King Coal’s re-coronation postponed

Hard to spin Donkin mine flooding as anything but negative news

Cape Breton's unemployment rate chronically hovers around 15 per cent. And there's a reserve of latent mining knowledge and skill on this island founded on a commercial underground coal mining tradition that goes back to 1720.

So, the possibility that Cape Bretoners could again be mining coal — at a $500-million modern mine in Donkin — has generated much hope.

And we're not talking about a couple of jobs. Projections always have to be taken with a grain of salt, but Donkin mine proponents have estimated that an operation in full swing would provide 300 full-time positions over 30 years, with annual production pegged at 3.6 million tonnes.

And leading up to the Nova Scotia election on Oct. 8, the Progressive Conservatives were suggesting that the mine could generate $3 million a year in provincial royalties. Indeed, if elected and if the mine started up, Tory Leader Jamie Baillie was ready to "reinvest that money in the local economy to create more jobs and opportunities, to get the ball rolling on jobs in industrial Cape Breton."

But the Tories weren't elected and nothing positive has since happened on the Donkin mine front.

In fact, mine proponents took a hit on Nov. 20 when Glencore Xstrata — a global mining giant with a 75 per cent stake in the Donkin project — announced that it's going to seal the mine, shut off the power and stop pumping water from the mine in an effort to save money. Apparently, that will reduce annual maintenance costs from around $3 million to $500,000.

Morien Resources Corp. of Dartmouth — which owns the remaining 25 per cent interest in the Donkin project — is negotiating to acquire Glencore's 75 per cent share.

Morien Resources Corp. has remained publicly positive about those efforts, and also recently stated that it has a potential customer for the coal.

Despite those positive rumblings, the mine will be sealed and allowed to flood.

Glencore, too, is publicly positive, stating that if a buyer is secured, the new owner can simply pump out the water as they're building the necessary surface infrastructure — buildings and so on — for the project to go ahead.

If that's the case, it begs the question: Why did Glencore, and Xstrata Coal previously, spend all that money maintaining the mine and pumping the water out for so long?

The players are remaining publicly confident. But news that the mine will be sealed and the pumps turned off is not welcome.

But, on a truly positive note, the coal's been there for millions of years and it's not going anywhere.