Mining and shipping projects are tied closely together, and any mining operation that will require shipping services needs in-depth planning from an early stage. For the shipping company, it is important to have adequate facilities to dock their ships, and therefore new ports close to the mine sites must be designed in harmony with the mining companies’ needs in order to ensure maximum output and cost efficiency.”

Tom Paterson

SENIOR VP SHIP OWNING, ARCTIC AND PROJECTS, FEDNAV LIMITED

March 22, 2019

Can you provide an overview of Fednav and the capacity of its fleet?

Fednav celebrates its 75th anniversary in 2019 and has 200 employees working in its headquarters in Montreal. We also have offices in Antwerp, Hamburg, Singapore, Tokyo and Rio de Janeiro, and our ship managers, Anglo Eastern, are based in Hong Kong. Fednav operates a fleet of between 100 and 115 ships, depending on the season, with fleet size peaking during the summer months because of our Arctic business. Of this fleet, Fednav owns 63 vessels outright, with 20 vessels on long-term charter with purchase options, and eight additional vessels on order. We are currently replacing one of our ice breaking mine support vessels, the MV Arctic, with a new Polar Class vessel being built at JMU shipyard in Japan. Steel cutting will commence in April 2019, and when construction is complete, it will be the largest state-of-the-art icebreaker vessel in the world.

Can you outline the role that shipping services play in the mining industry, and specifically the activity Fednav has in the region?

Mining and shipping projects are tied closely together, and any mining operation that will require shipping services needs in-depth planning from an early stage. For the shipping company, it is important to have adequate facilities to dock their ships, and therefore new ports close to the mine sites must be designed in harmony with the mining companies’ needs in order to ensure maximum output and cost efficiency. It is vital that new docks are designed to take into account adequate water depths and are aligned with the prevailing wind conditions to minimize delays.

Fednav’s main customers in the Canadian mining industry have operations in remote locations. We ship annually about 2 million tons of base metal concentrates from various mines in Canada and Alaska, including, Teck’s Red Dog mine in Alaska (lead and zinc); Vale’s Voisey’s Bay mine in Labrador (copper and nickel); Glencore’s Raglan mine in Northern Quebec (nickel); and Canadian Royalties’ Nunavik mine in northern Québec (nickel and copper). We also supply these mines with all their consumable materials, including fuel. In addition, Fednav handle all port operations for the Baffinland iron ore project, and lastly, we work closely with a number of major engineering firms in establishing new green field port sites.

How does Fednav work in collaboration with companies during the early stages of a project?

When a discovery is made, the prospectors and developers usually contact an engineering firm to determine the feasibility of shipping from a specific location. Once a location is determined, the engineering firm contracts to survey the dock area and determines how to get the product there. We hope that the engineering firm consults Fednav on whether we would be able to ship from the location, how often, and if there are any downsides to the location. Northern Québec, for instance, is a very challenging place to ship product year round, as the formation of ice from December to June reaches about 1.7 m in thickness with shear zones reaching depths of up to 14 m.

What is Fednav doing to reduce its environmental impact, taking the IMO 2020 regulations into consideration?

Fednav has a zero tolerance policy towards ocean pollution. Today’s biggest issue is the pending implementation of the use of low sulphur fuel in the world fleet. We made the decision not to fit open-loop scrubbers on our vessels, which transfer sulphur from the air into the water. Instead, we are going to be burning low sulphur diesel to power our vessels. We have worked hard at reducing the fuel consumption of our vessels over the last 20 years or so, with a real reduction of about 35% to 40%.  Some of our modern 34,500 deadweight tonnage (dwt) ships built in 2017/2018 consume as low as 15 tons of fuel per day travelling at 12 knots, making our fleet very competitive. Heavy fuel will be a fuel of the past, and today’s generation quite rightly expects us to do better and use renewable sources to reduce our impact on the environment. The electric, LNG or hydrogen-fueled autonomous ships of the future will happen; there is no doubt about this.

In 2018 Fednav was recognized as one of Montreal’s best employers for the 8th consecutive year. What are the reasons that contributed to this achievement?

One of the main reasons for our success is that we have a young, dynamic team with a lot of experience based in Montreal, an area not well known for shipping. We employ well-educated university graduates and train them from a young age on how to excel in the industry. Understanding that millennials are motivated by travel, we provide great opportunities for foreign employment positions, including trading houses and managers’ offices in Japan. We also own 12 terminals across the United States and Canada that allow staff the opportunity to travel to these regions to fully understand how the entire business operates.

Fednav has a retention rate of about 97% as a result of trust and respect of the Fednav Owning family, robust internal policies that have been implemented over the years and the many opportunities we provide. Age is not a barrier to promotion. We encourage further education and pay for these further studies for the staff. In my opinion, one of the main contributors to the success at Fednav is the fact that our staff is given the best tools to work with, resulting in high quality work. This includes a well-maintained, young fleet of ships.

Do you have a final message for our readership?

Come and talk to us; it does not cost anything! Fednav has worked on every major mining project that has been developed in the north of Canada, and we can provide cost effective, tailor made solutions. Our track record speaks for itself – we have been operating in the Arctic for over 50 years and we have had zero pollution incidents. Fednav gives its customers the guarantee of getting their products to market as quickly as possible in pristine condition. We provide peace of mind to our customers, do not cut corners and have a strong management team that takes ownership and accountability seriously.

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