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The federal government has reached a deal to sell a coal export terminal in northern British Columbia nearly seven years after first looking for buyers.

Ridley Terminals Inc., a Crown corporation that owns the facility in the Port of Prince Rupert, will have 90 per cent of its shares sold for $350-million to a company owned by two U.S. private equity firms. Two Indigenous groups will be the other co-owners of Ridley.

New York-based Riverstone Holdings LLC and AMCI Group of Connecticut emerged as the majority purchasers of the terminal located on Ridley Island.

The Canada Development Investment Corp., a federal Crown corporation known as CDEV, is the entity in charge of the sales process.

“The remaining 10 per cent of Canada’s shares will be transferred to a limited partnership owned by the Lax Kw’alaams Band and the Metlakatla First Nation at the close of the sale to the Riverstone-AMCI company,” CDEV said in a statement on Friday.

The federal government negotiated directly with the Lax Kw’alaams and Metlakatla to reach undisclosed terms that will pave the way for them to hold their minority stake.

As part of the sales process, Ottawa consulted with Indigenous groups that belong to the Tsimshian First Nations: Lax Kw’alaams, Metlakatla, Gitxaala, Kitsumkalum, Kitselas and Gitga’at.

The previous Conservative government announced in December of 2012 that it planned to sell the West Coast coal facility.

But coal prices went into the doldrums in 2014, with Ridley Terminals becoming an underperforming asset instead of a coveted possession.

The Liberal government decided to revive the sales process in August of 2018, after coal prices recovered and stabilized.

The sales price to the Riverstone-ACMI group places an overall value on Ridley Terminals of $389-million – a far cry from the $1-billion that industry experts thought it might be worth when coal markets were hot in 2012.

CDEV said the federal government will book a $100-million gain on the transaction. Ottawa built the terminal in the early 1980s for about $250-million as an export site for new coal production from northeast British Columbia. The first shipment in 1984 went to Japan.

Over the years, Ridley has handled more steelmaking metallurgical coal than thermal coal, which is used by power plants in Asia to produce electricity. In the first five months of this year, Ridley exported 2.36 million tonnes of metallurgical coal and about 936,000 tonnes of thermal coal.

Including other commodities such as petroleum coke, Ridley had almost four-million tonnes of exports in the first five months of 2019, up 16 per cent compared with the same period in 2018.

The deal announced on Friday is subject to review by Canada’s Competition Bureau.

RBC Dominion Securities Inc. analyst Walter Spracklin said the new owners will be acquiring a site that needs capital investment in the years ahead, including building a second berth. “There is a fairly meaningful capital upgrade requirement that comes with this purchase,” he said in a research note.

Environmentalists have criticized Ottawa for owning a coal terminal, expressing concerns about carbon dioxide emissions from electricity plants fired by thermal coal, which has a larger impact on the environment than steelmaking metallurgical coal.

The Prince Rupert Port Authority, a federal agency, leases land to the terminal located on Ridley Island.

Calgary-based AltaGas Ltd., which has subleased land from Ridley Terminals, began exporting propane from the island this spring.

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