Western Railroad Discussion > CML Metals Cedar City UT

CML Metals (old Palladon) has leased 150 Rapid Discharge hoppers for use on the iron ore shuttle between Comstock and Iron Springs UT to interchange with UP for delivery to the Bay Area. Cars should have USR reporting marks. Things will get moving upon arrival of the new cars.

Mike Root
Madras, OR

Was this the operation at Cedar City, UT?

Palladon Ventures has the resource and Palladon Iron Mining, now CML, sells the iron ore. Doesnt look like any material change in whats going on. I wonder about Richmond? Last year there was no way they could export iron ore...now they can.
Roger B



Edited 1 time(s). Last edit at 06/11/10 11:55 by up833.

Here is Palladon's news release:

Salt Lake City, UT, June 11, 2010. Palladon Ventures Ltd. ("Palladon" or the "Company") Palladon is pleased to provide an update on CML Metals Corporation's ("CML Metals" or "CML") progress to sell and ship iron ore from the Iron Mountain property located near Cedar City, Utah.

CML, formerly known as Palladon Iron Corporation, has signed an offtake agreement with China Kingdom International ("CKI") for the shipment of 600,000 dry metric tonnes annually of run-of-mine iron ore to be shipped from the port of Richmond, California. The ore will be ultimately sold to Hebei Iron and Steel ("HBIS"), which is one of the largest steel companies in China. The term of the contract is two years and the parties have agreed to review the price for the run-of-mine product every six months. CML expects to ship its first vessel to CKI by the end July, 2010. After initial shipments begin and CML is comfortable with all logistics, CML believes it will be able to step up production and increase shipments significantly above the base offtake volumes, market conditions permitting.

While CML is initially shipping run-of-mine ore, CML is actively pursuing a concentrate strategy to further improve project economics. To this end, CML has commenced engineering and other studies related to the construction and financing of a concentrate facility. If CML is in a position to produce a concentrate product before the end of the two-year contract term, the price would adjust accordingly to reflect world iron ore pricing.

In addition to executing the offtake agreement, CML has entered into long-term agreements with all required logistics partners, including rail, port, and railcar leasing companies. In completing these agreements, CML has now contracted for all the material handling logistics associated with the production and shipment of iron ore.

up833 Wrote:
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> Palladon Ventures has the resource and Palladon
> Iron Mining, now CML, sells the iron ore. Doesnt
> look like any material change in whats going on. I
> wonder about Richmond? Last year there was no way
> they could export iron ore...now they can.
> Roger B

Port of Richmond. They were always under consideration, but not "Plan A". Port of Long Beach (Metropolitan Stevedore) was "Plan A" (shorter distance to the Pacific), but things didn't work out due to a lack of proper storage space for the ore.


AM



Edited 1 time(s). Last edit at 06/11/10 23:14 by bradleymckay.

There is a big change in management.

Mike Root
Madras, OR

shortlineboss Wrote:
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> There is a big change in management.

There is a belief that the previous management put the cart before the horse. In other words they found a buyer in China without fully investigating the logistics of exporting it.


AM

None of that is true, they had neither a cart or a horse! Seriously, when we started talking to them about
supplying equipment it was very obvious that Allen's statement was very true. There were major issues in
ship loading and their tone was that someone outside of their influence would fix the problem, like it
wasn't their concern. Glad to see Mike's investment of time and money finally going somewhere though
I sure wish we were the one's making the steel and not the Chinese.

rehunn Wrote:
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> I sure wish we were the one's making the steel and
> not the Chinese.

How about Mexico, Rich, is that close enough? Maybe once they get a concentrator they could ship the pellets to that big Mexican steel plant south of Eagle Pass, TX., which gets its pellets from Minnesota via BNSF.


AM



Edited 1 time(s). Last edit at 06/12/10 09:38 by bradleymckay.

What are the pros and cons of the Iron Range hematite ore vs the CML magnetite ore?

Mike Root
Madras, OR

They're chemically very similar in that magnetite is one oxidation step beyond hematite making
hematite slightly easier to "refine". Pros and cons most likely would be deposit size and cost of
transportation as either can be used to make steel.

shortlineboss Wrote:
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> What are the pros and cons of the Iron Range
> hematite ore vs the CML magnetite ore?

http://www.gindalbie.com.au/Our+Projects/Magnetite+vs.+Hematite/default.aspx


AM

The Mesabi ore is all Magnetite until they fire the pellets. The firing in the pellet kilns changes the form of the Iron Ore from Magnetite to Hematite. The Mesabi Taconite plants all depend on magnetic separation of the ore, since Hematite is not magnetic you have to use a different method to separate the iron from the waste rock. The Labrador mines working in Hematite deposits use Humphrey spirals to separate the denser iron from the lighter waste rock.

A few years ago when United Taconite was expanding their Thunderbird Mine into a new previously unmined area, they had to call in an independent mining contractor to remove a deposit of 160,000 tons of Red Hematite above the Taconite deposit they planned to mine. United Taconite had no way to utilize the Hematite and no customer setup to use it, so Cliffs sold it on the spot market as run of the mine high grade (67 percent pure iron) ore. Cliffs had a hard time finding a Great Lakes shipping company willing to handle the shipment as the ore was very fine grained and wet, this meant that the typical self-unloaders could not handle the shipment and one of the elderly straight-deckers had to take the shipments. They didn't get a price anywhere near what you might expect for the ore.



Edited 2 time(s). Last edit at 06/12/10 14:18 by SOO6617.

Do you have trackage rights all the way to the UP main?

Any hope of Up spinning off the branch?

Good to hear there's progress, Mike!

No access to UP main line at Lund.
UP has no plans to short line the Lund-Cedar City branch.

Mike Root
Madras, OR

The Cedar City branch rates two to three SD40's and a is inbound traffic heavy, closest
thing UP has to a cash cow.

rehunn Wrote:
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> The Cedar City branch rates two to three SD40's
> and a is inbound traffic heavy, closest
> thing UP has to a cash cow.

Hey Rich, is the Coal Hollow surface mine deal a dead issue? I know Utah granted the permit. Most of the coal would be trucked to a loadout on the UP Cedar City branch (loadout was to be somewhere near Iron Springs). I remember there was talk of trucking some of the coal all the way to the Moapa generating station at one point too.

AM

I think the Sofuels/Six Counties line might be ahead of it but neither seems to be on the front burner
at the moment. It's not dead, it's just not financially viable especially with the uncertainty over the
carbon taxes contained in Cap and Trade. If that dies things might pick up a little but for the moment
coal isn't doing all that well.

The branch is down to 2 days a week, Tue and Thur. One SD70 and one older SD60. About 15-18 cars per week. Mostly inbound plastic pellets. Alton Coal is having problems with towns along the route.

Mike Root
Madras, OR