Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
On May 9, 1992, at around 5:20 a.m, a sudden gush of methane gas and coal that had been accumulating inside the Westray mine, in Plymouth, a small town of Nova Scotia, caused a major explosion that killed 26 men and changed the lives of those who, until then, had benefitted from a mining boom in the region.
Twenty-five years later, those miners — most of whom died in the final hours of a four-day shift — are still remembered, as they went down in history as the victims of one Canada’s deadliest mining disasters.
A Nova Scotia Supreme Court justice concluded the disaster was the result of “incompetence, mismanagement, bureaucratic bungling, deceit, ruthlessness… and cynical indifference.”
About 200 people gathered in New Glasgow on Tuesday to mark the anniversary of such tragic event, which could have been easily avoided.
“The Westray story is a complex mosaic of actions, omissions, mistakes, incompetence, apathy, cynicism, stupidity and neglect,” said Mr. Justice Peter Richard in his report on the explosion and fire at the coal mine the very same day it happened.
Even before it opened, Westray was deemed a dangerous operation. About a year prior to the explosion, Liberal MLA Bernie Boudreau sent a letter to Nova Scotia Labour Minister Leroy Legere warning that the new Westray coal mine scheduled to open in two months near Stellarton was “potentially one of the most dangerous in the world.”
After a five-year inquiry that cost almost $5 million, a Nova Scotia Supreme Court justice concluded the disaster was the result of “incompetence, mismanagement, bureaucratic bungling, deceit, ruthlessness… and cynical indifference.”
Curragh Resources, the company that owned Westray mine, went bankrupt in 1993, partially due to the disaster, leaving more than 100 unemployed and marking the beginning of the end to coal mining in Nova Scotia.
New beginnings
But underground coal mining resumed in the province in March this year, with Kameron Coal, a subsidiary of US mining giant Cline Group, cutting the ribbon at its Donkin project.
The mine, in the works for years, has two shafts about eight metres wide that extend almost four kilometres under the Atlantic Ocean, starting from a location about 30 kilometres east of Sydney.
Unlike in Westray’s, safety in the new Donkin mine is a priority, with the company also committed to meet emissions requirements, comply with federal-provincial agreements on carbon reduction and deliver a reasonably priced product, Kameron said when opening the mine.
The Cline Group, headed by self-made billionaire and coal mining magnate Chris Cline, is one of the top 20 coal producers in the US, with a capacity of about 10 million tons per year. The company has a 36-year track record of building coal mines in Illinois and selling coal to power plants across the US, as well as in 23 countries around the world, and its safety record is said to better than the Canadian average.
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James Fraser
Morien Resources (MOX.V) owns a royalty on production at this coal mine (Donkin).
http://www.pennyminingstocks.com/morien-resources-mox-v-2-million-reasons-buying-stock/