On line with soda ash

By Alex Feytis
Published: Monday, 27 April 2009

USA, the world’s no.2 producer of natural soda ash, exports almost 50% of production. IM examined the route and the challenges of the mineral’s supply by Alexandra Feytis, Assistant Editor

 
 General Chemical Industrial Products (GCIP) can load l00 and 110-tonnes rail cars in about six minutes at its plant in Green River, Wyoming, (see inset)


The USA is the world’s second largest natural soda ash producer since China overtook to become first in 2003. Before, the USA enjoyed a century of supremacy in world production of this important industrial commodity. In 2007, the country produced 11.1m. tonnes of soda ash for a total value of $1,260m.

Soda ash, the commercial name for sodium carbonate (Na2CO3), is mainly obtained from trona. One of the ten highest volume minerals produced in North America, it is mainly used for glass (50%), detergents (15%) and chemicals (10%).

US natural soda ash is produced in California and in the Green River Basin in Wyoming, which is the world’s largest known deposit. The rich deposits are the residue of a 50m-year old lake, Lake Gosiute, that covered more than 3,100km2. Over millions of years, Lake Gosiute expanded and contracted in response to changes in the region’s climate, forming at least 42 beds of trona.

Some individual trona beds, at depths of up to 1,070 metres, are more than 11 metres thick and others underlie as much as 2,200 km2. It is estimated to contain 134,000m. s.tons of mineable trona, enough to meet global soda ash demand for hundreds of years at current levels of consumption. In January 2009, Wyoming produced 1.2m. tonnes of trona.

Five producers

The US natural soda ash is exploited by five producers, some of the largest in the world. Four of them are located in Wyoming, the fifth one being in Searles, California.

Of the five US soda ash producers, only FMC Wyoming Inc, part of FMC Corp. a diversified chemical company, remains domestically owned.

FMC started to produce soda ash more than 50 years ago in Green River.

Solvay Chemicals Inc., subsidiary of Belgium Solvay SA, began soda ash production in 1982 with an original plant capacity of 1m. tpa. Over the years, the capacity has been increased to today’s level of 2.8m. tpa.

General Chemical Industrial Products (GCIP) has been mining and processing trona ore, the raw material of soda ash, since 1968 and is one of the top five global soda ash producers. It is jointly owned by GCIP (75%) and Owens Illinois (25%), a world leader in glass container manufacture. In January 2008, India’s Tata Chemicals Ltd acquired GCIP. The company operates around the clock, seven days a week, 365 days per year, mining more than 4.5m. s. tpa of trona ore from which it processes around 2.6m. tpa of soda ash.

OCI Chemical Corp, part of South Korea DC Chemical Co., started production in 1962 and is the world’s third largest producer of natural soda ash.

Searles Valley Minerals (SVM), subsidiary of India’s Nirma Ltd, is headquartered in Overland Park, Kansas, and manages extensive operations in California’s Searles Valley. It produces more than 1m. tpa of soda ash.

Mine to port

As a Solvay Chemicals representative in North America explained to IM, the soda ash is shipped all over the USA, most non-export material goes to the eastern half of the country. The bulk soda ash can be transported in rail cars, trucks (25 to 40 s.tons) or bags of various sizes. But shipment of soda ash by covered hopper car is the most common transportation method.

In short, commercial grade soda ash leaving the process area is stored in silos. Conveyors in tunnels beneath the silos carry the soda ash to trucks and railroad hopper cars. The Green River railcar loading system can move up to 30 coupled cars, one at a time - with a between-the-tracks hydraulic car mover - into loading position under the fill spouts.

For instance, General Chemical can load l00 and 110-tonnes rail cars in about six minutes. The Green River loading system loads current plant capacity in five days/week freeing two days/week for maintenance, loading of special orders, or for high demand periods.

The American Natural Soda Ash Corp. (ANSAC), the exclusive export arm for the four producers based in Wyoming, manages the movement of the soda ash from the plants in Wyoming, to ports via a dedicated rail system. It uses 100-rail car trains that only pull soda ash from the plant to a dedicated ocean terminal. Each rail car carries 100 s.tons of soda ash, meaning a total of 10,000 s.tons per train.

The primary carrier which transports the soda ash is the Union Pacific Railroad, an operating subsidiary of Union Pacific Corp. and the largest railroad in North America. The railroad serves 23 states across two-thirds of the USA, linking every major West Coast and Gulf Coast port.

The cost of the transport varies from $15/s. tons for short moves all the way up to ~$100/s. tons for cross country moves.

In the case of shipment by bulk transports trucks, Solvays explains that self-container bulk pneumatic transport trucks with an auxiliary trailer can carry up to about 32,000kg of soda ash depending on state highway limits. The auxiliary trailer accounts for approximately 10 s. tons of this capacity and the truck trailer accounts for approximately 25 s.tons of this capacity.

Depending on the customers pipeline configuration and conveying distance, the truck can be unloaded in one to two hours. The truck capacity limit is dictated by the state highway load limits.

Going abroad

According to the US Census Bureau, the USA exported about 5.13m. tonnes soda ash in 2007, which represents about 46% of the US soda ash production. The country exported 455,000 tonnes in December 2008, a 5% increase comparing to a year before.

ANSAC manages the exportation for the four producers based in Wyoming. However, as under the Treaty of Rome agreement (1958) the company is not permitted to ship soda ash to the European Union, the US soda ash producers formed another organisation, the American European Soda Ash Shipping Association Inc. (AESSA), in order to ship to Europe.

The four Wyoming producers export together about 4m. tpa of natural soda ash, making ANSAC the world’s largest exporter of natural soda ash. Exports from the four Wyoming producers leave via Portland, Oregon, on the North-West Coast, and Port Arthur, which is located 90 miles east of Houston on the gulf coast of Texas. The fifth producer, SVM in Searles, California, exports via Long Beach, California, on the West Coast and material across the USA for its domestic customers.

ANSAC uses two ocean terminals to export the Wyoming soda ash to Latin America and Asia. One in the pacific North-West serves Asia and the west coast of Latin America. The other one, on the US Gulf coast, serves the east coast of Latin America as well as the other east bound destinations.

Once the product gets to the ocean terminals, it is moved to export destinations via one of the three ocean freight arrangements: long-terms charters, contracts of affreightment and spot freight buys.

In 2007, the USA exported soda ash to 56 countries in the following regions: South America (27%), Asia (26%) and North America (26%). In 2008, according to USGC, the main consumers of US soda ash, representing 71% of the US soda ash exports, were Mexico (19%) with 1m. tonnes; Brazil (12%) with 646,000 tonnes; Canada (9%) with 390,000 tonnes, Indonesia (6%) with 343,000 tonnes and Chile (6%) with 301,000 tonnes.

Challenges

The transport of soda ash has lately been challenging as the shippers have had to handle multi-dimensional difficulties such as the cost of natural gas, the rising costs of transportation, and rail congestion. Over the last 12 months, owing to the financial crisis, the market has seen very extreme volatility on all fronts.

On one hand, the increased cost of oil has a direct impact on bunker fuel rates. The volatility in the cost of transport can be problematic for the export company which operates on a long-term contracted basis with its customers, and purchases freight in the same manner.

According to the players, a minimum of stability is imperative even though certain variables such as the price of oil or the amount of vessels in service, which leads to unprecedented charter rates, have lately been quite unpredictable. All these unstable factors can cause unusual behaviour on the part of both buyers and sellers in a market, causing both value distortion and concurrently upsetting supply chains.

The companies also have to make sure that the product quality is not affected by the method of transport. ANSAC explained to IM that, in order to ensure the quality of the product that arrives is the same as that which left the plant, the company only ships in vessels that are no more than ten years old, and that meet their standards for hold cleanliness. They must pass an inspection prior to each loading. The vessel also has other onboard equipment to ensure timely discharge.