Sunday, January 6, 2013

Coal Mining back in the Crowsnest Pass

I am sure by now most people have read the "Earth Shattering News" on my fellow blogger's site and the follow up story announcing the Consol energy conditional sale to Riversdale Resources of the Grassy Mountain property for $24 million.

Good news for the Pass? absolutely. Had a big chat about this last night with a number of friends and starting asking questions which led to lots of debate and more questions.

For those that do not know Grassy Mountain, it is just a few kilometers North of the golf course in Blairmore, from what I am told it was an active mine until the late 1950's (If I am making a mistake let me know). The coal rights to this area have been owned for years by Consol Energy out of Pittsburgh.

Who is Consol energy? Big American company based in Pittsburgh which own twelve mines in the Eastern US and is also a big gas producer, apparently they have been having some financial difficulties and have taken a path of selling of non-producing assets. Therefore the sale of their Western Canada assets in late December to Riversdale Resources.

Who is Riversdale Resources? Australian company set up in 2011 by two former executives from Riversdale Mining (Michael O'Keeffe and Steve Mallyon) who had sold a large mine in Africa to Rio Tinto. There goal with Riversdale Resources is to develop new projects in North America. 

Does Riversdale Resources operate any mines presently? No, but in early 2012 they did acquire the exploration rights to an area in Alaska  for $3 million for the nearly 10,000-acre Chickaloon coal deposit in the Mat-Su Valley.

Doing a little research on this property in Alaska came across the following site  notice the name? That leads to one of the other questions thrown around about our area, will the environmentalists react to a proposed mine at Grassy Mountain? I expect there will be a lot of reaction from both environmentalists and recreation users.

How long does it take to get a mine to production? that will depend on the various government regulators,  how aggressive the buyers are,  market demand and how much opposition comes forth.

Looking at other new mines I can think of two examples, over in the Elk Valley we have the Bingay Creek Coal Mine 21km north of Elkford testing in 2006 determined that it had sufficient enough resources to get serious. In 2009 this property was sold to Centermount Coal Ltd which now anticipates starting construction  in 2014 and production in 2016 of one million tonnes a year and going up to two million tonnes a year eventually.
Up at Hinton Coalspur as been actively working in the area since 2009 they are now in the midst of the approval process for what will eventually be one of North America's largest mines they hope to start construction this year and be in production in 2015 starting at one and a half million tonnes a year going up to eventually twelve million tonnes a year.

Timelines from these two projects above, one right next door to us and one in Hinton 5-10 years seems realistic to get to first production.

30 million tonnes does not seem like a lot of coal to be developing a mine? Your right the Bingay creek mine which is planned to max out it's volume at 2 million tonnes a year has reserves of 170 million the Coalspur operation has reserves of 1.7 billion tonnes. That either means that Riversdale is anticipating finding more coal when they do further exploration, or it's going to be a very small low producing mine.

Good thing for the Pass? that remains to be seen we will all get to judge that as the company does it's exploration and reveals it's future plans to the community.  Done right absolutely we need the jobs, the tax base etc.

Will and should the local politicians get all the credit for this? The local politicians role in this issue to this point will be at most a few shaken hands and we would love to see you in our community statements. The local role will increase when and if this project unfolds.
Up to now this is all about a market place (met coal) that is anticipated to be strong for the foreseeable future, a new Australian company that is attempting to acquire coal assets in North America. Because of that strong coal market and an industry that measures profits by the billions these kinds of acquisitions are very common right now.


Anonymous said...

Good post.

Anonymous said...

Tree huggers are going to go wild on this.

Anonymous said...

How would they get the coal to the railroad?
Here is a map of the Frank and Grassy Mountain Railway:

And a photo:
1920x1080 ("full HD") 700K

Anonymous said...

How did they move it when it was operational? Does anyone know.

Anonymous said...

I think that the Grassy coal was moved by truck down the road from the strip mine to the Greenhill Tipple. The ruins of the old tipple are there as may be the old garages up the hill where the Drain Boys had their shops. Wonder who has the environmental responsibility for that land, which was part of the River Run area?

The Lille railway was history long before the Grassy Strip was operating. Buildings in the town of Lille were moved to the other towns, and make up part of the present communities.

Very unlikely that a rail spur would be approved along Gold Creek, and that people would like to see that old rusty water stain the rocks in the Crowsnest River. The Riversdale boys must be dreaming or need a few land packages in their portfolio.

Peter Rosner said...

A lot of unanswered questions and hurdles to overcome before this becomes something i can take seriously. Just where would they put a loadout facility for the trains for example. Thirty million tonnes is not a lot of inventory when you consider the investment required to put this mine into operation.

Anonymous said...

Question: If completed, will the Crowsnest Pass get the property tax revenue or will the bulk of the operations be outside of the Pass?

Anonymous said...

Most of that Grassy Mountain area is in the MD of Ranchlands

Anonymous said...

There is no question this would be a very good thing for the Crowsnest Pass. I just hope people are not expecting it to happen tomorrow.

Anonymous said...

Lots of questions to be answered first very sensitive area. That our grandchildren have a right to enjoy in future year unblemished.

Anonymous said...

Yes, I am sure it is very busy with people hiking through the area.

Anonymous said...

I moved to the Pass for the beauty of the area. Do you think I invested in this area to see a coal mine only 5km up the road?

Anonymous said...

1:04 look on the bright side when you sell your home you will make a tidy profit.
I think a coal mine would be great for this community. Think of all the direct and indirect jobs that will be created.


Anonymous said...

to anon 1.04 there are no coal mines in calgary and i cant see a lot of people worrying about your investment