SWARS 2017 Semi-Annual Meeting “Leader-Ship” – The Shipper Perspective Dale Diulus, P.E., Senior VP Salt River Materials Group October 5, 2017
SWARS Semi Annual Meeting “Leader-Ship” – The Shipper Perspective 1 “Leader – Ship” – The Shipper Perspective
» Salt River Materials Group/ Phoenix Cement Company
» SRMG’s Pozzolan Business
» Importance of Rail, Truck & Logistics Partners
» The Reward: Putting All of the Pieces Together
SWARS Semi Annual Meeting 2 “Leader-Ship” – The Shipper Perspective Leadership
SWARS Semi Annual Meeting 3 “Leader-Ship” – The Shipper Perspective Salt River Pima-Maricopa Indian Community
• The Salt River Pima-Maricopa Indian Community (SRPMIC) is a sovereign tribe located in the metropolitan Phoenix area (Scottsdale) • The Community proudly owns and operates several successful businesses
Entertainment Development Heavy Industry
SWARS Semi Annual Meeting 4 “Leader-Ship” – The Shipper Perspective Evolution of SRMG:
Salt River Materials Group
Phoenix Cement Company (PCC) Salt River Sand & Rock (SRSR)
• SRP-MIC founded SRSR in 1980 • SRP-MIC purchased PCC in May 1987 – 30 Years Ownership • In 2003 SRP-MIC merged PCC and SRSR into SRMG
• SRP-MIC Culture: 7 Generations’ Vision
SWARS Semi Annual Meeting 5 “Leader-Ship” – The Shipper Perspective SRMG Supplies Ingredients for Concrete
Cement is the gray powder, that when mixed with Water, Aggregates & Fly Ash makes Concrete
– Portland Cement –bulk & sack – Class F & C Fly Ashes & Natural Pozzolans – Aggregates (Sand and Gravel) Cement is to Concrete as Flour is to Bread
SWARS Semi Annual Meeting 6 “Leader-Ship” – The Shipper Perspective Salt River Materials Group
• SRMG is a leading supplier of: – Portland and Masonry Cements – Fly Ash Class F & C – Natural Pozzolans – Construction Aggregates in Metro Phoenix – Construction Landfills in Metro Phoenix – Light Weight Aggregates from Bottom Ash – Natural Gypsum Products • 325+ Employees; 25% Native American • Sales in 8 States
SWARS Semi Annual Meeting 7 “Leader-Ship” – The Shipper Perspective Construction Aggregates (Sand & Gravel) Metro Phoenix Market • 7 strategic locations across the Phoenix Metro area • SRMG offers ready-mix concrete producers the opportunity and convenience to locate batching equipment on-site • Produces and sells over 3 million tons/year • Active mining at Dobson, Beeline, Higley, 67th Avenue and Glendale Plants • 4 Construction Landfill Operations Hanson Aggregates Batch Plant
Arizona Materials Batch Plant Landfill Operations at Dobson Facility Glendale Aggregate Facility
SWARS Semi Annual Meeting 8 “Leader-Ship” – The Shipper Perspective Phoenix Area Facilities 5 Cement/Fly Ash Terminals* + HQ + 7 Aggregate Mines *includes 4 Rail-served Terminals (2 BNSF/Open to UPRR; 1 BNSF; 1 UPRR)
SWARS Semi Annual Meeting 9 “Leader-Ship” – The Shipper Perspective Cement Plant ---- Clarkdale, Arizona (just south of Sedona)
SWARS Semi Annual Meeting 10 “Leader-Ship” – The Shipper Perspective Clarkdale Cement Plant
• Clarkdale Cement Plant opened in 1959 • Developed to supply Cement for Glen Canyon Dam • $130 Million modernization and expansion in 2002 • Doubled Capacity to 1.2 Million Tons/Year • MSHA Safety Site – 1,000 Days No Lost Time Accidents • AZ Central RR serves with connection to BNSF at Drake • Cement Sales in Metro Phoenix & Northern Arizona Glen Canyon Dam, Page AZ
Type IP, Clarkdale Clarkdale Cement Plant Clarkdale Cement Plant and Quarry Aerial Sacking Operations SWARS Semi Annual Meeting 11 “Leader-Ship” – The Shipper Perspective Clarkdale Cement Plant
Coal Stockpile Coal & Pet Coke Railcar Bottom Ash Stockpile Gypsum Stockpile Clarkdale Cement Plant Clarkdale Cement Plant Clarkdale Cement Plant Clarkdale Cement Plant
3000 F Degrees Inside Kiln Kiln, Clarkdale Cement Plant Preheater Tower Clarkdale Cement Plant Clarkdale Cement Plant
SWARS Semi Annual Meeting 12 “Leader-Ship” – The Shipper Perspective Safety is a CORE VALUE
• Priorities can, and often do, change; SRMG’s commitment to Safety NEVER changes! • Safety Commitment from All levels of SRMG: – Ownership (SRP-MIC) – Board of Directors – Management – Operations – Employees • Compliance with MSHA, OSHA, Utilities’ Standards • Housekeeping is one SRMG key to Safety Success SAFETY is One area where EVERYONE can be a LEADER !
SWARS Semi Annual Meeting 13 “Leader-Ship” – The Shipper Perspective Origins of the word: “Pozzolan”
SWARS Semi Annual Meeting 14 “Leader-Ship” – The Shipper Perspective Historical Overview Pantheon in Rome
SWARS Semi Annual Meeting 15 “Leader-Ship” – The Shipper Perspective What is Natural Pozzolan?
• Fly Ash is mostly Silica, Aluminum, Iron & Calcium (the impurities in coal that do not burn); ASTM C-618; Class F or Class C (C is from PRB coals) • Natural Pozzolan chemistry is similar to Fly Ash; ASTM C-618; Class N • Used as concrete additive before fly ash • Glen Canyon Dam had 200,000+ tons Natural Pozzolan • Mostly from volcanic origins, not “man made” • Mined, crushed, dried, & finely ground • Makes concrete more durable • “Green” product, naturally occurring • Natural Pozzolan, in a Secondary Reaction (similar to how Fly Ash reacts), also forms more “Glue” in Concrete, making it stronger
SWARS Semi Annual Meeting 16 “Leader-Ship” – The Shipper Perspective Where Does Fly Ash Come From? (Note: Fly Ash is a Man-Made Pozzolan) • Fly ash is a very fine powder residue that is captured in bag houses and precipitators by the coal-burning power plant • Utilities sell fly ash to their contracted Marketers, who in turn recycle, then sell, the fly ash for use in concrete and other applications • Fly Ash reacts in concrete after the initial cement + water reaction; Fly Ash forms more “Glue” & makes concrete stronger, denser and more durable.
SWARS Semi Annual Meeting 17 “Leader-Ship” – The Shipper Perspective This is Fly Ash
SWARS Semi Annual Meeting 18 “Leader-Ship” – The Shipper Perspective Magnified Fly Ash Particles Are Spherical
SWARS Semi Annual Meeting 19 “Leader-Ship” – The Shipper Perspective Fly Ash Production & Distribution
SRMG has Fly Ash sources in Arizona, New Mexico & Utah
SWARS Semi Annual Meeting 20 “Leader-Ship” – The Shipper Perspective Fly Ash Production & Distribution Facilities in 6 Southwestern US States
Railcars (Small Cube PD) Silos to Trucks (Pneumatic Trailers) to Silos at Distribution Terminals to Customers
SWARS Semi Annual Meeting 21 “Leader-Ship” – The Shipper Perspective Fly Ash Production & Distribution Rail Statistics • SRMG Leased Railcar Fleet: – 40 open-top, 263k pound, steel coal/coke cars – 513 small cube PD & covered hopper, 286k pound pozzolan cars • ARI developed new prototype 3,720 cubic foot small cube PD car for SRMG (successful; now 126 cars leased) • SRMG 2017 rail = ~7,000 carloads
SWARS Semi Annual Meeting 22 “Leader-Ship” – The Shipper Perspective Pozzolan Sources & Distribution Network
SWARS Semi Annual Meeting 23 “Leader-Ship” – The Shipper Perspective Arizona Public Service Cholla Power Plant SRMG Facility
• Continuous Fly Ash contract since 1973 (44 Years) – VISION! • 24/7 operation / Classification System (1985) • Truck & Rail; BNSF at Joseph City, AZ • +11,000,000 (Eleven Million) Tons Fly Ash Recycled (and counting!!!!)
Cholla Facility Bottom Ash Screening Facility at Cholla Power Plant Cholla Auto Sampler System
SWARS Semi Annual Meeting 24 “Leader-Ship” – The Shipper Perspective APS Four Corners Power Plant SRMG Facility • 24/7 Fly Ash Operations / Classification System (1997) • Bottom Ash – Raw feed for cement manufacturing • Truck Only Loading at 4C Plant (no Rail) • ~5,000,000 (Five Million) Tons Fly Ash Recycled
Four Corners Beneficiation Facility
Cenospheres Thickening Tank at Four Corners Loading Bottom Ash Into Truck on Scale
SWARS Semi Annual Meeting 25 “Leader-Ship” – The Shipper Perspective Gallup Truck-to-Rail Fly Ash Transload Facility • 400,000 Tons/Year (3,600 Railcars/Yr); 1998 • Co-located with Lhoist; lime railed in then trucked to 4C Power Plant; Fly ash trucked 110 miles back to Gallup – VISION! • Fly Ash loaded into Railcars on Rail Scale
Gallup Truck/Rail Facility for Lime & Fly Ash
SWARS Semi Annual Meeting 26 “Leader-Ship” – The Shipper Perspective Tri-State Generation Escalante Power Plant SRMG Facility • Contract since 2001 • Truck & Rail; BNSF at Prewit, NM • ~2,000,000 (Two Million) Tons Fly Ash Recycled • Provide switching services for McKinley Paper Co. Escalante Facility
SRMG Office Trailer & Lab with Rail/Truck Scale SRMG Railcar Mover Switching McKinley Paper Co at Escalante
SWARS Semi Annual Meeting 27 “Leader-Ship” – The Shipper Perspective PNM San Juan Power Plant SRMG Facility • 24/7 Fly Ash Operations / Classification System (2002) • Truck Only Loading at SJ Plant; Fly Ash trucked to Gallup Transload for Rail • ~2,000,000 (Two Million) Tons Fly Ash Recycled
San Juan Facility
SWARS Semi Annual Meeting 28 “Leader-Ship” – The Shipper Perspective Salt River Project Coronado Power Plant SRMG Facility • Acquired Contract in 2016 • Truck & Rail; BNSF at St. Johns, AZ • Selling 100% of Fly Ash produced (~100,000 tons/year of Class C)
Coronado Facility Coronado Fly Ash Auto Sampling System
SWARS Semi Annual Meeting 29 “Leader-Ship” – The Shipper Perspective May 2017 Concrete Construction Magazine Article
SWARS Semi Annual Meeting 30 “Leader-Ship” – The Shipper Perspective New Blending Units at Phoenix 19th Avenue Terminal • Railcars from Gallup (Class F Fly Ash) and Coronado (Class C Fly Ash) • Precision blending to create Class F Fly Ash from F/C blend • Meets AZ Dept. of Transportation and ASTM C-618 specifications • Net Impact: increases supply of Class F Fly Ash in AZ market –VISION! • Rail car capacity on 19th Ave Terminal tracks = 54 railcars
SWARS Semi Annual Meeting 31 “Leader-Ship” – The Shipper Perspective Deseret Power Bonanza Power Plant SRMG Facility
• Obtained long-term Fly Ash contract effective March 01, 2017 • ~200,000 Tons/Year Class F Fly Ash • Truck Only Loading; Transload to Rail at Provo • Shipments began June 01, 2017
SWARS Semi Annual Meeting 32 “Leader-Ship” – The Shipper Perspective Business Model for Bonanza
SWARS Semi Annual Meeting 33 “Leader-Ship” – The Shipper Perspective Provo Truck-to-Rail Fly Ash Transload Facility
• Barney Trucking contracted to truck fly ash from Bonanza to Provo and transload into SRMG railcars • Utah Railway (G & W) Provo Yard leased track • Dual-served (UPRR & BNSF) • 80,000 Tons/Year = 700+ Railcars • Destinations in Northern California, Vegas & Arizona Transloading from Truck to Railcar
Bonanza Plant to Utah Railway Provo Yard
SWARS Semi Annual Meeting 34 “Leader-Ship” – The Shipper Perspective SWARS Semi Annual Meeting 35 “Leader-Ship” – The Shipper Perspective Destination Terminals for Fly Ash Distribution
Stockton, CA (OmniTrax short line railroad) Bakersfield (QDC), CA
Fontana (Budway), CA (Kaiser)
Sacramento (McClellan), CA Lower Buckeye, AZ (Sacramento Valley RR) (Phoenix) (aka Patriot Rail)
SWARS Semi Annual Meeting 36 “Leader-Ship” – The Shipper Perspective CalPortland Cement National City (San Diego, CA) Terminal also at Port of Stockton (not pictured)
SWARS Semi Annual Meeting 37 “Leader-Ship” – The Shipper Perspective Panaca Facility
• ~7,000 acres Natural Pozzolan reserves in eastern Nevada – VISION???
• Natural Pozzolan can be a substitute for Fly Ash in concrete
• 50,000,000 – 100,000,000 (Fifty to One Hundred Million) Tons of Pozzolan
Panaca Natural Pozzolan
SWARS Semi Annual Meeting 38 “Leader-Ship” – The Shipper Perspective Panaca Natural Pozzolan – In Development
Panaca to Caliente SWARS Semi Annual Meeting 39 “Leader-Ship” – The Shipper Perspective United States Marines
• Quote from Clint Eastwood in movie called “Heartbreak Ridge”:
• “Improvise, Adapt, and Overcome”
SWARS Semi Annual Meeting 40 “Leader-Ship” – The Shipper Perspective SAV & Sacramento Terminal
SAV Sacramento Terminal
SWARS Semi Annual Meeting 41 “Leader-Ship” – The Shipper Perspective Oroville Dam Damaged Spillway
Oroville Dam Damaged Spillway
SWARS Semi Annual Meeting 42 “Leader-Ship” – The Shipper Perspective Oroville Dam Spillway Repair Project
SWARS Semi Annual Meeting 43 “Leader-Ship” – The Shipper Perspective Oroville Dam Kiewit Roller Compacted Concrete (RCC) Plant
Griffin & Alegre Truck Unloading at RCC Plant
SWARS Semi Annual Meeting 44 “Leader-Ship” – The Shipper Perspective Oroville Dam Spillway Repair Project – RCC & Structural Concrete
SWARS Semi Annual Meeting 45 “Leader-Ship” – The Shipper Perspective Leader – Ship Questions?????
SWARS Semi Annual Meeting 46 “Leader-Ship” – The Shipper Perspective