For five consecutive years, investment in coal exploration in BC had been on the decline. But last year, coal producers increased their exploration budgets and new players entered the market.
Surprisingly, exploration activity increased not just along the Eastern edge of the province, but also picked up in the northwest and north central regions.
By the end of the year, spending on exploration had increased 50 percent, to $50 million.
In the Northeast, drilling was up 434 percent, to 15,103 m, versus 2,830 m in 2017. Mining companies spent six million on exploration in the Peace River Coal Fields, up from two million the year before, an increase of 217 percent.
More importantly, early stage exploration is up dramatically, and in 2018, grassroots and early stage exploration, which drives the future of mining development, made up 44 percent of the total exploration expenditures across the province, up from 14 percent in 2014.
Coal prices seem to have settled, with average prices sitting around $189/Tonne, and the price has climbed to about $200 USD/Tonne for the first quarter of 2019, the highest its been in five years.
The province shipped more than 31 million tonnes of coal, making it the most valuable mined product in terms of overall sales, and production value was $6.31 Billion, up from $5.96 Billion in 2017. Overall, coal brought in about 58 percent of mineral sales in the province.
Most of that came out of the mines in Southeast BC, but Conuma has been ramping up production, bringing Willow Creek back on line in June of last year, and is on track to produce over five million tonnes in 2019 between its three mines, up from the 4.8 Million in 2018.
The province issued 64 new coal license applications, covering 67,600 ha, six coal licenses (6,369 ha) and one new coal lease for the Murray River mine, which received it’s mines act permit. The company has yet to decide whether it is going ahead with the project (see story elsewhere in this issue).
It’s not all good news. Glencore’s Sukunka project is still on hold, after the EA process was suspended in 2015.
The proposed mine would start as a surface mine, producing 1.5 to 2.5 million tonnes of steel-making coal per year, with a potential to increase to six million tonnes, with the addition of an underground component. It has a projected mine life of 20 years.
The mine would employ 700 workers during construction and 250 once the mine was in operation.
The Environmental Assessment Office said there was a “lack of detail related to mine planning, geotechnical information, geochemistry and water quality predictions.”
Since that time, there has been no attempt made by the company to re-submit the application.
And Anglo American remains mum about the their Trend and Roman pits, despite hinting a few year’s back they might look at reopening the project once coal prices settled down.
Teck’s CEO has mentioned Quintette is being put on the back burner, and, in their quarter 1 earnings call, reiterated that point, saying “there’s no plans for Quintette in the near term.”
Donald Lindsay cautions against people thinking Quintette would be a short term project for the company. “We are working longer term to rebalance the portfolio,” he said last year. “We obviously, are a little bit overweight, steelmaking coal. Not that we don’t like the business. It’s proving to be one of the very best mining businesses in the world. We like that, and we are seeing strong demand.”
On the upside, 2018 saw Colonial Coal file its first resource estimate for its Flatbed property, announcing inferred resources of just under 300 million Tonnes, as well as an update on its Huguenot property in July, where the company has 13 coal licenses and inferred resources of just under 400 million tonnes. Read more about their plans for the properties elsewhere in this issue.
