The Ukrainian Port of Yuzhny in the Black Sea will soon have a new modern bulk handling terminal. The project is being realized by Portinvest LLC, which manages port assets of System Capital Management (SCM) — the biggest Ukrainian business group. The company plans that by 2016 Yuzhny port will be 21 metres deep, which will make it the deepest port in North-Western coast of the Black Sea.
The Law of Ukraine On Sea Ports adopted recently will facilitate the project implementation. The new legislation and existing concession regulations will drive the port sector development
Portinvest has allocated $250m for the project and won support of the Ukrainian Ministry of Infrastructure. The government has shortlisted the hydro-technical works at Yuzhny to the amount of around $160m and the development of railroad as priority strategic projects for Ukraine and will cover their costs.
“The project in Yuzhny is a strategic step both for the company and the regional infrastructure. The strategy of the SCM Group’s transport business development, particularly Portinvest holding, is supported by the research conducted by Roland Berger Strategy Consultants,” said Aleksandr Smyrnov, CEO of Portinvest.
The new terminal will provide a wide range of quality services in handling of steam and coking coal, iron ore concentrate and pellets with the annual capacity of 18mt (million tonnes). The facility will offer additional services such as cargo storage, weighting of cargo in railcars, magnetic cleaning and crushing of coal and automatic sampling for cargo quality analysis.
The project will help cargo owners to optimize their freight costs significantly. Capesize loading is possible only by means of ‘top up at anchorage’ in Ukraine today, which takes 22–30 days. In 2011, Capesize vessels (170,000–230,000dwt) called at Ukrainian ports 90 times and the number is expected to increase by a third in 2012. The new terminal can handle these cargoes within four days alongside the berth without the additional top-up at anchorage.
In 2011, Ukrainian ports exported and transited 26m tonnes of iron ore, mostly to China. Exports can go up today only through the construction of new deep-water terminals. Forecasts suggest that iron ore exports with Cap    size vessels can increase up to 10–12mt per year.
Ukraine’s imports of coking coal need deep water ports and new technology as well. In 2011, the national steel industry imported over 10mt of coal. Sea deliveries accounted for 3.2mt and are expected to reach 5mt. By the time the deep water terminal in Yuzhny is launched, Ukraine will be able to meet all its needs for imported quality coking coal with sea deliveries (10–12mt annually). In particular, Metinvest, one of the biggest players in the mining and steel industry, imports quality coal from own mines in the US. Other major Ukrainian steel companies, such as Arcelor Mittal and the Industrial Union of Donbass, also have regular deliveries from North America. The new terminal will also handle 150,000–170,000dwt vessels with quality coking coal from Australia.
Volumes and delivery geography of coal and coke exports through Ukrainian ports will remain unchanged in the short term. Last year, Ukraine exported 12mt to the countries of the Persian Gulf, Black and Mediterranean seas and India (including transits from Russia). Modern facilities, a favourable location, year-round navigation in the region and high environmental standards ensured with help of technology solutions add to the advantages of the project in Yuzhny.
 
ADDITIONAL INFORMATION
The Port of Yuzhny is situated at the north-western coast of the Black Sea in the non-freezing Maly Adzhaliksky Liman. It is the second biggest port in Ukraine and fourth in the Azov and Black Sea region. The primary cargo traffic destinations include the Black and Mediterranean Seas, the USA, Latin America, Middle East and South-East Asia.
According to the Centre for Transport Strategies, Ukrainian sea ports handled 155mt of cargo in 2011, which is 6.8mt more than in 2010. Iron ore accounted for 26mt, or 17%. The volume of bulk cargo increased by 10.8mt, or 13%, and the amount of grain grew by 2.6mt, or 16 % year-on-year.