Westshore Terminals approves a $210 million capital expenditure program
Westshore Terminals Investment Corporation announces that the board of directors has approved a $210 million capital expenditure program which will see the replacement of the three oldest stacker-reclaimers (all over 30 -40 years old) with new equipment, the company reports. By acquiring three new stacker-reclaimers of the same model, Westshore will be able to significantly enhance its operational efficiencies in several respects, including by standardizing spare parts, repairs and maintenance, and by reducing overall maintenance downtime time and costs involved in maintaining older equipment. The project will also involve replacing the 42 year old outdated and inefficient administration, operations and maintenance offices, shops and warehouses with one consolidated complex, together with storage optimization. The project is expected to take 4-5 years to complete in stages.
No additional equipment is being added to the site, nor is the site footprint being increased. Any additional throughput capacity would only result from the improved productivity of the new equipment, operating efficiencies, and reduced maintenance downtime, and would only be realized if other participants in the coal chain can also improve efficiencies. Currently, it is estimated that 2-3 million tonnes per year might be possible, but in any event not before 2017. The expenditures also include approximately $7 million for new, state of the art dust suppression systems and related environmental control equipment which will be completed this year.
Over the last five years through the end of 2012, Westshore has implemented significant changes to its operations and enjoyed strong and steady growth. Over that time, Westshore has reinvested approximately $110 million in the terminal operations to upgrade and replace some equipment, and add a fourth stacker-reclaimer in 2008. The anticipated results of these efforts are that Westshore’s capacity going forward has increased to an estimated 33 million tonnes per year. With the customer agreements currently in place, and which were secured over the last two years, most of that capacity is committed through to 2021- 2022.
In order to maintain these throughput levels for the long term, additional reinvestment in the terminal’s operations is required – including specifically, the replacement of the three older stacker reclaimers. The alternative would be to spend significantly more money on annual maintenance capital to sustain these higher throughput levels (estimated to be $50-60 million over the next 5-10 years), but by doing so Westshore would continue to have old equipment that would inevitably need to be replaced. Westshore has been in business for over 42 years and believes that replacing the older equipment with new is in the best interest of operating the terminal for the decades to come. The new stacker-reclaimers will have an anticipated useful life
of 30-40 years.