Justus Veldman thinks there’s a
home-grown solution to supply the Thunder Bay Generating Station with
wood pellets instead of importing them from
Europe.
At the same time the Sault Ste. Marie developer wants to bring industry back to the Township of Red Rock with his ambitious plans for a commercial harbour project and a specialty wood pellet plant.
Veldman’s company, Riversedge Developments, hopes to finish demolishing the former Norampac linerboard mill buildings by fall in order to have the waterfront property “shovel ready” to invite industry and investors to the scenic community on the shores of Lake Superior, about an hour’s drive northeast of Thunder Bay.
Operating under the project banner of
North Port Canada, Veldman is working with an undisclosed Dutch
company to bring torrefied pellet technology to Canada and build a
new forest products mill on the 860-acre property to support both the
local market – including Ontario Power Generation (OPG) and export
customers.
After his extraordinary success in
remediating the former St. Marys Paper site in the Sault, Veldman was
approached by the township in the fall of 2013 to see if he would be
willing to do the same there. The mill, which closed in 2006, had
been taken over by the municipality on tax
arrears.
After acquiring the property last year, Veldman hooked up with Essar Port Global Holdings, a subsidiary of the multinational that owns Essar Steel Algoma in the Sault. The two parties inked a memorandum of understanding in March to design, build and operate a port facility.
Located just off the Trans-Canada Highway, Veldman said Red Rock’s attributes are obvious: it’s a natural harbour with deep water, power, natural gas and rail connections.
Late last summer, CP Rail lifted sections of a spur which ran down to the mill, but Veldman’s company has acquired the track bed and rail bridges, and plans to lay down new rail.
He envisions Red Rock as a “feeder port” driving traffic across Lake Superior to a proposed $120-million to $150-million Port of Algoma in the Sault, now in the planning stages.
Conceivably, barges filled with Red Rock pellets and other forest products from north shore communities like Marathon, Wawa and Thunder Bay could be transferred at the Sault onto ocean-going vessels bound for Europe.
“The more traffic that we can take off of trucks and rail and onto boats is a very efficient way of transportation,” said Veldman.
Veldman said his Dutch partner had previously bid on the OPG contract for Thunder Bay but lost out to Norway’s Arbaflame which is now supplying the plant with pellets on a trial basis. OPG does have the option of opening bids again in 2016 if the imported pellets are too pricey or underperform.
Should that happen, Veldman expects the Dutch to be in the mix again.
“We have the fibre basket right in our own backyard so why not make it locally?”
Even if they’re rebuffed by OPG, Veldman insists there is enough global demand for torrefied pellets to ship overseas.
“It’s an up-and-coming pellet that can be stored outside. The coal plants that take them don’t need all kinds of upgrades for infrastructure.”
Veldman placed no timeline on when a pellet plant could be operational or when the dock reconstruction would begin.
“We do have some high-level thoughts on what it could be, but we’re very early on in the due diligence.”
Veldman said he’s working with the previous mill owners and the Ministry of Environment to remediate the site and cap an industrial landfill.
Veldman said Essar Port engineers will determine the dock requirements, including whether the old shipping channel remains open to navigation.
With plenty of industrial waterfront acreage at his disposal, Veldman thinks Red Rock could be the perfect staging base for equipment headed up for the Ring of Fire mineral camp.
