Above photo: Peace River Coal from across the valley.
According to Conuma CAO Brian Sullivan, everything is in place for their purchase of Peace River Coal (PRC), except for the okay from the Federal Government.
He says the company has signed an option agreement with Anglo American, the current owners of Peace River Coal. “Back in the spring we signed an option agreement and we had an extended period to evaluate the property,” says Sullivan. “Most of that option period was taken up with the issues surrounding water and wildlife that Peace River Coal has had in its past, things like caribou and water treatment. We know the resource there is something that will go well with our current portfolio. But the question is: can we get to a place with the indigenous nations and with the regulators where they could see a path to PRC being open again. We have spent most of the time from spring until now discussing how do we use PRC as a catalyst for restoring the southern herd of the southern group of the Quintette herd of the southern mountain caribou.
“We have been working very closely with Saulteau and West Moberly, and their qualified professionals in wildlife biology on a plan to contribute land and resources, in the form of relinquishing some of the coal tenure that we have.”
Sullivan says the discussions have been between five groups: Conuma, Anglo American, government regulators and representatives from Saulteau and West Moberly. “Anglo American was very interested that when they left this property they weren’t seen as running away and leaving a problem behind,” says Sullivan. “They were very interested in making sure whoever was the next owner of that property shared their view about what needed to happen in the future.”
He says Conuma has been focused not on growing the biggest mines possible, but in reducing their impact on the land. “We have been discussing how we reduce our use of land and how we become smaller and more efficient. For 50 years, resource companies have impressed the public and investors with how big they are. So, you look at presentations from even just five years ago, and resource companies were saying ‘we have a resource base that stretches from Fort Nelson all the way down to the Alberta border and they show you huge tenure maps.’ And that flies in the face of where things have been going. You can’t operate that way as a resource company anymore. You have to be much more measured and thoughtful about where you plan to go and give the communities as much notice as possible and obligate yourself to operating on a small a footprint as possible, not as large a footprint.”
For Conuma, that means keeping in touch with all the stakeholders, and keeping them abreast of their long term plans. “It also means to do that in partnership with the communities and the indigenous nations,” he says. “Only that way will there be any success. We are demonstrating that we want to, to the extent possible, concentrate on areas that have been disturbed already or adjacent to areas that have been disturbed already. We are working to identify where the caribou are right now so that we can protect them and not continue to disturb or fragment their habitat by going places that they may have gone for refuge.
“For example, the province tags caribou and we have a pretty good understanding of where they are now locally. And we want to protect those areas and not do further damage to their viability by making them move every 10 or 15 years as you continue to develop for industrial purposes. So that’s what this plan is about. It’s taken six months to get a framework of how we will go forward. And that involves Conuma working with the nations. We are not going to develop these areas that had project names attached to them in the past, but they’re too sensitive because they’re caribou habitat or some other reason.
He says they’re also going to be funding efforts—to be managed by the first nations communities—to help further recovery efforts for caribou.
This sort of talk makes local outdoor recreators worried. PRC sits adjacent to the Core Lodge area, which is one of Tumbler Ridge’s prime snowmobile areas. As part of South Peace Winter Motorized Recreation Management plan, which came into effect two years ago, nearly half a million hectares were closed to riding, including much of the Bullmoose riding area and parts of the Wolverine riding area. The Core Lodge has remained untouched, so far, but riders are worried that will change with these new agreements. “I sure hope we aren’t losing another huge riding area with no consultation with local residents that use this area,” says Tim Croston, president of the Grizzly Valley ATV cCub. He says the Babcock area was recently closed as it is now part of the active mining at Quintette. “Mining is the main source of income, but it’s not the only source. Tourism played a big part in keeping this town alive when mining was completely shut down for several years.”
Sullivan says he doesn’t know what impact it will have on the local riding areas. “What I will say is, I think all of us—industry first—have to be more sensitive to wildlife habitat. So, certainly the most impact to habitat has been fragmentation by things like mining or oil and gas or utilities or logging. We’ve got to get a better handle on that.
“But there’s also certainly an impact that’s orders of magnitude lower from motorized exploration of the backcountry. And I don’t have any idea how that’s going to shake out. We have to take the first step by saying that we’re not going to be part of the problem by creating a large scale industrial disturbance. Then what happens in terms of how is the land shared between outdoor enthusiasts and people who want to appreciate the beautiful places and wildlife? That’s above my pay grade. But I certainly think that my personal opinion is that is all things considered, we’d like to have the caribou come back to this area. And we all have to figure out how, if you agree that this area is better off if there are native species of wildlife, then we all have to, everybody who has a potential impact has to think about what they can do.”
But all this is a future worry, as the sale hasn’t actually gone through. “We’re actually buying the shares of PRC from Anglo American,” he says. “We did our due diligence, got to a point of satisfaction and triggered the option. So, for all intents and purposes, the only thing standing between us being the owner of PRC is a review by the federal government, where they review any transaction this size to make sure it’s not anti-competitive, not creating a monopoly or worsening a monopoly.”
He says Conuma has made a filing with the federal government and is hoping to hear back in the next month. “The federal government should recognize this is a mine that is sitting idle and wasn’t going to be reopened. So if anything, it’s pro-competitive, because we plan to bring it back into production.”
Assuming that they hear back from the federal government by mid-November and the sales is a go, they will start working on a restart plan, in discussion with the federal and provincial governments and the local first nations.
One of the big issues off the top is a new water treatment plant to handle the water flowing into the Babcock Creek Watershed. There is a water treatment plant currently treating water flowing into the Gordon Creek watershed.
The current water treatment plant can handle about 400 gallons a minute, but Sullivan says the one for Babcock Creek would be larger.
Once that one is built, he says the plan would be to start mining, with a target of just under a million and a half tonnes in the first year, and about two million tonnes after that. “I think two and a half is a little bit aggressive for that reserve,” he says. “There’s a lot of non-working days there. It’s very windy. It’s very…everything. It’s got a different challenge each season. It’s a more challenging environment to work in. It’s further from the rail loadout. So it’s not going to be the scale of Quintette. It’s got a limitation because you’ve got to get the coal from Roman to the coal loadout.”
On that topic, he says, the plan is to bring the coal to the plant at Quintette, and not the current location by the heavy industrial park. “One of the benefits is we wouldn’t be running two loadouts. It will result in less infrastructure for the town. We won’t have the trucks going all the way down the hill. We would like to be able to connect that to the conveyor system we have coming down off of Little Windy, direct into the plant at Quintette.”
Because they wouldn’t need the same amount of infrastructure at PRC, Sullivan expects to see about 300 people working at the mine. “It’ll be smaller than in the past because we won’t have the plant employees. They have a pretty good shop facility up there so that I expect we would continue to run that. We would probably run four shifts like we do elsewhere. Right now we’re looking at two shovels and a truck spread so if I do back of the napkin math for four crews like we have at the other operations, that probably ends up in the neighborhood of about 300 people.”
So, would PRC be treated as another pit for Quintette? “I wouldn’t necessarily call it a pit extension but the two assets should have been developed together. Fifty years ago they should have been developed together. So this will allow us to blend the products together. The best thing that you can have in mining is optionality; if you’re having a problem in one area, you can you can fix that and focus on something else. I would certainly call it a great compliment to Quintette.”
Trent is the publisher of Tumbler RidgeLines.
