A province-by-province, territory-by-territory look at Canada clearly shows that it’s a massive nation containing a vast and envious amount of natural resources.
In fact, it’s the second largest land mass on the planet at 9,984,670 km2, following only Russia at 17,098,242 km2, and like Russia, it’s also the home to some of the more varied and abundant supply of minerals found anywhere.
From Yukon to Newfoundland and Labrador, and from the 49th Parallel to the Arctic Circle, Canada is a country rich in commodities; base and precious metals being the most sought after, followed by strong showings of iron ore, uranium, potash, oil and naturally, coal.
With the exception of the central regions of Manitoba, Ontario and Quebec, coal is a mineral being explored and mined throughout most of the country.
In fact, it’s the world’s most abundant and widely distributed fossil fuel and according to the International Energy Agency, the world’s total proven coal reserves are 1,000 billion tonnes spread over more than 70 countries and thankfully, Canada is where much of it can be found.
Canada holds 8.7 billion tonnes of proven coal reserves, including 6.6 billion tonnes of proven recoverable coal reserves that will provide more than 100 years of production at current production rates. In addition, about 193 billion tonnes of coal resources have also been identified.
Even in the far reaches of Ellesmere Island in Nunavut where iron ore has dominated exploration, coal is now a player thanks to the perseverance of companies like Petro-Canada, Gulf Canada and currently Canada Coal Inc; all determined to help develop coal mining in the extreme north.
But a closer look at where most of the country’s coal is coming from shows (according to the most recent (2012) figures from Natural Resources Canada (NRCan), Minerals and Metals Sector*), there were 24 permitted coal mines in Canada; 19 of which are currently in operation. Ten are located in British Columbia, nine in Alberta, three in Saskatchewan and two in Nova Scotia.
Kevin Stone, Senior Advisor at NRCan, says that Canada produced almost 67 million tonnes (Mt) of coal in 2012, of which 47 per cent was coking coal. The production of coking coal increased by 5.5 per cent from 29.5 Mt in 2011 to 31.1 Mt in 2012.
This increase was driven by the steel industry, but not necessarily Canada’s because we shipped almost all of our coal to offshore customers while keeping only a small amount for domestic purposes.
Most of the output in the coking coal category was hard coking coal and only a small portion was pulverized coal injection (PCI) coal.
Approximately 4.3 Mt of bituminous thermal coal were produced in 2012, most of which was exported, and about 21.6 Mt of subbituminous coal and 9.5 Mt of lignite coal were produced in 2012, both of which were used for domestic coal-fired power generation.
Stone added that statistics showed that British Columbia produced 28.8 Mt of coal, Alberta produced 28.3 Mt, while Saskatchewan subsequently produced 9.5 Mt. in relation to the number of coal mines in each province.
With further reference to the number and location of operating coal mines in Canada, Stone says there was “a boom in coal projects development in 2012” with five new projects applying for environmental assessment: Carbon Creek, Murray River, Echo Hill, Bingay, and Sukunka. All five projects are located in B.C., with four of them planning to produce coking coal and other bituminous thermal coal for export.
Coal mining projects in other parts of the country also made headlines recently, starting with Nova Scotia’s Donkin coal project and the Canadian Environmental Assessment Agency’s (CEAA) release in April 2013 of its comprehensive environmental assessment study for public consultation for the proposed Donkin coal project.
The CEAA found that the project is not likely to cause significant adverse environmental effects. The project proponent proposes to construct and operate an underground coal mine at the site of the existing Donkin mine located on the Donkin Peninsula in Cape Breton.
It would produce 3.6 Mt/y of run-of-mine coal and 2.75 Mt/y of coking coal for export. Production is projected to begin by the end of 2017. The mine life is expected to range between 20 and 30 years. Xstrata owns 75% of the Donkin coal project and Erdene Resource Development Corp. owns the remaining 25 per cent.
Also making the news was Fortune Minerals Ltd. (Fortune) who resubmitted its application for an environmental assessment for its Arctors anthracite project in April 2013. Fortune changed the name of its Mount Klappan project to Arctors in August 2012. The proposed project is located 160km northeast of Stewart in northern B.C. The company plans to produce anthracite coal for export at a production rate of 3 Mt/y.
And in June 2012, the B.C. Environ-mental Assessment Office and the CEAA issued the Application Information Requirements/Environmental Impact Statement Guidelines for the Raven underground coal project proposed by Compliance Energy Corp. (CEC). As of March 31, 2013, the project was still at the pre-application stage. It is a joint venture between CEC (60%), Itochu Corp. of Japan (20%), and LG International Corp. of Korea (20%).
The proposed project, located in the Comox Basin on Vancouver Island, B.C., would produce coking coal for export at a rate of 1.5 Mt/y with a mine life of 20 years.
In Alberta, Coalspur Mines Ltd.’s Vista project, located approximately 4km east of the Town of Hinton and 60km southwest of the town of Edson, is a proposed two-phase development: Phase 1 entails commencing production at a level of 6 Mt/y of bituminous-grade thermal coal and Phase 2 would increase output to 12 Mt/y by 2019.
In 2012, Coalspur completed a feasibility study of the Vista project that identified a marketable reserve of over 313 Mt from a recoverable reserve of 566 Mt. The company further defined, in a follow-up study, two stages of development for Phase 1: Stage 1 would have a production capacity of 3 Mt/y with production beginning in mid-2015 and Stage 2 would add an additional capacity of 3 Mt/y by 2017. The mine life is projected to be approximately 30 years.
With coal producers across much of Canada, the country was able to export 34.8 Mt of coal in 2012, up 3.2 per cent compared to 33.7 Mt in 2011, and making it the world’s third largest coking coal exporter.
Canadian coking coal exports increased by 11 per cent to 30.7 Mt in 2012 from 27.7 Mt in 2011 due to increased global demand.
Canada imported 9.8 Mt of coal in 2012. Coking coal accounted for 45 per cent of its total coal imports and the rest was thermal coal destined for coal-fired power generation and industrial uses.
While prices are always a subject of sensitivity for the mining industry, NRCan found that in 2012, the benchmark price for hard coking coal averaged US$210 per tonne. It started the year at US$235/t in the first quarter, went down to US$$210/t in the second quarter, reached US$223/t in the third quarter, and dropped to US$168/t in the fourth quarter.
Based on Canadian customs records, the average achieved unit value in 2012, on a free-on-board (f.o.b.) basis, was $193/t for coking coal exports and $98/t for thermal coal exports. The average unit value in 2012 for Canadian imported coking coal was $149/t and for imported thermal coal was $65/t.
The majority of domestically sourced coal was from so-called “mine-mouth” operations, which involve extracting coal from a mine site and then trucking it to adjacent coal-fired power generation plants to produce electricity.
The majority of mining and power generation operators are engaged in long-term contracts.
Sherritt, the largest thermal coal producer in Canada, reported an average realized price of $17.48/t in 2012. However, NRCan says this price is merely a reflection of the cost of mining coal and cannot be regarded as the prevailing market price.
As just outlined, coal is the prime target for many miners around the world (particularly the Chinese) and it’s no wonder because there’s so much of it. In fact, the world’s total coal production was estimated at 7,865 Mt in 2012, of which close to half (46 per cent) was produced in China.
Canada, however, is no slouch at almost 67 Mt. The country ranks 13th in the world but for a nation with only 24 permitted coal mines by comparison to China’s 16,000 permitted (or otherwise) coal mines, that’s a very impressive place to be in terms of productivity.
* Information provided by Kevin Stone, Senior Advisor, Minerals and Metals Sector, Natural Resources Canada. The content is to provide general information. It is not intended as a reference, guide or suggestion to be used in trading, investment, or other commercial activities. The author and Natural Resources Canada make no warranty of any kind with respect to the content and accept no liability, either incidental, consequential, financial or otherwise, arising from the use of information contained in this article. e-mail: email@example.com