Opening up the north to anthracite

Construction on the first anthracite producing mining operation in Canada is targeted to start in early 2015 in northwestern B.C.

The Arctos anthracite project (formerly Mount Klappan anthracite metallurgical coal project) is a joint venture between Fortune Minerals Limited (TSX:FT) and its 20% partner, POSCO Canada Limited (POSCAN), a subsidiary of Korea’s POSCO, one of the world’s largest producers of steel.

With more than $100 million already invested, the project, now in the environmental assessment process, will open up jobs opportunities for hundreds.

“We’re going to need upwards of 300 people in the construction phase,” said Mike Romaniuk, vice-president of operations at Fortune Minerals.

“Then, during operations, we’ll be looking to hire about 500 people. So, that will mean 500 direct well-paying, long-term jobs, but there will be up to as many as three-and-a-half times that in indirect jobs created as well.”

For example, local businesses and entrepreneurs will be needed to supply the construction, operation and maintenance of the project, as well as for transportation, hospitality and government-related services.

In addition, government services related to permitting, monitoring and taxation will be needed, creating potential for more employment in those areas.

Anthracite is the most versatile and most high-quality metallurgical coal, used in the production of steel and the processing of metal.

Demand for anthracite is high as it represents just 1% of the world’s coal reserves, and the world’s top producer of anthracite, China, became a net importer in 2004. Additionally, there are few new high-quality deposits in mining-friendly jurisdictions, creating a supply imbalance supporting future high prices.

In the Arctos project, there are four deposit areas within an area totaling 16,411 hectares, containing 231 million tonnes of measured and indicated resources and 359 million tonnes of inferred resources. This translates to a mining project that could be around for a quarter of a century.

“With a long-term operation, like what we have planned for the Arctos anthracite project, which is going to be around for more than 25 years, we’ll be relying on local businesses and entrepreneurs to contribute to our success and help us out,” Romaniuk added.

“That might mean a transport business helping to move parts and materials for us, or a long-term contract to provide structural, mechanical, electrical maintenance. Also, we’re going to have contractors and visitors to the site on a regular basis and they’ll all need places to eat and sleep.”

The project will be using Ridley Terminals in Prince Rupert, 330 kilometres away, which is currently undergoing expansions to more than double its annual shipping capacity to 25 million tonnes by the end of 2014.

“Adding capacity to the West Coast is a priority for Ridley Terminals,” said Derek Baker, economic development officer for Prince Rupert and Port Edward. “The addition of new capacity at Ridley Terminals is a contributing factor to a lot of the new mining operations being able to proceed.”

He noted that the expansion is not just good for the mining industry, allowing it to get product to its market reliably, quickly and efficiently, but that it adds long-term reliability to the terminals and creates employment all along the supply chain.

Fortune Minerals has infrastructure plans of its own.

“We’re looking to get ourselves connected to the B.C. electrical grid,” said Romaniuk. “In addition, we’re partnering with CN rail to expand and upgrade the existing rail line to connect the project site to Ridley Terminals in Prince Rupert.”

The move away from diesel trucks for transport and diesel generators isn’t just more efficient and environmentally friendly; it will also bring benefits to the region. The new infrastructure will help local communities that are currently off the grid to get access to a cleaner and more reliable power source. But more importantly, it will also create new opportunities for economic growth.

“Mining projects in northwest British Columbia are economic drivers,” said Evan van Dyk, economic development officer for Terrace. “[They] provide high-paying, long-term, stable jobs, and we see local contractors and businesses working with the local companies on site and supplying them.”

In 2011, there were 89 exploration projects and $220 million spent on exploring the northwestern region of B.C.

By Linda M. Tobias

Photo courtesy Fortune Minerals