Trafigura to acquire & re-open Ormet's Burnside bulk terminal
5 May 2011 - Trafigura, through its wholly-owned subsidiary Impala Warehousing (US) LLC, is to acquire Ormet’s Burnside terminal at Burnside, Ascension Parish in Louisiana, USA for US$28 million.
Trafigura plans to invest around US$100 million to reopen the currently idled Burnside facility as a state-of-the-art major bulk terminal for coal, bauxite and alumina.
The Burnside facility was originally constructed in 1956 alongside an alumina refinery, but closed in January 2008. The alumina refinery alongside the bulk terminal is not included in the purchase.
Trafigura will be examining a variety of options for the engineering works and investment needed to refurbish and expand the facility.
It will be only the fourth facility – and the only one with the possibility of both rail-to-vessel and barge-to-vessel capabilities – on the Mississippi and is set to become one of the top ten coal and bulk logistics facilities in the USA.
As part of the transaction Trafigura will also provide terminal services to Ormet’s alumina refinery, the most important of which will be offloading bauxite and discharging alumina.
The company expects a significant part of the investment to be spent locally, with around 100 permanent terminal operations jobs created.
After completion of the works, Trafigura is targeting a throughput of around 10 million metric tonnes annually, using bulk cargo ships of up to 120,000 deadweight tonnes.
Simon Collins, a director of Trafigura Beheer BV, the Dutch registered commodities trading company, commented: “We really are delighted by the opportunity this acquisition presents us. We have been considering and studying this for a while and have been impressed at the level of support, commitment, energy and encouragement from Ascension Parish and the state of Louisiana.
“We are aware that currently the US faces real constraints in supplying coal. The twenty or so terminal facilities across the country are simply maxed out. The development of Burnside as one of the country’s biggest terminals will create new opportunities to establish optimised flows of coal, both in and out of the USA.
“The redeveloped terminal will reduce pressure on existing facilities while providing a vitally needed multi-modal logistics platform on the Mississippi.
“We are absolutely committed to rehabilitating, maintaining and running the Burnside terminal to the highest standards. This means being a good neighbour to the people and businesses of Ascension Parish, the fastest growing region within Louisiana. We will always be mindful of the environmental importance of the Mississippi and the delta wetlands, but also the rich cultural heritage locally. We will therefore, of course, comply strictly with all parish, state and federal requirements on environmental protection, management and stewardship.”
Martijn Snijder, the CEO of Impala, Trafigura’s wholly-owned logistics business, added: “There is still a lot of work to be done to ensure we have the right mix of capacity, equipment, ship size and capital investment. Investments made today can take years to be fully effective and we want to make sure that we match the terminal’s capacities with the supply and demand for coal. We will be able to blend coal from different sources to meet the exacting specifications of buyers and markets wherever they may be. Furthermore, we particularly look forward to working together with Ormet.”
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