Two Vancouver-based mining companies are seizing on the abundance of natural gas in the Peace region to build liquefied natural gas plants in Fort Nelson to supply new mines planned for the Yukon and Northwest Territories.
Casino Mining Corp., a subsidiary of Western Copper and Gold (TSX:WRN), and Selwyn Chihong Mining Ltd., have signed a memorandum of understanding with Calgary-based Ferus Natural Gas Fuels Inc. to build an LNG plant in Fort Nelson.
The plant would supply LNG to new mines the companies are developing: the Casino copper-gold mine in the Yukon and Selwyn’s zinc-lead mine, which straddles the Yukon-Northwest Territories.
The companies say using LNG instead of diesel to provide power to the mines will not only be less costly, but will reduce CO2 emissions.
"The use of LNG instead of diesel in our operations will significantly reduce the cost of power generation and will eliminate 140,000 tonnes per year of C02 emissions over the current 22-year mine life," said Western Copper and Gold CEO Paul West-Sells.
Selwyn Chihong project estimates using LNG instead of diesel will avoid 115,000 tonnes per year of CO2 over the mine’s estimated 11-year life.
But lower emissions are essentially an environmental dividend. There are no incentives to use LNG rather than diesel, as the Yukon has no carbon tax or cap and trade. It's simply "signifantly cheaper" than diesel, said Maurice Albert, vice president of external affairs for Chihong Mining Ltd.
The $200 million plant will employ 25 to 50 people during construction. Once built, the LNG will be trucked roughly 800 kilometres to the mine sites, where the LNG will be used to produce power for the mines, which are off the Yukon and NWT grid.
