After announcing the sale of Quintette late last year, Teck has closed a deal with Conuma that will see the mine re-open under new ownership, hopefully sometime later this year.
The announcement that the two mining companies were planning the transaction came Dec 19, after months and years of speculation. Conuma will pay Teck $120-million, plus 25 percent in net profits once Conuma recovers its investment in Quintette.
Teck was looking at reopening the mine a decade ago. As part of that, they were able to get a mines act permit in 2013, which will now be transferred to Conuma.
However, Conuma will still need to cross a number of regulatory hurdles before they re-open, including a water effluent permit.
And, of course, the company will need to put in work to complete a mine plan and to get the plant up and running after 20 years of sitting idle.
And finally, the company needs to work with CN to make sure the rail into the mine is in shape.
“There’s a modest amount of rail rehabilitation that needs to be done,” says Conuma Chief Executive officer Brian Sullivan. “The track is in good shape between Wolverine and the old Peace River Coal loadout.”
Peace River Coal was in operation until 2014, before it was put into care and maintenance. Beyond that, says Sullivan, there’s about five kilometres of track to get to Quintette. “There are a few places where there’s been wash-outs. Areas that need to be fixed. There’s a small waterway the track crosses, and we’d have to replace some culverts etc. So our plan is to ship the coal out of the Quintette preparation plant using the facilities that are there. Doing so would avoid trucking coal all the way back to the our preparation plant at Wolverine. Our contract with CN would have to be modified, but we don’t expect any issue in terms of the volume or capacity on the Tumbler Ridge subdivision.”
If all things go well, says Sullivan, he expects the mine will start operating in October of this year.
The plan is to keep mining the current Perry Creek deposit until this summer or fall, and then begin wrapping up operations there and moving people and equipment over to Quintette.
Quintette has 42 million tonnes of known reserves and at least 200 million tonnes estimated reserves. If Conuma keeps mining at 1.5 million tonnes per year, Conuma is looking at being at Quintette for at least the next 25 years.
And for now, that’s the plan. “We would not expect to have a significant increase in the number of people,” says Sullivan. “The people who are currently running the Wolverine plant would likely go over and run the Quintette plant. This is early days, but the equipment and people that are mining to the end of Wolverine will be the most likely candidates to start up Quintette. We don’t expect the influx of hundreds of new people looking for housing, pushing the housing prices beyond reason. And the sorts of things that we see, you know, in Shetland when the pipeline was coming through those sorts of things. The impact on Tumbler Ridge will be positive in that a long lived asset is being brought back into production. I think that’s a tremendous benefit for Tumbler. But in terms of the people impact, don’t expect the land rush type scenario where you’ve got people pulled over on the side of the road sleeping in campers.”
Teck retains a “net profits interest” in Quintette. This means that as long as the mine operates, they will get 25 percent of the profits. With the potential of hundreds of millions of tonnes of reserves at the mine, that could be a very long time, indeed.
Trent is the publisher of Tumbler RidgeLines.
