Doorway to opportunity: B.C. coal town hopes for revival

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Inside the Dinosaur Discovery Gallery in Tumbler Ridge, B.C., a set of two large doors symbolize past pain and future optimism for the coal industry in northeastern British Columbia and the region's ties to Asia.

After years in storage, the doors finally went on display this past summer, with the entrance handles together forming the Quintette coal project's logo. The Quintette mine opened in 1982 and supplied Japanese steel mills, but it closed in 2000 amid low coal prices.

The local economy seemed so depressed that the mine's owner, Vancouver-based Teck Resources Ltd., donated the doors for museum purposes because the company's executives thought the closing would be permanent and no longer needed for the glass office building on Quintette's sprawling site near Tumbler Ridge.

"These doors originally were worth roughly $100,000 and they are quite heavy," said Richard McCrea, curator at the Peace Region Paleontology Research Centre, which houses the gallery. He marvels at the thick aluminum doors, featuring a pewter exterior with artwork that depicts trucks at an open-pit mine in British Columbia and blast furnaces used for steel making in Asia.

Local leaders admit the historic exhibit is a painful reminder of dashed dreams in the past, but they quickly add that they see hope for the future and a fresh opportunity to restart Quintette and increase coal exports to Asia from nearby mines.

While the coal market has been in a slump for the past couple of years, prices are still much healthier than a decade ago. Vancouver-based Teck believes the economics might make sense to breathe new life into the old Quintette project and create 2,000 construction jobs and 500 full-time mining jobs.

But first, the company is waiting for prices to strengthen for metallurgical (or coking) coal – used in the production of steel. There is excitement in Tumbler Ridge over the prospect that Teck could revive Quintette through an $860-million mining project, located about 700 kilometres northeast of Vancouver.

"We are continuing to proceed with detailed engineering work at the Quintette project so that if market conditions are favourable, we will be in a position in early 2014 to decide to proceed with the reopening, which could result in commercial production in mid-2015," Teck spokesman Chris Stannell said. A subsidiary of China Investment Corp. has held a 17-per-cent stake in Teck since 2009.

Coal projects seemed to be an endangered species in northeastern British Columbia after Quintette closed in 2000 and the nearby Bullmoose mine shut down in 2003. The coal industry is intertwined with Tumbler Ridge, an instant community of modern homes carved out of the forest in the early 1980s.

"Coal mines are one of my favourite places to be. I wouldn't get to see the dinosaur tracks if it weren't for the mines," Mr. McCrea said.

Tumbler Ridge, after almost becoming a ghost town a decade ago, has proven to be resilient. The community's roots trace back three decades to development spurred by $1.5-billion in rail and other infrastructure subsidies from the B.C. and federal governments. It is a case study in the benefits and risks for the private and public sectors when making massive investments to pursue regional development. It hasn't been easy creating an industry and community out of the remote, forested foothill wilderness.

While the governments' investment seemed wasted after Bullmoose closed in 2003, new projects such as Anglo American PLC's nearby Trend project emerged in subsequent years as coal prices slowly recovered. In 2011, coal prices soared to $300 (U.S.) a tonne. For Tumbler Ridge, the rally added insult to injury from Teck's bleak decision to close Quintette.

Benchmark prices for metallurgical coal have since tumbled to about $150 a tonne. Even with recent depressed prices, however, the market is still much stronger than in 2000, when prices dipped to $40 a tonne.

Far from panicking about coal markets, Tumbler Ridge Mayor Darwin Wren believes that the community will survive, mature and come of age, though it won't likely become a boom town again like it was in the 1980s. "Three-quarters of the housing in town is from the 1980s," he said. "We know we're here to stay."

He expects the municipality of more than 3,300 residents to thrive in the long term. "For a single-family dwelling, houses start at $200,000 [Canadian] and go up beyond $400,000. Prices have definitely gone up in the past dozen years," Mr. Wren said in an interview in his office.

He moved from Fort Nelson, B.C., to Tumbler Ridge in 2001, when he bought his home for $28,000 – one of hundreds of spacious homes on large lots that sold for less than $35,000 in 2000 and 2001. Mr. Wren, who has been mayor since 2008, keeps a hard hat and steel-toed boots close by, in case he ever has to drop by a mine or local construction site.

The vision three decades ago by the public and private sector was to mine coal in northeastern British Columbia while sparking the economy in the northwest part of the province, where the Port of Prince Rupert would serve as a crucial gateway to Asia. Only in recent years has the port started to fulfill some of its promise, notably with coal and grain exports, but also imports of consumer goods in containers from Asia finding their way onto Canadian National Railway Co.'s tracks to the U.S. Midwest.

One of the sources of coal shipped from the port to steel mills in Japan, South Korea and China, is the Anglo American Trend mine, where large trucks are loaded up with metallurgical coal.

On a recent chilly day, an employee driving around the sprawling property points out that just one tire on a massive truck costs more than $10,000, underscoring the enormous capital costs required for mining.

"For every eight trucks of rocks, there is one truck hauling coal," said Jackie Caldwell, an environmental technician at Anglo American. Her pickup is dwarfed by the huge vehicles that go back and forth on the Trend mine's long and winding roads.

Anglo American has started a $200-million expansion project that will effectively broaden its mining territory by nearly 500 hectares and provide job security for the current work force of 420 employees.

London-based Anglo American's current output is 1.5 million tonnes of coal a year at its existing Trend operation, but after finishing the Roman mine expansion this spring, it forecasts that production will climb to a rate of 2.5 million tonnes a year.

Near Anglo American's property, HD Mining International Ltd. is considering plans for a $300-million coal venture.

Another company, Walter Energy Inc., has suspended its Willow Creek mine, but remains a major coal producer in the area through two other mines, Brule and Wolverine.