September 18, 2006

ONTARIO HOT MIX PRODUCERS ASSOCIATION

Tighter specifications for improved mix designs are placing a strain on aggregate reserves and could cause significant cost hikes in the future as new, distant sources will have to be used.

Aggregates

Rising prices, potential shortage a challenge

New licences not keeping pace with demand

IRWIN RAPOPORT

correspondent

toronto

Ontario asphalt and concrete road builders are facing two key concerns crucial to their industries – the increasing cost and eventual shortage of aggregates.

“Aggregates have been going up faster than the inflation rate, almost forever,” said Mike O’Connor, executive director of the Ontario Hot Mix Producers Association (OHMPA), “but in the last five years, it has been close to the 10 per cent area annually.”

O’Connor said the rising costs create a concern there will be an apparent shortage of quality aggregates in the future. There is increased demand for quality aggregates due to tighter specifications demanded by improved mixed designs, and the province is not issuing licenses to guarantee future demand will be met.

“We’ve had aggregate industry representatives present at our seminars and tell us that the government is not licensing new reserves anywhere near the pace of extraction,” said O’Connor. “So, at some point, you are going to be short of aggregates. If you take the Toronto area — we are the biggest user of aggregates in the province by far — the haulage distance from pits and quarries is increasing every year because the close-to-market pits and quarries are being exhausted.”

Except for some specialty aggregates, Ontario is currently self-sufficient in terms of aggregate supply, but O’Connor says it is “almost impossible” to get new licenses for extraction close to the Toronto area.

The effect is already being felt in annual above-inflation increases. O’Connor says. Based on presentations, the shortage could be felt within five years and will certainly be felt in 10 years. He predicts aggregates will be extracted from various out-of-province locations and be transported long distances to reach Ontario.

Quebec has good aggregates, notes O’Connor, as does the neighbouring state of Michigan, but transportation costs are an issue.

“There is already a significant amount of aggregate being shipped by boat, but most of it is coming from Ontario sources,” he said. “Boat rates are well established, but (we will) have to deal with new shipping owners who presumably are going to want to make reasonable profits and that is going to translate into higher priced aggregates.

“Anything that is going to be transported, whether it is by boat or truck, is going to be greatly affected by the cost of fuel,” he added, “and we’ve seen truck rates increase along with the price of diesel fuel.”

John Hull, president of the Ready Mixed Concrete Association of Ontario, shares O’Connor’s concerns.

“It’s an issue of sustainability,” he said. “For the aggregate that is being used on an annual basis, licenses are not being renewed to replace it. If you use 10 tonnes this year, but you are only licensing six tons next year, eventually it is going to catch up with you. At some point you are following a sliding scale and I know the aggregate industry is concerned about licensing. To make good quality concrete, we need good quality aggregates.”

MTO is looking to use of higher quality pavements and simultaneously reduce the cost of highway construction and extend the lifespan of its roads.

One way this is being done is via perpetual pavements, an asphalt pavement system designed to reduce the strain at the bottom of the asphalt layer, to a significantly lower level compared to standard asphalt road bases.

“This keeps the pavement from cracking from the bottom up,” said O’Connor. “When you put this pavement down, maybe 20 or 25 years from now, you would typically grind 40 to 60 millimeters of the original surface which by then is starting to show some distresses over time because of wear (and weathering). Then you put another 50 mm down and it lasts another 20 to 25 years.

“The base never changes,” he added. “Typically, most pavements are designed for somewhere around 35 years and then you dig them up and replace them with a new pavement, which is quite an expensive prospect.”

A perfect example of a perpetual pavement road is the Don Valley Parkway, the only road in Canada that has won a perpetual pavement award, says OConnor.

“You would swear that it was built five or 10 years ago, but it’s over 50-years-old and is great proof that the system works.”

The MTO has already called one perpetual pavement contract in the Welland area and another contract has just been let on Highway 402.

“We’re hoping make that a demonstration project, along with the University of Waterloo, which houses the Centre for Pavement and Transportation,” says O’Connor. “This will be a good way to monitor that it is working the way it should. That will probably happen next year. There is a lot of work to be done before they end up putting down the asphalt.”

A third project is planned for Highway 7 near Ottawa.

“Some of the municipalities are now looking at it,” says O’Connor. “I believe Hamilton has a design for the Red Hill Expressway. Perpetual pavement costs a bit more to build, but not a lot. Our designs are pretty robust already and so it really doesn’t take a lot more asphalt to get a dramatic increase in the longevity of the pavement.”

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