Donkin coal project could go ahead or be can­celled

Cape Breton Post - - FRONT PAGE - BY TOM AY­ERS

SYD­NEY — Spec­u­la­tion is ram­pant on the fu­ture of the Donkin coal mine and, de­pend­ing on who is talk­ing, the project will ei­ther go ahead or be can­celled.

Xs­trata Donkin Coal Man­age­ment of­fi­cials have sched­uled a com­mu­nity meet­ing at the Donkin fire hall for Wed­nes­day at 7:30 p.m. to up­date the com­mu­nity.

“ There’s a lot of spec­u­la­tion float­ing around,” said Hugh Kennedy, chair­man of the Donkin-Port Cale­do­nia Ru­ral De­vel­op­ment As­so­ci­a­tion and chair of the Donkin Xs­trata com­mu­nity li­ai­son com­mit­tee.

“I’ve heard it both sides, that they’re go­ing ahead and they’re go­ing to can­cel it. I can tell you Xs­trata has not told me any­thing.”

Kennedy said the de­vel­op­ment of the Donkin mine could spark hun­dreds of jobs for the re­gion and eco­nomic spinoffs into the lo­cal com­mu­nity.

“I’m hope­ful, yes, but I’m in the dark as much as any­one else.”

Ken MacDon­ald, vice-pres­i­dent of busi­ness strat­egy and chief fi­nan­cial of­fi­cer for Er­dene Re­source De­vel­op­ment of Dart­mouth, said he and com­pany pres­i­dent Peter Ak­er­ley will be at the meet­ing Wed­nes­day, but he said any an­nounce­ment on the project would have to come from Xs­trata.

Er­dene holds a 25 per cent stake in the Donkin mine de­vel­op­ment.

MacDon­ald said the out­look is good for ther­mal coal prices. Two years ago, coal peaked at an av­er­age of $129 a tonne, but fell back last year to an av­er­age of $72 a tonne.

The Donkin busi­ness case is pred­i­cated on a price of $52 a tonne.

“As much as there’s a lot of con­tro­versy over the burn­ing of coal ... it makes up the most abun­dant re­source of fos­sil fu­els in the world,” said MacDon­ald, adding it’s also the least ex­pen­sive to pro­duce so “there’s go­ing to be a need for coal for a long time.”

Xs­trata and Er­dene plan to ex­tract 350,000 tonnes of coal a year from the Donkin mine in a $110-mil­lion ex­ploratory phase to de­ter­mine the qual­ity and quan­tity of the re­source be­fore com­mit­ting to a full-scale mine de­vel­op­ment.

At a com­mu­nity meet­ing in De­cem­ber, Xs­trata project man­ager Val Is­tomin said the com­pany would not ap­prove an ex­ploratory stage un­til a buyer for the coal is found, which he pre­dicted at the time wouldn’t be likely within the next three months.

Is­tomin said in an email mes­sage Mon­day Xs­trata has been fully in­ves­ti­gat­ing its de­vel­op­ment op­tions and is ready to make an an­nounce­ment.

“ We un­der­stand how un­cer­tainty can be very un­set­tling for folks and we have been very busy re­view­ing all of our op­tions so as not to drag the process out,” Is­tomin said. “We now will be able to ad­vise the com­mu­nity and other stake­hold­ers of the project’s sta­tus on Wed­nes­day.”

Nova Sco­tia Power is still in dis­cus­sions with Er­dene and Xs­trata, “but no com­mit­ments have been made at this time,” spokesper­son Jen­nifer Parker said Mon­day.

The power com­pany spent mil­lions of dol­lars last year adding emis­sions con­trols to its coal-fired plants in Lin­gan and Point Tup­per to meet new mer­cury emis­sions caps, but Parker said that was to ac­com­mo­date ex­ist­ing fuel sup­plies. Donkin coal, she said, con­tains too much mer­cury and sul­phur to be us­able un­der ex­ist­ing en­vi­ron­men­tal reg­u­la­tions.

“The idea of run­ning a fuel from Nova Sco­tia in our plants is at­trac­tive ... (but) the pro­file of the coal from Donkin, quite frankly within the caps we have to op­er­ate un­der, mean it’s not pos­si­ble,” said Parker.

Steve Wad­den - Cape Bre­ton Post

Staff worked at Xs­trata’s Donkin coal mine site Mon­day, as spec­u­la­tion in the com­mu­nity grew on the fu­ture of the project. Xs­trata will an­nounce Wed­nes­day whether the project will get a green light or be stopped for good.

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