Donkin mine part­ners not plan­ning to send coal by rail

Cape Breton Post - - FRONT PAGE - BY ERIN POTTIE epot­tie@cb­post.com

SYD­NEY — De­spite the hopes of lo­cal port de­vel­op­ers, Donkin mine part­ners say they have no plans to send coal by rail to Syd­ney har­bour.

Project man­ager Val Is­tomin of Xs­trata min­ing cor­po­ra­tion said the de­ci­sion is cost-based and co­in­cides with the scaled-back plan for the un­der­ground mine. Donkin of­fi­cials have al­ready spent $20 mil­lion of their own money on the coal project, with an­other $350 mil­lion to be spent over the next few years.

Xs­trata and Er­dene Re­source De­vel­op­ment of Dart­mouth, N.S., which holds a 25 stake in the project, say the in­abil­ity to find a buyer for raw ther­mal coal that was to be ex­tracted dur­ing a test phase of the project led them to shift their fo­cus al­to­gether.

In­stead of min­ing ther­mal coal, work­ers will mine for met­al­lur­gi­cal coal at a pro­duc­tion rate of 2.75 mil­lion tonnes per year.

“If we had been able to de­velop Donkin as a long-wall mine as ini­tially planned, we would have trans­ported about four mil­lion tonnes each year to our cus­tomers and this vol­ume jus­ti­fied the cost of a rail­way sys­tem,” Is­tomin stated in an email. “The cap­i­tal and op­er­at­ing cost of a rail­way sys­tem to trans­port this lower vol­ume would make the project un­eco­nomic.”

Is­tomin added that project part­ners also don’t want to see trucks run­ning through Cape Bre­ton com­mu­ni­ties for the ex­pected 25-year life­span of the mine, leav­ing them with the op­tion of barg­ing off the Donkin penin­sula.

Xs­trata has said the barge will be able to carry be­tween 12,000 and 15,000 tonnes of coal to deep wa­ter where it will be loaded onto large ves­sels by crane.

Xs­trata has en­vi­ron­men­tal ap­provals to mine coal, but is now seek­ing pro­vin­cial and fed­eral ap­proval for new in­fra­struc­ture. The area where part­ners plan to barge the coal is within the vicin­ity of a com­mer­cial fish­ery, which has raised some con­cern among lo­cal fish­er­men.

Syd­ney Marine Group chair Jim Wooder said he re­mains op­ti­mistic the Port of Syd­ney will be an as­set to the two pri­vate com­pa­nies.

“To have that har­bour avail­able there with an abil­ity to po­ten­tially use cape­size ships (the largest dry­bulk car­ri­ers in the world), we be­lieve is im­por­tant,” said Wooder. “ We fully ex­pect that Syd­ney har­bour will end up play­ing a role and will be the most ef­fi­cient and ef­fec­tive way to de­liver prod­uct to mar­ket.”

The marine group is also con­tin­u­ing to push for the $35-mil­lion pro­posed dredg­ing of Syd­ney har- bour and the construction of a $200-mil­lion con­tainer ter­mi­nal. Wooder said dredge bids are cur­rently be­ing eval­u­ated and an an­nounce­ment will be made in a cou­ple of weeks.

While in Syd­ney ear­lier this month, De­fence Min­is­ter Peter MacKay said a re­vi­tal­ized port could con­vince Xs­trata to ship its coal out of Syd­ney.

“If the port it­self be­came more vi­able with a dredge I sus­pect that Xs­trata would re-ex­am­ine their ini­tial de­ci­sion as to where they would ex­port the coal from,” said MacKay.

Ac­cord­ing to the Port of Syd­ney busi­ness model, once the har­bour is dredged, the largest of con­tainer ves­sels will tran­sit to Syd­ney via the Suez Canal with cargo then loaded for in­land des­ti­na­tions ei­ther by rail or reloaded onto small ves­sels.

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