By R. Bruce Striegler

In 2011, U.S. coal giant Walter Energy paid $3.3-billion in cash and stock for Vancouver-based Western Coal Corp. According to analysts, the company thought it was creating a dominant North American metallurgical coal producer for years to come. The market was on fire, and the Canadian operations provided Walther with one of the best production growth profiles in the industry. Unfortunately for Walter, the deal backfired in almost every way. Coal prices dropped, the company ended up in a proxy fight with a former Western Coal shareholder and in April 2014, Walter announced it was closing all the Canadian operations it bought through the Western acquisition. Combined, these operations produced 3.6 million tonnes of coal in 2013, and employed more than 695 workers. Walter Energy, Inc. announced later in 2015 that its wholly-owned subsidiary Walter Energy Canada Holdings, Inc., had obtained creditor protection under the Companies’ Creditors Arrangement Act (Canada). Walter Canada’s operations consisted of three surface mines: the Wolverine Mine, the Brule Mine and the Willow Creek Mine.

In the fall of 2016, Conuma Coal Resources Limited and Walter signed an Asset Purchase Agreement, and shortly after, Conuma put 170 coal miners back to work at the Brule mine. Conuma Coal was established by West-Virginia-based ERP Compliant Fuels as a stand-alone Canadian company to purchase the mines. Conuma Coal Resources is an affiliate of ERP Compliant Fuels and the Virginia Conservation Legacy Fund. The group and their affiliates have purchased several distressed coal properties in the United States from companies that have sought Chapter 11 bankruptcy protection over the last 10 months. However, the Canadian assets are the group’s first international purchase. The Brule Mine is an open pit metallurgical coal mine and produces a premium low volatile pulverized coal injection (PCI) product. Coal from Brule is transported by truck to the Willow Creek Mine for processing and shipping.

The coal mines in the Tumbler Ridge area have for years shipped their products by CN Rail to Port of Prince Rupert’s Ridley Island Terminal. However, the line has been decommissioned after the area’s coal mining operations shut down in 2014 and 2015, leaving the re-commissioned mines without a rail connection. Published reports suggest that up to $23 million worth of repairs will be required to restore the lines to useable conditions. CN Rail responded to Canadian Sailings request for details by statement, saying, “CN reached an agreement with the coal company and will be moving forward with improvements to restore service to the rail line later this year. Coal is moving from the mine by way of a transload operation during the interim period.” Details of who will be paying for the rail improvements have not been released.

Ridley Terminal President, Marc Dulude, told Canadian Sailings, “Ridley Terminals Inc. (RTI) is proud to be a partner in a project that will generate jobs and wealth in B.C. We are determined to make a difference in this regard and turn RTI into a major North-American gateway that will generate more and more new projects.”

Wolverine Mine reopens at the beginning of 2017

On January 2, 2017, more than 200 unemployed coal miners began returning to work in B.C.’s Peace River area as Conuma reopened its second shuttered mine, Wolverine Mine, located approximately 15 miles south of Tumbler Ridge, B.C., an open-pit metallurgical coal mine with a coal processing plant and a rail load-out facility capable of handling 2.0 to 2.5 million metric tons per year. The mine produces premium metallurgical coal. “Restarting the Wolverine Mine is tremendous news for families living in and around Tumbler Ridge,” B.C. Energy and Mines Minister Bill Bennett said through a press release. “This mine will create approximately 220 new well-paying jobs in the region, on top of the 170 jobs created when Conuma Coal reopened Brule Mine last September. The restart of these two mines is a significant boost to the economy in the Peace Region.” The company will spend $40 million on improvements to make the mines more efficient and able to withstand a drop in coal prices.

The third mine in the trio yet to reopen is the Willow Creek Mine. The open-pit metallurgical coal mine with a coal processing plant and a rail load-out facility, produces both metallurgical and coal used for pulverized injection purposes. Its coal reserves are comprised of an estimated one-third metallurgical coal and two-thirds low-volatile pulverized coal (PCI). Conuma wants to restart the Willow Creek mine by mid-year, and currently B.C. Mines Minister Bill Bennett said his staff is reviewing that proposal.