The cost of less cold
As my bones get older, I enjoy a mild winter like 2005-06. Whether the warmer-than-average season is a sign of global warming or not is open to debate. What we can say with certainty is that the more clement climate has wreaked havoc with ice roads and sent producers scrambling.
Western Canadian Coal has been forced to suspend operations at its Dillon coal mine due to an early spring break-up. The temporary suspension began on March 31 due to road weight restrictions on public roads that are also used to haul coal from the mine in northeastern British Columbia to Ridley Terminals. There is a brighter side: the company anticipates saving $5 million in cash operating costs during the suspension.
Operators of the Tibbitt to Contwoyto winter road suspended use of the facility temporarily on March 22 and permanently for the season on March 26. The road was deemed no longer safe despite efforts to halt the thinning ice in the face of warm temperatures. Nor have alternate ice routes or other means of stopping the thaw been found. The road is managed by a joint venture of Diavik Diamond Mines and BHP Billiton Diamonds. The road never did reach full capacity this year, and operated for only 42 days in February and March. Goods for the mines that had already reached Yellowknife will be stored, returned or repackaged for later delivery by air.
Aber Diamond Corp., 40% partner in the Diavik mine, said that before the road was closed the mine had stored enough diesel fuel on site for 10 or 11 months of operation. Most of the trucked equipment reached the mine except 10 loads of excavator and dike construction components. These loads will need alternate means of delivery. Aber said, fortunately, no suspension of mine operations is planned.
Tahera Diamonds, which recently opened its Jericho mine, has been affected by the melting ice road, too. Approximately 60% of the loads, including over half the fuel supply, reached the site before the end of March. Tahera sees no need to cut production levels, but it will have to defer waste stripping and capital projects into next year to conserve fuel. The company says if it has to airlift supplies to the mine, it will cost an extra $3 million or $0.75 per kilogram or litre compared with trucking rates.
Not just producers are feeling the pinch of reduced transport capacity. Peregrine Diamonds has chartered Hercules aircraft from First Air to fly in fuel so that bulk sampling and diamond drilling can continue at the WO project. The company says drilling will continue from the frozen lake until it becomes unsafe, but when the road closed the ice under the drill was approximately 195 cm thick.
There is a correlation between rising temperatures and rising production costs. Let us hope the 2006-07 winter is more favourable to normal shipping practice.