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.
Kameron Coal’s Donkin mine, the first underground coal operation in Canada’s Cape Breton in 15 years, has received four orders and six warnings from provincial authorities since limited production restarted on January 25, after part of the roof collapsed.
Orders from the Nova Scotia government include everything from Kameron Coal being required to have “pullcord and guarding on conveyor system,” to warnings to install “proper functioning for ventilation,” the Cape Breton Post reports.
Proper ventilation is a key issue for an underground operation, Harold Carroll, head of the NS Department of Labour and Advanced Education, said. He noted that receiving a warning doesn’t necessarily mean inspectors found a serious violation of regulations.
“The number of orders and warnings is not a concern,” Harold Carroll, the department’s executive director of occupational health and safety told CBC News. “It doesn’t raise any significant red flags for us.”
Donkin coal mine, which began operations in late 2017, has been the subject of frequent inspections since an accident forced its closure in December
“We do not anticipate these particular orders/warnings will have an impact on Donkin Mine returning to their regular mining operation,” noted Shannon Kerr, spokesperson for the NS Labour Department.
The Donkin coal mine, which began operations in late 2017, has been the subject of frequent inspections since an accident forced its closure in December. It was allowed to reopen a month later, but only for limited production.
Since then, Kameron Coal has submitted a new ground-control plan to the department and is in talks with the province to get approval to restart full production.
The company, a subsidiary of U.S.-based Cline Group, gained full control of Donkin by 2015, after purchasing a 75% majority stake in the operation from Glencore and 25% from Halifax-based Morien Resources (TSX-V: MOX), which has a royalty on coal production from the mine.
With a resource of 481 million tonnes — 227 million tonnes in the indicated category and another 254 million tonnes in the inferred — the deposit has enough low ash, high-energy coking and thermal coal to last for 25 years or more.
Donkin is expected to produce 2.75 million tonnes of coal a year over the next three to four years.
Coal mining in Cape Breton dates back to the early 1700s, when the French needed the fuel for their nearby fortress. The industry has long been considered a way of life on the East Coast island.
