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Historic shipping landmark

Oslo, May 26, 2014
The biggest dry bulk vessel used in Yara history is now loaded and setting sail to its destination - and it isn't carrying fertilizer.
Iron oxide shipping

As part of Yara’s fertilizer production processes, iron oxide becomes a waste by-product from sulfuric acid manufacturing at the company’s mine in Siilinjärvi, Finland. Previously stored off-site as a 'mountain'. It is now a profitable and vanishing item, thanks to innovative thinking and efficient supply chain.

25 Panama-size vessels

On 21 May, a 92,928 DWT (deadweight tonnage) post-Panamax vessel completed loading at sea outside Port of Kokkola in Finland. The 'W-Sky' will now spend a month traveling to China, carrying iron oxide to be used in steel-making.

"This year we will send an estimated 15-25 of these 'Panamax size' or larger vessels loaded with fine red powder," says Mikko Jääskeläinen, Sales Manager with Yara Supply & Trade. “The first overseas shipment took place in 2007 and since then volumes have increased. This large scale logistics and commercial operation targets selling off all iron oxide produced at our site since the start of the operation in 1969."

Mikko understates when he calls this a 'sizeable operation' - in the summer the material is moving by rail to port 24/7, and accounts for 3-5% of tonnage in annual Finnish railway transport. Contractors also work non-stop then, moving material from the pile to the railway platform on site. Quality control is also full-time.

Substantial value creation

HESQ issues were next. The powder was too fine for conventional ore wagons, so special containers were ordered from Austria to prevent dust problems and to facilitate efficient railway transportation.

In winter the iron oxide started to freeze in the wagons. "Sometimes we ended up moving the same tons back and forth - painful! Technology installed on forklifts to shake the containers emptied them efficiently, even during the harsh winter months," Mikko says.

Yara Finland Shipping Manager, Anna Näsi, handles daily coordination with iron oxide customers. She says innovative shipping practices are needed to ensure the highest cost-efficiency possible.

“During the open-water season these vessels come to Finland on a tight schedule – everything has to run like clockwork,” Anna explains. “The vessels are first loaded to maximum draft in port, then sail out to sea where they wait for a smaller ‘shuttle’ with the rest of the cargo.

"In addition to the technical aspects, the contractual framework is also essential," says Mikko. "We worked hard to find good customers and supply chain partners. The whole business is based on long-term partnerships. All in all: very substantial value creation thanks to the coordinated efforts of people working in logistics, shipping, HESQ, back-office and sales.”

"Assuming everything goes smoothly, within a few years the red mountain of iron oxide at Siilinjärvi will be gone, and it did not require the next ice age to do that - but some luck, innovations, and a team of top-professional colleagues," Mikko says. "And while doing so, value was created - for Yara and our partners."

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