Zeppelins Seen Hauling Caterpillars to Mine Siberia: Commodities
By Firat Kayakiran & Thomas Biesheuvel - Nov 27, 2013 9:00 AM PT.
Worldwide Aeros Corp. via Bloomberg
With better zeppelin and blimp designs and a buoyant gas that can’t ignite, makers such as Worldwide Aeros Corp. say they’re negotiating their first sales to the $960 billion mining industry to complement truck and rail transport.
Robin Young of Amur Minerals Corp. wants to dig for nickel and copper in Siberia where forbidding winters and poor roads make it tough to haul in equipment. His best option: fly it in with zeppelins.
Hybrid Air Vehicles has developed and tested its non-rigid craft capable of performing in storm winds and conditions typical of Siberia and the Canadian tundra, spokesman Chris Daniels said. Source: Hybrid Air Vehicles via Bloomberg
Worldwide Aeros is building airships about 500 feet long, with zeppelin-like rigid structure designed to carry loads as heavy as 250 tons at speeds of more than 100 miles an hour, according to Chief Executive Officer Igor Pasternak. Source: Worldwide Aeros Corp. via Bloomberg
Otherwise the London-traded explorer would have to spend about $150 million building a 350-kilometer (218-mile) road to truck in heavy construction gear, Chief Executive Officer Young said in an interview. Peter Hambro, executive chairman of gold producer Petropavlovsk Plc, said he invested in a maker of the airships and foresees the mining industry adopting them.
“To build a bridge to take a Toyota Land Cruiser isn’t horrifically expensive,” Hambro said. “To build a bridge that will take a Caterpillar 777 is very, very expensive,” he said, referring to the 87-ton dump truck used in mines.
Zeppelin and blimp manufacturers need mining contracts to creep back to life, 76 years after the Hindenburg burned and crashed in New Jersey, ending most buyer interest for decades. With better designs and a buoyant gas that can’t ignite, makers such as Worldwide Aeros Corp. and Hybrid Air Vehicles of the U.K. say they’re negotiating their first sales to the $960 billion mining industry to complement truck and rail transport.
So far, rejections have been plenty. OAO GMK Norilsk Nickel looked at zeppelins to transport equipment to build a mine in Siberia a decade ago and decided instead to use conventional airplanes. It later built a fleet of icebreaker vessels to ship its nickel out through the Yenisei River in Russia’s far north.
Polyus Gold International Ltd., the largest Russian gold producer, has considered using the zeppelins as an option to deliver heavy equipment to its Natalka project in the country’s far east, spokesman Sergey Lavrinenko said. “It was rejected, though, as at the time we couldn’t find a suitable offer on the market.”
About 10 years ago Hybrid Air of Cranfield, England, built its first blimp, which unlike a zeppelin, doesn’t have an internal frame. It was to be used for advertising and documentary filming. The company sold its second airship, with a 5-ton cargo capacity, to the U.S. Army for surveillance in Afghanistan though the army is returning it in December because of budget constraints.
Petropavlovsk’s Hambro said he would consider ordering one in the future for his business in Russia’s far east. Hybrid Air has developed and tested its non-rigid craft capable of performing in storm winds and conditions typical of Siberia and the Canadian tundra, spokesman Chris Daniels said. Those are the most likely regions where a lighter-than-air vehicle might get used.
To be sure, both Hybrid Air and Worldwide Aeros need to pass flight tests to get authority to fly their airships. Hybrid Air is expecting to get its certification within two to three years, Daniels said.
Hybrid Air is in talks with two companies that supply transport services to mining companies in Canada and expects to sign orders in the next couple of months for delivery as early as 2016, Daniels said. The airship will contain a rigid structure underneath the inflated canopy to carry 48 passengers and the cargo, he said.
For investors, the option of an explorer like Amur using an airship rather than raising funds to pay for a road before starting production is attractive, said John Meyer, an analyst at SP Angel Corporate Finance LLP in London.
“Amur’s project has a huge value, but the upfront funding and the fact it’s in Russia means that it’s difficult to finance,” Meyer said. “The ability to use an airship will completely transform the value of the company. They can start producing before spending all that extra money.” Amur, based in the British Virgin Islands, is named after the region of Siberia where it explores for nickel and copper.
There are only about a dozen blimps and zeppelins flying worldwide and most of them are used to float in the air for several days for advertising or carry tourists in Germany, according to Daniels.
Technological developments have helped manufacturers to build airships with larger lifting capacity and the ability to land and take off more often, he said. HAV is constructing a 400-foot blimp with a capacity to carry 50-ton cargoes.
HAV tested its 5-ton capacity airship in 70 mile-per-hour winds and most of the company’s potential customers are in Canada, Daniels said in an interview. The fuel costs are about 10 percent of a helicopter’s, he said. All lighter-than-air vehicles built after the Hindenburg disaster in 1937, when the airship’s hydrogen tanks caught fire killing 36 people, use non-flammable helium, he said.
Worldwide Aeros is building airships about 500 feet long, with a zeppelin-like rigid structure designed to carry loads as heavy as 250 tons at speeds of more than 100 miles an hour, according to CEO Igor Pasternak.
The aircraft can ferry mining equipment to roadless terrain because they are light and can take off and land vertically, said Pasternak, who moved his closely held company from his native Ukraine to Los Angeles in 1994. Fuel costs are about a third of a cargo plane, he said.
Worldwide Aeros is planning to build fleets of 24 zeppelins to serve shipping industries, including mining, Pasternak said. The company is negotiating with potential clients and receiving their commitments to use the service, he said.
Worldwide Aeros will operate the airships, which will be available for hire by customers, about a quarter of which are mining companies.
“Anything that allows us to move heavy weights over difficult terrain without spending a lot of money on the infrastructure is attractive,” Petropavlovsk’s Hambro said.
Hybrid Air plans to develop its 50-ton capacity blimp with with a price tag of about $30 million to $40 million each and to follow this about two years later with 200-ton capacity airships, Daniels said. Worldwide Aeros, which is testing its 66-ton capacity airship, is seeking to raise about $3 billion to build the 24-strong fleet, with 20 of them having a capacity of 250 tons, CEO Pasternak said.
A shortage of helium has led to rising prices that could pose difficulties for the blimp producers. Helium prices for non-governmental use have increased by as much as 89 percent to $6.13 per cubic meter in the past five years, according to U.S. Geological Survey data.
The U.S., which in the 1920s sought to protect its helium supplies to keep a steady use for military dirigibles, in the 1960s began storing the gas in an underground reservoir in Texas after the blimp business didn’t take off as expected. The U.S. has the world’s largest reserves of helium, followed by Qatar, Algeria and Russia, according to the Geological Survey.
Aeros’ 66-ton capacity airships would need about 6.7 million cubic feet of helium while the 250-ton ones will use about 14 million cubic feet, according to the company.
HAV’s 50-ton capacity airships will contain about 100,000 cubic meters of helium, the company’s Daniels said. Global consumption of the gas is 180 million cubic meters while total reserves are about 50 billion cubic meters, he said.
Today high-tech companies and manufacturers including General Electric Co., Siemens AG and Intel Corp., are among the main helium consumers. GE uses helium to cool magnets on its magnetic resonance imaging, or MRI, machines that provide internal images of the human body while Intel uses it to make computer processors.
The airships have potential for use in remote projects beyond mining, SP Angel’s Meyer said today. “You can imagine oil companies carrying rigs to site in this way, or power companies carrying generators.”
The previous post is the about Roy Hill Iron Ore Project which has been tentatively voted for approval,but will be taken up Congress for final approval.Again Senate Democrats are against it.If turned down,it will eventually get the loan from elsewhere and it would be very stupid on the Senate to turn it down.
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Encourage Congress to Support Financing For the Roy Hill Australian Iron Ore Project!
In the next few weeks, the Export-Import Bank of the United States (Ex-Im Bank), the official U.S. government agency that assists in financing exports of U.S. goods and services to international markets, will make a decision on whether or not to provide $650 million in long-term financing to aid the export of mining equipment for a customer project--Roy Hill’s Australian iron ore mine. This project presents a potential business opportunity for Caterpillar to support Roy Hill with our mining equipment.
We need your help engaging your Members of Congress on this potential business opportunity for Caterpillar. Take action now!
Support Ex-Im Bank Financing for Roy Hill’s Australian Iron Ore Project!
[Each Recipient listed above receives a letter with their name inserted here]
YOUR LETTER:As a Caterpillar employee and your constituent, I write to you concerning U.S. Export-Import Bank financing for a Caterpillar customer and potential business opportunity—the Roy Hill Australian Iron Ore Project.
The Roy Hill project is a new Australian iron ore mine seeking $650 million in long-term loans from the U.S. Export-Import Bank to finance the export of mining equipment for this project. This financing will help support U.S. exporters of mining equipment, like Caterpillar, to compete for business opportunities with Roy Hill. For Caterpillar, the most critical piece of the funding is the Ex-Im Bank financing. Without it, Caterpillar stands to lose a large portion of those sales, but so do the other U.S. manufacturers currently up for a portion of the bid.
Unfortunately, Ex-Im Bank has heard from competitors of Roy Hill. But the concerns they raise do not consider the overwhelmingly positive benefits to the U.S. economy should Caterpillar and the other suppliers earn this business.
We believe that Ex-Im financing for the project should move forward for several reasons:
• Caterpillar and other U.S. suppliers view Ex-Im Bank as one of the most important outlets that the federal government has to help grow U.S. exports, which supports manufacturing and job growth in the United States.
• Given current global economic conditions, Ex-Im’s role in maximizing exports is more important than ever to U.S. manufacturers. Small price differences can mean the difference between winning and losing significant export sales.
• The Roy Hill project will move forward with or without U.S. Ex-Im financing. If the financing is denied by the United States, export credit agencies in Japan, Korea and other nations will have the opportunity to support Caterpillar’s foreign competitors.
• Failure to approve this financing would represent a substantial lost export opportunity for U.S. equipment manufacturers and their suppliers, an unfortunate precedent to set when issues other than the marketplace dictate the ability of U.S. exporters to compete for business
As your constituent, I urge you to contact Ex-Im Bank in support of financing for the Roy Hill project, U.S. jobs, and U.S. exports. I look forward to your prompt response.
This was the one Caterpillar was waiting for.A lot of power was fighting against this.Glad to see they will get it thru.
Rich,at the Baird Conference,they announced that there was $ 1.7 Billion Dollars available up to year 2015.Im not sure on the wording,but it read like it may be used 2014.
U.S. Ex-Im Bank Votes to Support $694 Million Loan for Roy Hill
By Simon Casey and Elisabeth Behrmann November 14, 2013
The board of the U.S. Export-Import Bank, an independent federal lending agency, gave preliminary approval for $694 million in financing for billionaire Gina Rinehart’s Roy Hill iron ore project in Australia.
The vote by the lender’s board today will support the purchase of mining equipment from U.S. companies including Caterpillar Inc. and General Electric Co. (GE:US), Daniel Reilly, a bank spokesman, said in an e-mailed statement.
Rinehart, Asia’s richest woman, is seeking A$7 billion ($6.5 billion) of debt from banks and export credit agencies to help build the A$10 billion iron-ore mining venture in Western Australia’s Pilbara region, comprising a mine, rail and port operations. Roy Hill expects to conclude financing talks for the debt package by the end of the year.
Rich,you really do know your "cat".You are truly knowledgeable about the business and have a lot of class.
If you think that a Company is that wrong for cutting back anywhere they can,you should sell.But,Caterpillar is now doing the right thing by cutting.A Company cannot afford to keep the thousands of employees standing around doing a lot of nothing waiting for orders to flow in.When the orders start coming in,Caterpillar will do the right thing and call paople back to wor,and they will come.
I called that number and they answered with " Good Morning ,you have reached the Insane Asylum.