The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
VANCOUVER — Teck Resources Ltd. is sitting on a mountain of untapped coal at its Quintette property in northeastern British Columbia, hoping for market conditions to improve and give the project a new beginning.
Quintette supplied metallurgical (or coking) coal to Japanese steel mills from 1982 until it closed in 2000. Today the coal market is all about China, but prices have plummeted in the wake of the country’s slowing growth and ample industry supply.
In June of this year, the B.C. government issued a mining permit to clear the way for Teck to operate an open-pit mine at Quintette, which is forecast to produce three million tonnes a year of metallurgical coal, a key ingredient in the production of steel. But with coal prices down more than 50 per cent over the past couple of years, Teck announced in July that it decided to delay capital spending of $300-million in 2013 and $350-million in the first half of 2014 that had been earmarked for Quintette.
Having watched the corporation nearly collapse during the 2008-09 recession, Teck executives are being cautious in their approach to Quintette.
A subsidiary of China Investment Corp. has held a stake of more than 17 per cent in Teck since July of 2009. CIC, China’s sovereign wealth fund, became a crucial investor as it provided a lifeline of $1.7-billion in cash, months after the mining company faced severe financial pressures as its stock tumbled to $3.42 a share in March of 2009.
Teck expects to make a decision next April or May on whether to proceed with restarting the Quintette project, which would create up to 500 full-time jobs.
If Canada’s largest diversified miner gives the go-ahead, the project could be in commercial coal production in mid-2015, said Teck spokesman Chris Stannell.
Teck has spent more than $200-million in the past few years in an effort to revive Quintette, including money for engineering and development work.
Gordon Gormley believes the Quintette coal play has the potential to transform from a money pit into a valuable asset for Teck. Mr. Gormley formerly worked as an open-pit mining manager for Denison Mines Ltd., which oversaw Quintette’s launch in the 1982. He has kept meticulous geological records of the mining property. He sees a motherlode of untapped metallurgical coal, with rich seams of high-grade product that would be attractive to steel makers in China.
For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/teck-waiting-for-next-coal-wave-to-reopen-quintette/article14730523/#dashboard/follows/