While steelmaking coal has rebounded from its prolonged bear market, some skepticism still looms for the future of B.C. mineworkers.
Last year, Conuma Coal Resources Ltd. bought three steelmaking coal mines from Walter Energy, and it has already successfully restarted two of them, the Brule and Wolverine mines.
The third mine near Willow Creek and Chetwynd is expected to reopen in the summer of 2017, but the future of that mine is still in limbo as the market continues to fluctuate.
“The market has taken a strong upward trend toward the end of the year but it has dropped pretty drastically over the last month,” Ken McCoy, CEO of ERP Compliant Fuels, told Business in Vancouver. “Actually, in the last few weeks it has dropped pretty significantly.”
After a long slump in steelmaking coal prices, which dropped from US$300 per tonne in 2011 to under US$80 per tonne in 2015, the export showed an impressive rebound at the beginning of 2017, prompting Conuma to jump on the acquisition. Conuma Coal is a Canadian company whose owners also own U.S.-based ERP Compliant Fuels.
The reopening of the Brule and Wolverine mines has already had an effect on the local economy, said Tumbler Ridge Mayor Don McPherson.
“You can see it in town; it’s definitely busier, businesses are beefing up and it has been a real positive for us and for the people in town,” said McPherson. “There is a brighter outlook for the future.”
Despite the high cost of running the Wolverine and Brule mines, McCoy said he is confident that the industry in B.C. has the potential to compete on a global scale.
“It is very good quality coal that is situated to go into Asia, so it is very strategic,” McCoy said. “Right now, Australia controls the whole Asian market, and the customers really need competition for Australia, so this is a natural [option] because of quality, volumes and location.”
Australia, which is the No. 1 supplier of steelmaking coal to China, exported 26.8 million tonnes last year to that country.
In January 2017, coal exports at Ridley coal terminal in Prince Rupert were up to 439,280 tonnes compared with 219,231 in the same month last year. At Port of Prince Rupert, the terminal exported 519,708 tonnes of coal in January 2017.
If the market stays strong and the third mine is opened, Willow Creek mine stands to employ roughly 200, adding to the nearly 400 at Brule and Wolverine.
Steelmaking coal, also known as metallurgical coal or coking coal, is B.C.’s second most valuable export.
McCoy said his company is seeking to explore further potential in the province.
“We are looking for other opportunities in the area; the government has been very good to work with, the First Nations were very co-operative and we liked the work ethic of the employees. All these are additional reasons why we would like to expand in British Columbia.”
