Shell and one of its lubricant distributors recently opened a terminal and supply hub in northern Nevada dedicated to serving mining companies in the area.
Sources said such facilities help cope with the long distances and large lubricant demands that the industry faces.
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This terminal is about four and a half hours from our mine, Amanda Hilton, general manager of KGHM Polska Miedzs Robinson Mine in White Pine County told Lube Report. Prior to this, the closest such terminal [supplying Shell lubricants] was about a day away. We use large volumes of lubricants, and occasionally we need them on short notice, so transport distance is a big factor for us.
Located in Winnemucca, Nevada, the new terminal includes storage tanks with combined capacity of 155,000 gallons, a warehouse and access to a rail spur. More than three years in development, it began operating approximately two months ago. Shell and distributor Silver State Petroleum held an opening ceremony last week.
It is a differentiator for Shell to have a distribution hub like this one dedicated to servicing our mining customers in this remote region to ensure security of supply and competitive product transportation costs, Shell Oil Co. spokeswoman Pamela Rosen told Lube Report.
Mining is a key industry in Nevada, and the northern part of the state is concentrated with gold and copper mines. Robinson Mine is an open pit operation producing mostly copper and smaller amounts of gold.
Gold and silver mines are large-scale operations, said Tom Van De Pol, co-owner of Silver State and its California-based parent company, Van De Pol Petroleum. Reliability and maximizing up-time for equipment are paramount. A mine never wants to be shut down in any aspect when prices are high.
Ideally companies anticipate lubricant needs and plan ahead for deliveries, he said, but accidents occur, and then companies need large volumes of lubricants fast.
These shovels that they use have buckets that grab 20 to 40 tons of material at a time, so were talking massive pieces of equipment, he continued. If theres some kind of accident that causes a leak, they can lose 500 gallons of hydraulic fluid in two minutes. Then they need fluid to replace it in a hurry.
Shell bought the Winnemucca site in late 2014 after reaching an agreement with Van De Pol Petroleum, which was already distributing Shell lubricants in California, to operate a supply hub in northern Nevada. Shell would build the facility and lease it to Silver State, which would take ownership after 10 years. At the time of its purchase, the property was the only available site in northern Nevada with access to a rail spur, Van De Pol said, adding that such access is important because it allows a terminal to receive bulk deliveries of lubricants by rail, which is more economical than truck delivery.
Globally Shell is a large supplier of lubricants for the mining industry, but its presence in the U.S. industry is smaller. Shell officials said the Winnemucca terminal should help the company begin to change that.