offshore activity, and the natural gas liquids pipeline that
connects the gas plant to the fractionation plant will endure.
The board does not address environmental concerns or the
economics of the project but will grant its approval, with or without
conditions, based on its evaluation of public safety and a review of historic
and ongoing operations. A spokesperson for the company was
unavailable for comment Sunday, but officials in Guysborough say a 10-
year extension paints a strong economic picture for the province.
"The importance can never be overstated," Lloyd Hines, warden of
the Municipality of the District of Guysborough, said Sunday.
"It's important to our economy, and anything to extend the life of the
Sable project or create more activity in the exploitation of this great
natural resource we have is excellent news."
ExxonMobil and its partners in the project - Royal Dutch Shell,
Pengrowth Energy Trust and Mosbacher Operating Ltd. - have paid p
roperty taxes in the municipality for the past 12 years and contributed
millions in petroleum royalties to the province.
In 2012, the province is expecting $32.8 million in petroleum royalties, Nova
Scotia Finance Minister Graham Steele said last month.
Any threat to the company's operations moving forward is a scary
thought not just for municipal and provincial coffers but also for local
charities and projects that rely on corporate sponsorship, Hines said.
"They've been a great corporate partner, . . . a major sponsor at dozens
of events, and I bet there's hardly a charity in the area that they haven't
distributed some cash to." The Venture, North Triumph and
Thebaud drilling platforms started production in 1999, and the
company's Alma and South Venture platforms started producing in 2003
and 2004, respectively. The Goldboro gas plant processes 17
million cubic metres of gas per day, while daily operations at the Point
Tupper fractionation plant produce enough propane to fill 63,000
standard barbecue tanks, according to the project's website.
Average daily production of the Sable project amounted to about 300 million
cubic feet of natural gas and 14,000 barrels of liquids like butane, propane
and condensate. The project employs more than 100
people working both on and offshore.
Proposed Black Point Quarry
Erdene Resource Development Corp. (Erdene) of Dartmouth, Nova Scotia proposes development of the Black Point Aggregate Quarry in the District of Guysborough. The proposed project area is situated on a 280 hectare (ha) property located along the south shore of the Chedabucto Bay approximately 10 kilometres (km) west of the Town of Canso.
The property, which is currently zoned Heavy Industrial (M-2), hosts a large tonnage resource of high quality granite, immediately situated on deep, sheltered, ice-free tidal water. This location provides direct access to international shipping lanes facilitating efficient transportation of the aggregate resource to U.S., Canada and Caribbean markets via barges and bulk carriers.
Project development will generally include pit development and aggregate production (drilling, blasting, processing, and stockpiling) along with the construction and operation of a marine wharf adjacent to the quarry in Chedabucto Bay, where processed aggregate will be off-loaded in barges and ships (up to 70,000 tonnes) and transported to distant ports.
The proposed project will undergo a comprehensive study level assessment pursuant to the Canadian Environmental Assessment Act and a Class I provincial environmental assessment pursuant to the Environmental Assessment Regulations. It is anticipated that the project will be a significant employer in an area that is lacking jobs; at the peak the quarry is anticipated to employ between 60 and 75 full time production employees.
Melford International Terminal's President on Project's Progress, Challenges Ahead
Peter Tirschwell, Senior Vice President of Strategy for UBM Global Trade (parent company of The Journal of Commerce) sits down with Paul Martin, president of Melford International Terminal, at the first annual Inland Port Logistics conference in Chicago to talk about the terminal's progress and the obstacles that lie ahead for the project.