208 (28.02.19)


Motorcade

20 CRITICAL TRADE ROUTES

12. Rotterdam, Netherlands

How Canadian iron ore feeds industrial Germany

A freight train in Canada carrying thousands of tonnes of iron ore cuts its way through pine trees on its way from the Bloom Lake mine to the port of Sept-Ils. Owned by Montreal-based Champion Iron, and originally costing $5bn, Bloom Lake is one of three major operations in Canada's Labrador Trough, producing the world's highest-purity iron ore. Whilst the wider market is buffeted by ups and downs in China, Canada’s output goes into specialist steels, fetching a 20 to 30 per cent premium to rival tonnage from Brazil or Australia. “We're totally sold out for this year and orders are coming in fast for 2020,” says Champion’s chairman Michael O’Keeffe. The bulk of production from the Trough, worth $3bn to $4bn each year, crosses the Atlantic to Rotterdam, a sprawling port and the main gateway to industry in Europe. Towering cranes on the dock are automated and unmanned, grabbing ore from the hold, dumping it into hoppers, feeding tonnage into one of the world’s largest stockyards. From there, 80 per cent of all cargo is loaded onto Betuweroute, a €4.7bn ($5.4bn) railway that pumps raw materials into Germany. Trains leave every six minutes. But part of the ore goes into barges, meandering through Europe’s waterways until it ends up in Duisburg, a plant bigger than Monaco that makes the world's toughest heavy-plate steel. By heating then rapidly cooling the metal (“tempering” and “quenching”), before cutting it into sections with lasers, Duisburg can produce bulletproof metal at least five times harder than ordinary steel, and up to 40mm thick. Buyers can ask for “multi-hit” ballistic testing and the plates “may be used at the discretion of the purchaser”, but typically go into bank vaults, police cars and diplomatic vehicles. Buyers include Mercedes and the German military.

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10 days

Shipping Canada's iron ore to China typically takes 45 days; selling into the EU cuts down shipping costs by more than three-quarters

31m

Rotterdam handles 31 million tonnes of iron ore each year, primarily from Canada, Brazil and Sweden

$3.4bn

Buyers in the EU typically buy high-grade ore that trades at a 20 to 30 per cent premium to the market, costing ~$110 per tonne at current prices