Since its opening, there has been a range of slag
products dumped on the SYSCO property, including blast furnace slag,
open hearth furnace slag, and electric arc furnace slag. Blast furnace
slag is the most commercially viable of these slag products.
Blast furnace slag has a number of potential uses. The majority
of all slag sold by Heckett Multiserve in the Cape Breton market
is used for engineered fill in construction projects (i.e., as a
substitute for aggregate). Blast furnace slag can also be added
to concrete block during the manufacturing process. This adds strength
to the concrete, makes it lighter, and depending on the price, can
reduce the cost of manufacturing.
According to Shaw Brick in Elmsdale, Nova Scotia, they would like
to use slag in the manufacturing of concrete block, however the
cost of transportation to their existing manufacturing facilities
in Elmsdale and/or Fredericton is too high, and makes the addition
of slag non-viable from a financial perspective. There are no other
concrete block manufacturers in the Cape Breton area that could
use this slag. Without a local manufacturer, the only viable options
for the slag are to export it off site, either locally for filling
and construction, or by ship for re-sale in other markets.
According to the Nova Scotia Department of Environment and Labour,
the United States consumes 19 million tones of slag per year. With
the recent down-turn in the steel industry, the production of slag
has come to a virtual standstill, with constant demand this could
improve the market for imported slag.
Heckett Multiserve estimates that there are 20 million tones of
slag on the SYSCO property (EDM has made an independent estimate
that is similar). Roughly 25% of this is non marketable slag. The
process of mining slag for export includes excavation, crushing
and screening, and conveyoring into a ship. The existing Heckett
crusher is the limiting factor in determining how much slag can
be produced each year (400,000 tones). This capacity could be doubled
by adding a second crusher ($350,000) and by adding additional shifts.
According to Heckett, excavating 500,000 to 1.5 million tones
per year is possible if more equipment is allocated to the job (this
would require 10 to 30 years to remove the 15 million tones at SYSCO).
Emera indicates their coal pier could also be used to export slag,
however this would require a stockpiling yard of roughly 20 acres
adjacent to this property.
Heckett is currently paying the Province a mineral royalty of $1.25
per ton (i.e. 25% x gross revenue of $5 per ton for the Cape Breton
market). Heckett has been in negotiations with an aggregate broker
in New England who indicates that the State of New York Department
of Transportation might be interested in purchasing 500,000 to 1.5
million tons of slag per year. This is contingent upon slag being
certified as an acceptable aggregate in New York (this approval
is supposedly forthcoming in early 2002), and on the ability to
deliver this slag to the wharf in New York for $7 to $9 US per ton.
Canadian Steamship Lines indicates the cost of transporting slag
to New York from Sydney at $4 to $5 US per ton. The contract would
be for a five year term, starting with 500,000 tons per year, and
increasing as the market grows. It would have renewal options for
two more five year periods.
Although there is no clearly defined market/contract for the SYSCO
slag, the potential revenue from this commodity could be the most
valuable asset on the property. The province should investigate
further the potential for selling this commodity for export.