Since 1915, the Northern Miner weekly newspaper has chronicled Canada’s globally significant mining sector.
While most of the plans for mega projects conceived during the past ten years in Canada lie collecting dust on a shelf somewhere, victims of an economy that refuses to colvalesee and a government that wants too much, one such project continues on. While it has by no means received its fair share of the fanfare enjoyed by the other, now-stillborn projects, the $2.5 billion coal development in Northeastern British Columbia is nearing completion after more than a decade of planning and intense negotiation.
And more than anyone else, two men are responsible for the success. We refer to Clifford H. Frame of Denison Mines and Robert E. Hallbauer of Teck Corp., who in a collective effort managed to secure long-term sales contracts overseas and in turn convince the government of the level support required in the huge infrastructure needed to move the coal to tidewater.
These are men who were able to see beyond the current maladies of the world economy and provide Canada with thousands of jobs and billions of dollars in future exchange revenue, not to mention bringing greater diversification to their companies at a time when most businesses are content stagnate.
While any major resource development can be a success only through the hard work of dozens of individuals, there are only a few around with enough courage to put their careers and reputations on the line by backing an expensive and often risky project, and with enough tenacity and insight to follow the project through to a successful conclusion.
These are two such men, and because their staunch refusal to allow the economy to choke their plans into extinction, The Northern Miner has chosen them as our Men-of-the-Year for 1982, the first time the honor has been given out to two people.
Denison is the project leader in the development, with a 50% interest in the 6.5 million tonne-per-year Quintette mine, putting up some $450 million. Contracts have been secured for 15 years to sell five million tonnes of metallurgical coal and 1.5 million tonnes of the thermal coal annually to the Japanese. Meanwhile, Teck will be mining about 1.7 million tonnes annually from its approximately 68%-owned Bullmoose project. Like the Denison contract, this one is also in place over a 15-year term.
While the key to a positive production decision by both companies was the securing of long-term sales contracts, all sides agree that the toughest part was negotiating with the federal government for the Ridley terminal. But as a measure to the conference in the project held by both our Men-of-the-Year, construction actually began on the projects months before the Ridley negotiations were actually completed.
Hallbauer: ‘a habit of being right’
In many ways Robert Hallbauer a senior vice-president at Teck epitomizes the industry’s perception of itself. For one thing, it wouldn’t be unusual to find him on the telephone discussing the relative merits of one particular mining method over another, with his pinstriped suit jacket hanging from the telescope of an old mining keepsake.
But that is only a small part of the man who led the team which negotiated Teck’s participation in the big coal project. Without exception, Mr. Hallbauer’s colleagues describe him as a ‘first rate mining engineer,” with a good knowledge of the industry, as well as being very astute commercially, a good builder and a person who knows how to run a division and delegate authority to competent staff members under him.
Norman Keevil Jr., executive vice-president of Teck, provides a lighter side to Mr. Hallbauer’s character: “He is a man who has a habit of being right most of the time, especially in forecasting elections,” adding the “he is good at economic trends as well.” But when questioned about Mr. Hallbauer’s outstanding characteristic, he quipped: “It’s definitely his seven handicap in golf.”
Other people confirmed he played the game with the same passion and professionalism with which he tackled the Bullmoose project. One acquaintance even went further, concluding Mr. Hallbauer could have played the game professionally.
As the first senior manager at Teck to recognize the potential of Afton Mine, Mr. Hallbauer urged the company to go after it despite the widely held consensus at time that the native copper content in the orebody was a major stumbling block. While the current recession has forced the closure of the Afton, it has to be counted as a major success story for Teck, since it is also one of the largest gold producers in B.C. and may very well be one of the last B.C. copper mines to come on stream in the foreseeable future.
Another one of Teck’s projects, the Highmont copper-molybdenum operation in Highland Valley B.C. is going full bore despite the depression. So is the Lornex mine, in which Teck has a 21.6% interest.
Mr. Hallbauer’s first exposure to the Highland Valley came through his eight years of experience at Craigmont Mines, controlled by Placer Development. He started there as a mine superintendent and was mine manger from 1964-68 until, after 14 years with Placer, he joined Teck.
Craigmont was the first significant open pit mine in British Columbia and a close associate of Mr. Hallbauer’s recalls how, after visiting a number of open pits operations in the U.S., he recognized the merits of electric shovels and purchased three of them, the first in British Columbia. That was Harnischefeger’s biggest order of the year. He also immediately recognized the design limitations of the rotary drill rigs offered by another supplier, and insisted the masts be modified so open pit benches could be drilled off in one pass.
His associate also paints him as a man who, after deciding what is right, won’t be satisfied with anything less – something other management people agreed with whole-heartedly.
Mr. Keevil says the Bullmoose was the toughest project Mr. Hallbauer ever worked on, and although negotiations started in 1972 to sell coal to the Japanese from the nearby Sukunka property (now owned by BP minerals), it has been more or less continuously under way since 1977 with Mr. Hallbauer heading up the negotiating team composed of David Thompson, vice-president finance, and Richard Drozd, now vice-president coal operations. While these gentlemen provided valuable input into the talks, the final decision was always left to Mr. Hallbauer.
Mr. Keevil has the last word on the man who made at least two dozen trips to Japan to conclude the coal contract, and countless others in Canada between various government agencies at all levels: “In any golf tournament, I always make sure I’m on his team.” Everybody else at Teck feels the same way.
Frame: ‘a hard-driving mining man’
You would think that once the major hurdles in a project the size of the Quintette coal deal had been cleared, the man most responsible for it would be content to relax just a little and watch his designs become reality. But not Clifford Frame, president of Quintette Coal, and, as of mid-December, president and chief operating officer of Denison Mines. But with the Quintette still more than a year from commercial production, Mr. Frame is already setting his sights on putting together two more projects in the same area of British Columbia.
“The infrastructure is already set up,” says Mr. Frame, referring to the town of Tumbler Ridge and the rail link to the Ridley coal terminal on the west coast. Denison is already combing the world markets for buyers of any coal that might be mined in the future from the Belcourt and Saxon projects. “We keeping probing around for contracts,” he says, admitting the market is extremely soft.
And that is just the point. Everybody knows the markets are weak, and here is Denison already looking at countries like Brazil and India for possible sales from mines that haven’t even started to be built. Most companies would have put projects like that in the dormant file months ago out of sheer frustration.
Complete mining man
It’s hard to imagine finding a more complete mining man anywhere, one who started his profession at the bottom of a shaft mine and now, reaching the pinnacle of his career at 49 years of age, sits in a plush office on the 39th floor of Toronto’s Royal Bank Tower. In between these two extremes, Mr. Frame has been employed at almost every conceivable managerial level in mining.
Mr. Frame’s associates at Denison tend to agree.
“Clifford Frame is a very hard-driving, hard-working man. He is proud of his long mining background being brought up in Trail, B.C., and involved in mining all of his life,” commented Charles D. Parmelee, executive vice-president, corporate affairs, Denison.
“In my experience, working together with Cliff at Denison and its related projects,” E. Bruce McConkey, Denison vice-chairman, said, “I have found him to be very keen and aggressive in realizing goals which, at times, are very substantial.
“He is a well-rounded mining executive in the technical sense and also in the broader sense of the requirements needed to manage large capital resources and pools of labour and equipment. He is very goal-oriented and measures operations and projects in a careful manner.”
After working summers with Cominco at Trail and Kimberely, B.C.,Mr. Frame graduated from the University of British Columbia as a mining engineer. He worked a short stint with Britannia Mines after graduation, before going to Denison as a mine captain at Elliot Lake.
After three years, in 1960, he left to tackle the job of chief mines planning engineer with Inco during the early development days at Thompson, Manitoba. He stayed there for six years before going back to Denison as assistant manager at Elliot Lake. Three years later he went back to Inco, working in both Australia and Indonesia as vice-president operations, of its subsidiaries there.
Next he went to Ireland, where he was general manager of Tara Mines before coming back to Denison in 1975 as an executive vice-president.
His involvement with the Quintette project began immediately upon his return, when a letter of intent was received from Japanese buyers to purchase five million tonnes of coal annually. But the next four years were relatively quiet with feasibility studies being conducted on numerous levels.
Mr. Frame’s participation in the project began to get intense in 1979. Enough coal had to be contracted for to warrant development of the B.C. interior, and Denison found it was facing competition from Australian interest with similar proposals. As leader of a negotiating team consisting of Richard Herman the vice-president of coal operations at Denison and Derek Rance vice-president of Quintette and general manager of operations.
Mr. Frame’s skill and experience in numerous international ventures was put to the test. In little more than a year, Quintette had its contract, and construction began even though it was uncertain then if agreeable terms could be reached on a port facility. That came near the end of 1981, and construction has been going ahead since, with the first coal to be shipped in early 1984.