September 10, 2012

Massive thermal coal mine planned for Hinton, Alberta

RICHARD GILBERT

staff writer

An Australian-based company has submitted an application to regulatory authorities in Alberta and is planning the construction of a mine near Hinton, which could become one of the largest thermal coal export facilities in North America.

“We are currently undertaking the detailed engineering, which will be the blue print for the entire mine,” said Chris Borowski, spokesperson for Coalspur Mines.

“The Vista coal project has a historical mine permit, which was granted in 1981. The previous owner went through the whole process of feasibility and drilled a lot of holes.

“We bought the leases and the permits were transferred with the property. However, we still have to update the mine’s regulatory status.”

Coalspur Mines recently submitted an application to construct the first phase of the Vista coal project, which will cost $879 million and covers about 10,000 hectares near Hinton, Alberta.

The Energy Resources Conservation Board recently called for public comment on the project, with a closing date of Sept. 24.

Vista is scheduled to be developed in two phases.

Phase 1 will produce five million tonnes per annum (mtpa) and Phase 2 will increase production to full capacity of 12 mtpa.

Phase 1 has already received a Mine Permit and Processing Plant Approval.

“If things go well with the regulatory side, we may get the initial clearing of trees and construction of roads started in the first quarter of 2013,” said Borowski.

“This would lead into the start of construction on the mining infrastructure in the second quarter of 2013, which includes pile driving and pouring concrete.”

According to Borowski, the construction of the first phase involves the processing plant, clean coal handling, raw coal handling and a rail siding platform, which includes a rail load out where coal drops into the train.

The platform is necessary for loading a train, without getting in the way of traffic on the main line.

Coalspur is evaluating the use of contractors for the construction phase and initial years of mining, in order to reduce the upfront capital costs of mobile equipment and capital required to develop Vista.

“We have the option to be the owner operator of the mine or to work with a mining contractor for the stripping of the overburden, construction and initial years of mining,” said Borowski.

“We are in the process of assessing options and getting quotes to compare the cost of doing it ourselves or hiring a contractor for both construction and operation.”

He estimated that about $150 million to $200 million could be saved by hiring a mining contractor.

Snowden Mining Industry Consultants Inc. completed a feasibility study on the Vista project in January that forecast a 30 year mine life with production of about 11.2 mtpa of saleable coal.

The study defined a marketable reserve of more than 313 million tonnes (mt) from a recoverable reserve of 566 mt, which makes the Vista coal project one of the largest undeveloped export orientated thermal coal projects in North America.

Construction of Phase 1 is scheduled for completion in 2014.

Production could begin in early 2015 and will coincide with the start of construction on Phase 2.

Additional capital of $373 million is required for Phase 2, which is scheduled for completion at the end of 2016.

The second phase would expand the mine’s production by seven million tonnes per year, and would be financed from cash flow.

In May, Coalspur bought 14,432 hectares of coal bearing leases in the Hinton region for $13 million, which are adjacent to the northeast boundary of Vista.

The Vista Extension forms the core of the $346 million third phase of the Vista coal project.

It would allow the enlarged complex to produce up to 15.8 mtpa of coal.

The third phase has the ability to leverage off of the infrastructure to be constructed on Vista due to its close proximity.

The initial development capital for the coal processing plant on Vista Extension is estimated at $98 million.

This cost represents the construction and installation of a third processing and drying module for the coal preparation, drying and materials handling facilities.

The Vista coal project will use CN Rail’s main line, which provides transport of coal to Ridley Terminals in Prince Rupert.

Coalspur plans to export coal from Vista to Asian markets, such as China, Japan and Korea to fuel electrical power plants.

Coalspur owns about 55,000 hectares of coal leases located within the Hinton region and is registered in Australia, with offices in Perth and Calgary.

Print | Comment