Ridley Terminals Inc., a federal Crown corporation that owns a coal export facility on the West Coast, is awaiting word on how it will be affected by the new Liberal government's pledge to fight climate change.
The previous Conservative government under Stephen Harper announced in December, 2012, that it planned to sell the terminal at the Port of Prince Rupert in northern British Columbia.
With coal prices in the doldrums, however, Ridley has gone from a coveted possession having several potential bidders nearly three years ago to being an economic casualty in the coal industry today – an underperforming terminal running at one-quarter of its capacity.
For the Liberals under Prime Minister Justin Trudeau, the issue is whether to try to unload Ridley soon or hang onto the asset until coal prices rebound.
"We're waiting to learn about that ourselves," said Colin Metcalfe, Ridley's vice-president of corporate affairs. "The fact that we've had a recent election and the government change, I'm sure we're going to be having discussions with the new groups that are in place."
Mr. Trudeau has vowed to make battling climate change a high priority. The federal Department of Environment has an expanded name and mandate, Environment and Climate Change Canada, with Catherine McKenna appointed as its minister.
The Tories put Ridley up for sale because they hoped to fetch up to $1.3-billion for the terminal, citing business reasons for wanting to exit the investment. A recovery in coal markets could take years, but Ottawa could still reap roughly $400-million if coal prices started to improve in 2016, experts say.
Environmentalists are especially concerned about carbon dioxide emissions from electricity plants fired by thermal coal, which has a larger impact on the environment than steel-making metallurgical (or coking) coal.
Coal Valley Resources Inc., owned by Colorado-based Westmoreland Coal Co., runs an Alberta thermal coal mine that will be the largest exporter through Ridley in 2015.
Vancouver-based Teck Resources Ltd. has been among leaders in exporting metallurgical coal through Ridley in recent years, including from the producer's Cardinal River mine in Alberta.
Ridley normally handles significantly more metallurgical than thermal coal, but metallurgical coal mining has ground to a halt in northeastern British Columbia.
Canada Development Investment Corp., a federal Crown corporation known as CDEV, is the entity in charge of looking for a buyer. CDEV has kept Ridley available to prospective buyers, as long as the winning bidder agrees to keep the terminal open to any coal producer needing to export instead of acquiring it for the use of a limited number of shippers.
CDEV vice-president Zoltan Ambrus said a year ago that there were regular inquiries about purchasing Ridley, and Ottawa's goal was still to sell the asset.
On Friday, he declined to provide an update on what progress has been made on Ridley's sale over the past year, if any. "Unfortunately we don't have any information to share on the subject at this time," Mr. Ambrus said in an e-mailed statement.
Joe Aldina, a coal analyst with Wood Mackenzie, said Ridley will be a hard sell should coal prices continue to languish. Benchmark spot prices for metallurgical coal have tumbled to $73 (U.S.) a tonne from $300 a tonne in 2011.
"It's hard for me to imagine who a buyer would be for Ridley," Mr. Aldina said in an interview from New York. "At one point, other coal terminal operators and coal companies would have looked at it, but given the state of the coal sales business, it's really tough to see someone step up to buy it."
As China faces slower rates of economic growth, the Asian country is striving to improve air quality and reduce the reliance on thermal coal, said Clark Williams-Derry, deputy director of Sightline Institute, a Seattle-based environmental think tank.
"The fact that the Canadian government is in the thermal coal export business clearly comes into conflict with the government's aspirations toward international climate leadership," Mr. Williams-Derry said.
Ridley exported a record 12.1 million tonnes of coal and petroleum coke in 2013, when the global coal market weakened but remained relatively healthy.
Ridley's exports of coal and petroleum coke tumbled to 7.1 million tonnes in 2014. In the first 10 months of this year, exports have totalled 3.9 million tonnes, compared with 6.5 million tonnes in the same period of 2014.