Commercial port, pellet plant considered for northwest Ontario

By Katie Fletcher | March 24, 2015

At the site of the former Norampac paper mill in Red Rock, Ontario, on Lake Superior’s north shore, plans are in the works for a torrefied wood plant and commercial deep-water port for pellet exports. Two subsidiary companies, the Port of Algoma of Essar Ports Global Holdings and North Port Canada of Riversedge Developments Inc., signed a 15-year memorandum of understanding (MOU) on March 18 to design, build and operate a port facility at the site. 

Riversedge Developments, a land-use development company from Sault Ste. Marie,  Michigan, purchased the abandoned mill site in March 2014. “I was approached by the town [Red Rock] to see if I could help them find investors and opportunity surrounding the property,” said Justus Veldman, CEO of Riversedge Developments. “It is a very significant property at the base of Red Rock, and the base of highway 11, down from the Ring of Fire, so upon looking at the property we decided to invest into it.”

Essar Ports is an international port and logistics operator based in India, which decided to establish the Port of Algoma for its strategic location as a focal point of transportation from the Lake Superior region to Lakes Huron and Michigan, among other reasons. Essar Ports is linked to the Essar Global Fund, an international investment fund with ownership in Essar Steel Algoma in the Sault, and other industrial assets. The Port of Algoma has plans to build a regional port facility in the Sault to service namely Essar Steel Algoma, amongst other industries and manufacturing. “We started doing analysis on freight and the opportunity around bundling freight together in Sault Ste. Marie from the different feeder ports,” Veldman said. “I intend us to build a feeder port in Red Rock.”

Besides the port, Veldman said due diligence is ongoing to look at a pellet mill for the North Port Canada project, and other industrial uses on the site. “The challenge around a pellet plant anywhere in northern Ontario is wood allocation,” Veldman said. “We are doing a fairly significant study on available resources around the Red Rock area. The other side of that is obviously an offtake agreement with users of biofuel, so there is two parallels.”

Riversedge Developments will not own or operate the facility, the company will partner with a group to do so. “At the end of the day, we’re in the business of taking abandoned industrial real estate and adding value to it by bringing in jobs, and bringing infrastructure to the site, which will hopefully enable industrial users to come and build their facility,” Veldman said.

He added that they are actively pursuing two relationships that do pellet torrefaction for the North Port project.

Currently, Riversedge Developments is restoring the mill site property, which, according to Veldman, is associated with significant costs, both environmental and infrastructural related. “We started in June of 2014, and most of the restoration work will be done by the end of this year,” he said. “We can hopefully start construction in 2016.”

Veldman believes the site has a unique position. Not only is the port the most northern port of Lake Superior and closest to the Ring of Fire, according to Veldman, but the site is positioned to have natural gas on site, rail, water and truck access, and industrial power. “Basically we are shovel ready for any type of industrial application to come that requires that type of infrastructure,” he said.