Need for steel-making coal continues to rise
Canada’s most abundant mineral resource delivers tremendous economic and social benefits that can’t be denied and recent trends show that Canada’s steel-making coal is particularly in high demand.
Recent statistics from (NRCan) show that 67 million tonnes of coal were produced in Canada in 2012 and of that total, 46 per cent was metallurgical or steelmaking coal. This was a 5.5 per cent increase in production from 29.5 Mt in 2011, to 31.1 in 2012, which is a positive sign for Canada’s metallurgical coal producers. In 2012, Canada also produced close to 26 Mt of thermal coal, the majority of which was used for domestic coal-fired power generation.
The increase in metallurgical coal production was driven by the demand for coking coal which is directly tied to the production of steel. Almost all of Canada’s steelmaking coal was exported with only a small portion shipped to domestic users. Canada’s metallurgical coal is exported primarily to South Korea, Japan and China through British Columbia ports and terminals. In fact, over 80 per cent of all of Canada’s coal exports go through British Columbia.
Coal is extremely important to Canada’s economic health and well-being. In 2012, the Coal Association of Canada (CAC) asked Pricewaterhouse Coopers to undertake an economic analysis of the coal mining industry Canada. They found that the industry makes an economic contribution of $5.2 billion to Canada’s GDP, including $3.2 billion in direct impacts and $2.0 billion of indirect impacts.
More than 42,000 people are directly and indirectly employed in the coal industry across Canada. This includes those who work in mine production, construction, exploration, transportation and reclamation activities as well as those who supply goods and services to the industry.
Canadians directly benefit from the coal industry through the royalties coal companies pay to governments. In addition to royalties exceeding $300 million annually, additional economic impacts on government revenues in 2011 was estimated at $698 million, which was available to fund public infrastructure, such as roads, hospitals, schools and government programs, which have the potential to enrich the lives of Canadians.
So what’s on the horizon for Canada’s coal industry?
There are several new projects which applied for regulatory approvals in British Columbia on the horizon including; Arctos located near Mt. Klappan (Fortune Minerals) Carbon Creek (Cardero Resources Corp.) located west of Hudson’s Hope in Northeastern BC, Murray River, (HD Mining) located southwest of Tumbler Ridge, Echo Hill (Hillsborough Resources) located north of Tumbler Ridge, Bingay (Centermount Coal Ltd.) located north of Elkford, and Sukunka (Xstrata Coal Canada) located west of Tumbler Ridge).
Five of these companies plan on producing metallurgical coal for export, and one plans on producing thermal coal for export.
There is also interest by companies including Altitude Resources, Riverside Resources, and Capital Investment Partners in the Crowsnest Pass area of southwest Alberta, an area known for its rich coal mining history. A number of other projects are under consideration to the northwest of Crowsnest Pass.
In 2015, Alberta’s newest coal mine, Vista, located in Hinton and operated by Coalspur, will become operational and will export thermal coal through the Ridley Terminal in Prince Rupert, B.C.
With about 6.6 billion tonnes of recoverable coal reserves, Canada has the potential to provide more than 100 years of production at current rates. At the Coal Association of Canada we are working hard to ensure that coal has a bright future in Canada.
The Association represents a broad spectrum of companies engaged in the exploration, development, production, transportation and commercial use of coal. This diversity provides us with a unique “big picture” perspective on trends and emerging issues in the coal industry which we can share with stakeholders, governments, media and the public.
The primary goal of the Association is to support its members in ensuring coal is developed in a manner that is safe, and socially and economically responsible. Through communication, outreach and advocacy activities, we work with our members to help Canadians and governments understand and recognize the importance of the coal industry.
We share a great deal of information at our annual conference and trade show. This year our conference will take place September 10-12 at the Westin Bayshore Vancouver. We’re delighted to have world-renowned coal analyst Gerard McCloskey back as the conference moderator.
We’re also excited to have 15 outstanding speakers from around the world presenting on the challenges and opportunities facing the global and Canadian coal industry. Our conference and trade show is open to anyone who wants to connect with Canada’s coal industry. To learn more about our conference you can visit our web site at www.coal.ca
Coal has been a part of our past but I think that it has a great future for our country.
*Ann Marie Hann is President, Coal Association of Canada.
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