CHASED BY CHINESE HOARDS INTO THE SCANDANAVIAN ARCTIC – 2001

In a previous article, about my travels to Norway, I touched on our dependence on iron ore. One of our biggest, most profitable business lines, was applying cement and iron ore to offshore pipeline pipe. The weight created by the mixing of cement and iron ore, counteracted the buoyancy of a pipeline, once filled with natural gas. Without, some sort of “counterweight”, when the pipeline was complete, and sunk into the ocean, it had a tendency to float, when it was filled with gas. I’m speaking of any size of pipeline! Fill it with gas and it wanted to come to the surface.

In the “old” days, huge, cement blocks or “anchors”, were put on top of the pipeline to hold it in place at the bottom of the sea. Although effective, the pure size of these anchors (something like a small house), created problems, underwater. Fishing vessels would tangle their nets around them. Commercial vessels would snag their own anchors on these huge blocks. And generally, they caused no end of problems. Because of this, the method of wrapping the pipe with iron ore and cement was developed. This layer, around the pipe, provided the necessary weight to hold the pipe, in place, on the bottom of the ocean. It was smooth (nothing to snag on), environmentally friendly, and ultimately served everyone’s needs.

Problem solved, right? Not so fast, nothing in JimboRed’s life went quite that easily. Nope! The problem was locating and purchasing the vast, mountains of iron ore, that were required, to coat one pipeline, that our clients, could lay in the ocean. Let me see if I can explain the magnitude. At any given time, we would have two or three projects, requiring iron ore, in progress, around the world. Of course the size of the pipelines varied, both in length and diameter. However, let’s say for this explanation, that most of them would need 200,000 tonnes of iron ore in the short timeframe of the coating process. Of course, we never had any, coating contracts, that were anywhere near, the iron ore mines.

That meant, at least 4 or 5 of these huge ocean going vessels arriving at each site over the course of one project. These created huge, mountains of iron ore at our plants. Each one of these was an adventure in sourcing, loading, transport, and unloading. If anything could go wrong, it usually did. Huge, big black dirty piles of iron ore were created at our plants worldwide. It was dug from the ground, moved half a world away, wrapped on pipe and buried at sea. Only to remain there for a few million years, when some other civilization dug them up and wondered, “what the hell are these?”

In the early 2000’s, we sourced iron ore from all over the world. It came from mines in India, Chile, Australia, Africa, Canada, Brazil, Russia, the Middle East, and South East Asia. Movement of it was, primarily, by Panamax bulk cargo carriers. Cargos averaged 40,000 to 60,000 tonnes per load. It had to be a certain type of ore, magnetite, and needed to be crushed to “fines”. This was accomplished by crushing and passing it thru a series of smaller and smaller screens. Not every mine in the world had the crushing capabilities, or the right type of ore, which limited where we could secure ore from. I must say, that each and every time we needed to find ore, and locate a vessel to haul it, it was an adventure.

Just the process of locating a pile of crushed ore, that was available to purchase, finding a vessel in the right location, for the right price, that could deliver on schedule, was nerve wracking and exciting. If nothing else could get ol’ JimboRed worked up, this could. By now you are probably asking, “where’s the memory or let’s get on with it”. I don’t blame you. Sometimes I even bore myself with details. (Not)! Ok, here goes.

For the early years of this business, iron ore was relatively difficult to find, however it could be done. We had enough sources, that somehow we always managed to secure ore and locate a shipping vessel to haul it to our place of work. No matter how remote, or far away. At the same time, the Chinese, had a consumption demand, that could easily use up all of the, worldwide ore production, available at that time. Their problem was that they did not have a great track record, when it came to paying their bills. Many of the mine owners, did not want to deal with them. That resulted in us, having available ore at low prices. Difficult to find, but it was workable.

One day all this changed. The little communist dears, decided that if they wanted ore, they were going to, finally, have to pay for it. The days of the world looking on in sympathy for their plight, were over. They were starting to flex their “muscles” on the world economic stage. Letters of Credit, were now opened for all iron ore purchases. Thus guaranteeing payment for any product sold to them. Payment for the use of ocean going vessels was now also guaranteed. Chinese ports, removed the difficulties encountered by vessels, entering and leaving them. It made the owners, more ready to take goods into China. Not only that, they offered to pay 300% more, than what was the market price, for ore, at that time. Ouch!

One by one, the iron ore mines turned their sales toward China. As an added bonus, the Chinese did not require the ore to be crushed. Basically they wanted as much as they could get, just dug from the ground, piled into bulk carriers and sent to China. The change was sudden. Mines that were our “friends”, in previous years, now somehow, didn’t return calls or queries. They basically didn’t want to hear from us. It was because the greedy little devils, now had new friends to play with. When our people would report, that our longterm supplier, now didn’t want to know us, it would make me jump around and curse. By this time in my life, I had a raging high blood pressure reading. I had just had the Roto-Rooter run thru my heart and I was much like a volcano waiting to explode.

To try and return things to normal and guarantee a continued supply. I jumped on a series of planes and flew into Mangalore, India. Here was located, one of our most dependable suppliers. We had worked with them since the start of this business. We met in Mumbai, and I flew with the owner from there to his mine site near Mangalore. What sticks in my mind about this trip, was arriving at the airport, to find out that him and I would fly from Mumbai to Mangalore in his private plane. Having been told this, the hackles on my neck stood up. There, perched on the runway, was a twin engine, 4 seater plane, of unknown vintage. Looking around, I see no pilot and come to the realization, that him and I will fly this plane.

Once again, in this life, I was in serious jeopardy of “soiling” my “manper”. So for the next three hours, buffeted by wind currents, we bounced our way to his mine site. He chatted away, but avoided responding to my queries about the state of iron ore and our relationship. If I remember our flight was about 3 hours. We shook, we jostled, rumbled, banged, rose and fell with each gust of air that hit us. Luckily I was fairly strong of stomach and didn’t “lose it”, all over, his crap airplane.

We arrived, at his mine and were received with a lot of bowing and nodding of heads. It was much like we were in a store full of “bobble head dogs”. You know, the ones that the “cool guys” had mounted in the back windows of their cars. He now explains, that the new crushing equipment, that he had ordered from the UK, 2 years earlier had now arrived, but wasn’t yet set up. He then, casually, dumped a bomb on me. In his most syrupy voice, with his head bouncing up and down, he tells me that the new equipment would not be installed. In fact, he adds, that he is giving it too us, to take and use anywhere we wanted. From that point in time, he said, ALL of his ore, was going to CHINA, uncrushed at more than three times, what I was paying.

I must say. That really got my attention. Not since, I had been threatened with death, in the bowels of Nigeria, had I been so focused. I opened my mouth to curse, but all that can out was “eep”! His decision was final! There was no room to negotiate. No matter how much I pleaded, sobbed and begged, our iron ore relationship was over. What I had planned, was for a back slapping, bro-hugging, ass kicking session with, an otherwise subservient supplier. What I received was a sucker punch to my solar plexus, and a kick to my nutsack. The only good thing that came out of this, was that I didn’t have to fly back to Mumbai on his shit plane. Rather I booked myself out of Mangalore to London. I was defeated.

And much like India, our previous suppliers of iron ore, one by one, dried up and sold their product too China. It was a devastating time for our business. Of course, it was completely my fault. Nothing I could say, would undo the belief, that I had, personally pissed off all of the iron ore suppliers in the world. So, that, they no longer wanted to supply us. I fought it for a while, but then just muttered to myself and cursed under my breath. Little by little, the Chinese hoards were squeezing the life blood out of us.

All of that conspired to send me into the arctic circle inside of Sweden, in search of another source of iron ore. I might add, that I was only, just ahead, of the Chinese hoards. We had discovered an iron ore mine, about 240 kilometres into the arctic circle, or about 1200km north of Stockholm. This iron ore source was previously known to us, however, at the time, was too expensive to move from inside the Arctic circle to a port in Narvik, Norway, for transhipment to one of our plants. No matter how much, their marketing people had begged us, in the past, we did not see an economically viable use for their ore. At that time we had unending, cheap ore from India, on all of the shipping routes in a, seemingly, unending supply.

That now all changed! One by one, our iron ore relationships started to collapse, as the Chinese, bought more and more of it. Our world had now changed. Suppliers from places like the one in northern Sweden, now became as long lost buddies. Suddenly, their ore, did not seem so hard to deal with, nor so expensive. So shortly after my arrival from India, my ass was 200 km’s into the arctic circle. It was just about as far from Mangalore, India as I could possibly get. I approached this mine with a new attitude. Previously, I had rebuffed the advances of the sales people for this mine. I now hoped, fervently that I had been polite, while doing so.

We arrange a high level meeting between their marketing guys, their company President, myself and a couple of our QA/QC guys. I can remember being asked, before I left, if I wanted to stay in the very famous, local, Icehotel. My response was, “are you crazy, I am from Canada, why would I want to stay in an igloo?” Nothing about the thought, seemed like fun to me. We chose the mining company’s guest house for our stay. So after declining the opportunity to freeze my ass off, in a very big a “igloo”, I was off to Kiruna, Sweden.

However, on arrival we did visit, this magnificent piece of ice architecture. It was something to behold. A full size hotel, had been carved from the ice and then furnished like a four star hotel. Beautiful, but it still didn’t make me, change my mind, about sleeping there. For a normal, comfortable room, where you could survive the night, if you passed out drunk, on top of, or beside, your bed, the cost was around $150.00 per night. If, on the other hand, you wanted to experience the real ice cold quarters, in the deluxe suite, the price would then go up to $300.00. Apparently, that room was kept, realistically, cold. You didn’t want anything sticking out of the furs, if you chose to sleep there. Hmmmmmm?

the mine was located in a place called Kiruna, Sweden. My memories of the area were that is seemed a stark, desolate place. the landscape was mostly rock. However, on the drive in from the airport, I did pass, what seemed like farms. I am not sure, but perhaps they were reindeer farms. they did not look large, maybe a few cleared acres, and small wood frame houses. My impression was that these weren’t particularly affluent looking places. However, I could be wrong. They may have been, raging successes.

We arrived in the afternoon and checked into the company guest house. It was a large, wood frame, “house shaped” building. Inside, it offered two floors of sleeping accommodations. On the entrance level there was a large dining room, possibly accommodating 20 or more guests. It also had a lounge area with a huge fireplace, and a small recreation area. The rooms were solid, the decor, warm and friendly. The bedding was three inches thick. Under this covering, you could have slept outside.

The most vivid memory of my stay there, was the meal that was served in the dining room. It was a set menu, with a little variety of choice. Somehow, this company had attracted one of the best chef’s, I have ever eaten from, to this cold and desolate place. He presented us with a reindeer and musk ox stew, in the traditional lapland style. It was exquisite. The meal started with a carpaccio made from reindeer, roe from a local whitefish, a hard cheese the color of parmesan. Course after course was presented. The dessert was a homemade ice cream with “cloudberries” in a sauce, on top. It was accompanied by the local Akvavit, to wash it all down. I cannot imagine a better presentation and taste, had we been in downtown Paris. Perhaps one of the best meals, I had eaten to that time.

After a great sleep, under 20 pounds of thick, soft, warm bedding, we were off to visit the mine. Breakfast was no less impressive than the dinner had been. We were met by some of the upper management of the mine, including their top guy. They were very cordial and eager to find out what they could do for us. I must say, if my memory is accurate, that I treaded very gently thru this introduction. I was well aware, of the “quickly shrinking” scope of iron ore, available to us, from our traditional sources around the world. My usual approach to negotiation with suppliers, was to apply the “golden rule” on them. Which basically meant, he with the “gold”, “rules”. That meant, I was always in charge of the proceedings. Some may have said, I was a little bit of a bully. However, Deysi said, I was not.

Following a short presentation by the mining staff, and an agreement to find a “common” ground where our companies could work together, we were invited for a tour underground. The mine was located just out of Kiruna, across a lake from the city. It was explained that the ore was in a slab about 300 meters thick, and 4 km long and sloped downwards at a 40 degree angle from the ground, in the direction of the lake and the city. At the time I was there, they were mining along this seam, at about 2500 feet deep. I was told that they needed to go down to about 3500 feet in the next stage. This would necessitate the move of the city of Kiruna to a new location. This meant every building, business, house, apartment, dogsled and doghouse to a new spot. it also meant draining the local lake.

They said this, as a matter of fact, but when I looked out at the city, I could not comprehend, how this could be accomplished. Apparently it was, and I believe, that, today, Kiruna is in a completely new location. Everything was moved, “lock stock and barrel”. Not a thing remains of this once, thriving town and its lake.

Anyway, back to the memory. After our initial meeting, we were invited to go underground and visit the mining operations. I would have eagerly declined. For instance, I would have easily, taken their word for how it looked 2000 feet down. I must say that there was something about being on the top of a mountain or in the bowels of the earth, that always made me feel uncomfortable. It was not that I was about to panic and go mental. However, if someone had come up behind me and made a sharp noise, I can guarantee, that the “manper”, was going to need changing.

So down we went. I remember thinking, that nothing makes you realize, just how insignificant your are, than, being that much at the whim of nature. One tiny movement or shift and we would have been grease spots. I’m not saying I was afraid, but let’s say I was aware. Once in the mine it was quite civilized. It was much like being in an office with no windows. At one point on our descent we stopped at a level, where they had established a mining museum. It was quite interesting, and detailed significant events from the 100 or more years that they had been digging in the earth. Again, I must say that it was quite interesting, but, a certain part of me, kept screaming in my mind, “to get the hell out of there”.

I can tell you, I may have looked relaxed and confident, but I did not feel that way. I could not help, but curse those Chinese villains, for driving me into the Arctic, and underground in this mine. We observed them grinding away at a piece of dark rock. I assumed, that I was looking at iron ore, in its natural state. Finally, to my great relief, we were finished the tour and were taken back up to the surface. I could not wait to get clear of their mine shaft. We then got into a more formal meeting and eventually hammered out an agreement, to exchange their ore for our money. Everyone was happy, in the moment. The Akvavit was broken out and we toasted each other, our agreement, the future and iron ore. All done, it was now time to go home.

To get out of this area, I could fly from Kiruna, back to Stockholm, then to London and finally home to Edinburgh. However, that seemed too simple. Rather, I decided to ride the ore train, from the mine to the Port city of Narvik in Norway. I needed to look at the port facilities and see if we could get Panamax size bulk carriers into it. The size of one of these carriers was such, that once loaded, the equivalent of a six storey building remained underwater. The ride on the company train, was only 90 miles, however, pulling 15 to 20 railcars laden with iron ore, made this a 3 hour process. We travelled over rock, tundra, along the side of some small mountains, skirted boreal forests and passed by the occasional farm. They appeared to be growing hay or some form of a hearty grain.

Had I been in a tourist frame of mind, I would have thoroughly enjoyed the trip. However, I wanted to go home and leave my iron ore problems behind. The 3 hours seemed endless. Instead of relaxing, and enjoying the arctic scenery, I was fidgeting around and making everyone else nervous. After what seemed like innumerable “shunts” off to the side, while waiting for other trains to pass. We crossed over into Norway, and the journey was finally over. I spilled out onto the platform in Narvik. The weather was cold, it was drizzling and overall seemed a little gloomy. It only added to my vision of gloom and doom, related to my iron ore experiences.

However, what awaited me was a thing of beauty. In front of us and spread out for our viewing pleasure, was the deep water, ice free, Port of Narvik. Lined up dockside were some of the largest bulk carriers that I had seem to that time. It was a hive of activity. Iron ore, from dockside was being loaded into this ship. My dreams had just come true. A lot of my worries seemed to disappear. We were in Northern Norway, but as close to our plant at Farsund, Norway as was possible, in the iron ore shipping world. I’m not sure, but I believe I spotted some Chinese looking characters skulking around dockside. It made a small shiver go up and down my spine. Nah! Couldn’t be I thought.

I must apologize for the length of this post, but also thank anyone that reads it. I could go on, however, I will stifle myself and save any further memories of our times in the Arctic Circle for another post. Also all photos I have used, are stock photos borrowed from the internet. Once again, I had no camera on this trip. I guess because Deysi was not with me, so I didn’t feel like I was on holiday.