Friday, September 24, 2010

A Whale: The Rail Connection - Part III

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Back in April, when the Deepwater Horizon drilling vessel exploded into flame, a massive oil leak from the reservoir more than three miles below the surface began coating the Gulf of Mexico with Louisiana Light Sweet Crude oil.

A Taiwanese ship owner, Nobu Su, had just taken delivery of his latest Very Large Oil/Ore Carrier, (VLOO) "A Whale," which was sitting in Brazil, awaiting a loading slot at Sepetiba Bay. Mr. Su sent his brand new VLOO to Portugal for modification into a "Super Oil Skimmer."

While his intentions were noble, the execution was ill conceived. The "A Whale" returned to her upbringing as an oil / ore transport, ending up at Baia de Sao Marcos Roadstead near Sao Luis Brazil.

After waiting in line for five days, on August 27th, the "A Whale" was cleared to move to Ponta da Madeira Terminal, Pier 1, to load more than 250,000 tons of iron ore.

Ponta da Madeira Terminal (PDM) owned and operated by Brazil's multinational mining and resource giant, Vale (pronounced "vahl-lay"), located just outside Sao Luis on Marahão Island. Vale is the former Companhia Vale do Rio Doce (CVRD), whose name change was official in 2007.

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Brazil's deepest loading facility is located at Pier 1. The minimum depth along the docking line is 23,00m (75.5 ft). The "Berge Stahl," one of the largest ships afloat draws 23.5 meters when fully loaded.

Only two ports in the world can accommodate her fully loaded, PDM and Europoort - Rotterdam.

She averages 10 5-week round trips between these two ports each year. Pier 1's Tenaris-ConFab shiploader, rated at 16,000 tons per hour, will take about 24 hours to top of "A Whales" cargo holds.

When you think about a ship sitting 75.5 feet deep in the water next to a pier, you really need to visualize the number. That would be like sitting my college dorm building in the water next to the pier, with a little wave action over the roof!

Brazil is rich in many mineral deposits including iron ore. And of course, the development of these resources is intertwined in Brazils history, government turmoil and, surprise surprise, meddling by the United States.

In her book, United States Penetration of Brazil,(1977) Jan Knippers writes "World Bank loans had also enabled the Brazilian government to push ahead with the U.S. $500 million road-building project into the Amazon Basin … major benefactors of the Trans-Amazon Highway will be large foreign corporations.

She goes on to say, "The Trans-Amazon Highway … will pass remarkably close to the U.S. Steel concession at Serra do Carajas. The Serra do Carajas deposits, reported to exceed in quality even the Mina Gerais claims of Hanna [Mining Company], are being exploited jointly by U.S. Steel (49%) and the Companhia Vale do Rio Doce (CVRD) (51%)."

The Serra do Carajas deposits of iron ore were discovered during a survey by American multinationals Union Carbide and US Steel, exploring for manganese in the Amazon rain forest.

On July 31, 1967, Brazilian geologist, Breno Augusto dos Santos, who was working for Companhia Meridional de Minerações (CMM), a subsidiary of US Steel, was part of a team of geologists who landed in a clearing at the top of the Carajás Mountain range, to refuel their helicopter. The ground had a visible overlay of iron-ore.

Shortly after, the Brazilian government granted mineral rights to the then state-owned Companhia Vale do Rio Doce (CVRD), and the site became one of the largest iron-ore deposits in the world.

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In 1997, U. S. Steel sold its 49% interest to CVRD. The Carajás Iron-ore Project is situated in the heart of the Amazon rain forest, located between the Tocantins and Xingu rivers, at an average altitude of 650 meters (2,130 feet) above sea level.

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Development of the mine began in 1981. A comprehensive logistical complex; including roads, rail, airport and "company town," Núcleo Urbano de Carajás, evolved from the original mining camp. The current city, built in 1986, occupies an area of 308 hectares (760 acres). Carajas is 15 km (9 miles) from Parauapebas. The Carajás Airport has regularly scheduled service to the "outside" world.

[Click on > to view video tour of Carajas]

The community provides all the conditions of comfort and security to accommodate a population of approximately 5,500 (2006) employees and contractors in 1,320 housing units, and access is controlled and mostly limited to residents and mine employees. Carajas has a bank, churches, schools, hospital, shopping center, bus system, and, ironically, in the midst of the Amazon Jungle, a zoo!

And because it is in the middle of the Amazon Jungle, the complex is completely surrounded by fencing, to keep undesirable creatures (like jaguars) out.

Just like the Tumbler Ridge Coal experience, this town is striking similar to the company town built to support the Tumbler Ridge coalfields in North Central British Columbia. Since most of us cannot imagine what life would be like living in a company town, you may find this study, by Norman Keevil of UBC (University of British Columbia) interesting reading.

Ed. Note: Another example of a company town, Kitsault BC, built by Phelps-Dodge in 1978. An entire city, right down to the appliances in all living units, but never occupied! For sale - if you have the dough and desire to own your own town!

The Tucuruí Dam on the Tocantins River powers the Carajás Iron-ore Project. The installed generation capacity of the plant is 8,370 MW, with 24 generating units. The Tucuruí spillway was the largest in the world with 120,000m3/s of capacity of discharge, until it was edged out in 2008 by the 120,600m3/s maximum discharge of the Three Gorges complex in China.

Ironically, drawing another comparison with Tumbler Ridge, BC coal, this also required power from a dam. On the list ranking the world's largest dams,
  • #25 - WAC Bennett, Canada -- Tumbler Ridge coal
  • #26 - Tucurui Dam, Brazil -- Carajas iron ore
The original plan for developing the Carajás Iron-ore Project included shipping iron ore from the mine by barge to on the Tocantins River to Belém, requiring a navigation lock in the construction of the Tucurui Dam.

However, CVDR decided to build a railroad to tide water for a variety of reasons including:
  • The company's experience in transporting ores by rail
  • The annual cost for of maintaining a marine ore terminal in Pará State
  • The cost of maintaining a navigation channel in the Tocantins River
  • Simplified material handling, barges vs rotary dump rail car
Interest in and funding for the navigation lock was scrapped, as memorialized by this 2005 photograph by Paulo Pilenghy, visualizing a weed choked incomplete navigation lock.

The Advanced Land Imager on NASA's EO-1 satellite took this image of the Carajás Iron Ore Mine on July 26, 2009. Terraced layers of "terra roxa" - red earth, reveal the open pit mining benches. Click on the image above to explore this massive site. Words are hardly necessary to describe the immensity of this project. There are 12 individual images in this highly detailed view of the mine.

Everything about this project is massive, from the haul trucks to the material handling equipment in the yard that resemble robotic steel insects from a science fiction movie.

Known as "Stackers" and "Stacker/Reclaimers" these electric powered giants - resembling giant steel insects from a science fiction movie - move amongst the storage piles, connected to complex conveyor systems, operated by remote control from an air-conditioned control room.

The Carajás Iron Ore Project cost CVRD $3 billion in direct investments:
  • 56% for the railroad
  • 20% for the mine and processing plant
  • 14% for the PDM marine terminal
  • 10% for infrastructure.
The first rail shipment from Carajas to PDM to Japan moved in February 1985.

In a little more than 24 hours, the "A Whale" had ingested more than 250,000 tons of iron ore pellets, and cleared for departure from Vales PDM Maritime Terminal.

On August 28th, assisted by a squadron of Vale's harbor assist tugs, the deeply laden vessel moved out into the Baia de Sao Marcos Roadstead.

This is why Vale dictates how hatches open - away from the dock. And with her starboard along the pier, she does not need to be turned, fully laden, in shallow water against fast currents. She's alread heading toward the Atlantic.

The next day, August 29th, clearing Baia de Sao Marcos, the "A Whale" will cross the South Atlantic, rounding Cape Agulhas,the southernmost tip of Africa.

She will cross the Indian Ocean, transit the Singapore Strait, continuing north across the South China Sea to China.

The voyage will cover about 7,600 nautical miles, lasting about 28 days, minimum.

Part I
Part II

Thursday, September 16, 2010

A Whale: The Rail Connection - Part II

"A Whale" exhausted her "15 minutes of glory", failing miserably as a "Super Oil Skimmer." In early August, she rejoined her sisters "B Whale" and "C Whale" as a Very Large Oil/Ore carrier (VLOO). Weighing anchor, she departed anchorage at Boothville, Louisiana, and without fanfare or news coverage, slipped quietly down the Mississippi River into the Gulf of Mexico.

Eleven days and 3,442 nautical miles later, "A Whale" arrived at Baja de Sao Marcus Roadstead, Brazil on August 22nd. There she joins a number of vessels waiting for berth space at Vale's Ponta da Madeira terminal, the eastern terminus of the Estrada de Ferro Carajas Railway (EFC).

Brazil was discovered by the Portuguese in 1500. By 1530, colonization had begun, with Germans and Italians joining in. Brazil is the fifth largest country in the world, as measured by both size and population. She has a rich railroad history, heavily influenced by Europeans.

The CIA World Fact Book list three gauges for Brazil's rail system:

  • Narrow gauge - 1,000 mm - 3' 3.37" - 22,954 km (14,039 miles)
  • Standard gauge - 1,440 mm - 4' 8.69" - 194 km (120 miles)
  • Irish gauge - 1,600 mm - 5' 2.99" - 5,708 km (3,745 miles) (459 km, 285 electrified)
There came a point in Brazil's rail experience (I have to condense this!) when Brazil's three major systems, totaling about 30,000 kilometers (18,640 miles) of track, began to falter. These systems included:
  • Rede Ferroviária Federal S.A. (RFFSA) composed of 18 regional railroads
  • Ferrovia Paulista S.A, the railway of São Paulo State (FEPASA)
  • Companhia do Vale do Rio Doce (CVRD)
To stabilize the floundering rail transport system, the government nationalized the roads. However, over time, this proved problematic for the Government.

By granting operating rights, called concessions, a private company took over operation of a rail line, with specific goals, to:
  • Free the State from operating a railroad
  • Improve the allocation of resources
  • Increase operational efficiency
  • Stimulate the transportation market
  • Improve quality of the service
Concessions were granted for a period of 30 years. Renewal of the concession to be based on the operator's performance in meeting the goals and objectives of the concession.

Companhia Vale do Rio Doce (CVRD) was created in 1942 from the assets of the Itabira Iron Ore Company. By the 1950's, the company began on the path of becoming one of the leading exporters of iron ore in the world.

CVRD was privatized in 1997. On November 29, 2007, at an estimated cost of $59m (USD), CVRD shortened its name to Vale. (Portuguese for "valley;" Vale is pronounced, "vah-lay.")

Moreover, by acquiring Canada's Inco in 2006, Vale became the world's second largest mining company behind Australia's BHP Billiton.

The beautifully simple "V" monogram evokes a landscape of mining and geographic elements, with Brazil's national flag colors, green and gold, representing nature and wealth.

Vale operates state of the art unit trains over two heavy steel mine-to-port corridors, which include:
  • Estrada de Ferro Vitória a Minas (EFVM)
  • Carajás railroad (EFC)
Estrada de Ferro Vitória a Minas railroad ("EFVM")
  • 1,000 m narrow gauge (3 ft 3 3/8 in)
  • 331 locomotives and 19,395 wagons (2009)
  • Links the Southeastern System mines in the Iron Quadrangle region in the Brazilian state of Minas Gerais to the Tubarão Port, in Vitória.
EFVM terminates at Brazil's largest deep-sea terminal, Tubarão Port, located near Vitória. Tubarão Port covers an area of 7 square miles (18 km²), and consists of four terminals including Vale's iron ore maritime terminal.

Vale's iron ore Maritime Terminal has two piers.
  • Pier I. Two ship loaders can load a combined total of 14,000 metric tons per hour. It can accommodate two vessels at a time, one of up to 170,000 DWT on the southern side and one of up to 200,000 DWT on the northern side.
  • Pier II. One vessel of up to 365,000 DWT, limited at 66 feet (20 meters) draft plus tide. Loaders that work alternately, can each load two ships up to 16,000 metric tons per hour.

Estrada de Ferro Carajás railroad ("EFC")

  • 1,600 mm gauge (5'3")
  • 226 locomotives and 12,627 wagons (2009)
  • The line has a daily capacity of 301,000 metric tons of iron ore.
  • EFC also carried 342,665 passengers in 2009.
The EFC begins at the Carajás iron ore mines, extending 892 kilometers (554 miles) to the Ponta da Madeira (PDM) maritime terminal complex facilities located near Sao Luis.

PDM maritime terminal can accommodate four vessels alongside three piers.
  • Pier I. Vessels displacing up to 420,000 DWT, maximum loading rate of 16,000 tons per hour.
  • Pier II. Vessels of up to 155,000 DWT, maximum loading rate of 8,000 tons per hour.
  • Pier III. Two berths and three ship loaders can accommodate vessels of up to 220,000 DWT, maximum loading rate of 8,000 metric tons per hour per ship loader.
Cargo shipped from PDM consists principally of iron ore production. Other cargoes include manganese ore, copper concentrate, nickel, and pig iron produced by Vale, and pig iron and soybeans for unrelated parties.

On August 27, the "A Whale" received instructions from the Vale Terminal Dispatcher, to clear the anchorage at Baja de Sao Marcus Roadstead and proceed to Pier 1 at Vale's PDM Deep Sea Loading terminal.

There the "A Whale" would begin loading 300k tones of iron ore, brought by rail from Vale's Carajas Minas N4, located more than 800 kilometers (500 miles) into the Amazon rainforest.