Coal mining could be coming back to the Crowsnest Pass. Riversdale Resources Limited, a public entity based in Sydney, Australia, announced on Monday, January 5th, that it has entered into an agreement to acquire a portfolio of coal assets from Devon Energy and Consol Energy for $49.5 million U.S.
The coal properties that are associated with the deal encompass over 35,000 acres near Blairmore and Coleman and include the Grassy Mountain Project, which has already been the site of considerable exploration and feasibility work including 364 drill holes and two trial pits.
Riversdale has already started evaluating the potential for an open pit development at the Grassy Mountain site that could produce 4 million tonnes of coking coal per year.
In undertaking its review of the portfolio, Riversdale has been working with Norwest Corporation from Calgary, McElroy Byran from Australia and two recognized Australian based coal quality consultants.
In addition to Grassy Mountain, Riversdale has acquired the Bellevue, Adanac and Lynx coal exploration leases which currently contain an additional 160 million tonnes of estimated resources and extensive package of freehold accumulated by the vendors over the past 30 years, some of which will be key to locate project related infrastructure.
Mayor Bruce Decoux is welcoming the new project with open arms and has told the media that he is pleased with the optimistic future Riversdale Resources could bring the Crowsnest Pass.
Decoux told the press that he met with Russell Dann, President of Riversdale Resources last year to discuss the agreement.
“They were especially interested in the kind of people we have here,” said Decoux.
“They were interested in the workforce and the sociological aspect of the Crowsnest Pass.”
Decoux also said that Riversdale expressed concerns regarding the stability and governance of the municipality. They aspired to have a well laid out plan and wanted to know if they fit in that plan.
The Crowsnest Pass Herald had a one on one interview with Steve Mallyon, the Managing Director of Riversdale Mining. Here’s what he had to say about the coal mining project and their potential future in the Crowsnest Pass.
Pass Herald: What can you tell me about the processing plan of the company?
Steve Mallyon: The processing plan was really undertaken in the 1980s and since then there has been a lot of changes to technology with respect to the washing and preparation of high quality coking coal. At the experience of just having completed a major project in 2011, we had a lot of experience in utilizing some of the more modern technology in coal washing and coal recovery. The performance of those coals can be substantially enhanced and we can effectively produce two main coal products: high coking coal and pulverized coal injection. The coal is designed for the Asian steel market. We still have a fair a bit of work to do on coal quality, but we have that work well underway. We hope to have it largely completed by the close of 2013.
Pass Herald: Will a plant be built on site?
Steve Mallyon: Yes, a plant will be on site. The advantage to having a plant on site is that environmental monitoring and other monitoring is that much more effective in the sense that it is all in one operation.
Pass Herald: What is the plan for the rail loop and the connection to the main line?
Steve Mallyon: The rail infrastructure is very good. A lot has changed and a lot is happening. When we spoke to the mayor of Crowsnest and administration, they outlined the plans that the provincial government had for widening the road and getting a bypass for the road.
We are working with Myron and Bruce on that with the view to find the optimal location for the coal load out facility. There are a number of options to get the coal to the load out, whether it is trucking, a conveyer, or a rail line into the Grassy Mountain site. We are open minded on what’s best, not just for the company but also for the community. We really want to contain all the mining operations to one site, if it is possible.
Pass Herald: Can you tell me the timeline of the major milestones the company hopes to achieve?
Steve Mallyon: Our focus for 2013 isn’t to build a resource, as we already have that. Our focus is really on designing a flow sheet for the coal prep line and focusing on the coal quality. The other side of our plan is spending a lot of time on community engagement. That means communicating directly with the community. Our plan is to have a series of formal engagements with the community as well as informal ones, so that they are aware of what we are about. The great advantage with this place is that it is a coal mining area. Quite a few of people have already worked for coal mining operations, whether it be in Alberta or in B.C. What we want to do is communicate with the town on how we operate. That is the first and most important task for us. The other task is coal quality, as I mentioned earlier.
Pass Herald: What is the estimated disturbance this project is predicted to create?
Steve Mallyon: With respect to Grassy Mountain, the land is already disturbed. There was mining on Grassy right up to the 1960s. To some extent, we are dealing with some historical mining issues. We haven’t found anything that will cause a huge disturbance and disturbances will be gradual. The area of land that will be affected by mining is relatively small. I think that technology has changed so much that the problems that used to exist, including coal dust and noise are no longer as big issues.
Pass Herald: What watersheds will be affected by the coal mines?
Steve Mallyon: Our biggest concern is the historical mining and the potential for our slopes to release contaminative water. To date, we have not found any evidence of contaminate drainage. The rock structure is such that we believe contaminate drainage is minimal. Our policy is to operate with zero discharge. That has been the case at all our sites and we don’t see any impediment to implanting that at Grassy Mountain.
Pass Herald: Have you determined if the environmental asset is at a provincial or federal level?
Steve Mallyon: I think it’s at both at the moment. We have seen the government in Edmonton last year. I believe there are also assets that operate federally.
Pass Herald: Will any of the environmental work generate local jobs or will the jobs be consulted out?
Steve Mallyon: We are using only Canadian consultants at the moment.. The plan is not to Australianize this operation. I think you have enough Australians working the ski hills, I don’t think you need anymore. There are a lot of developed mining skills in Alberta and in the Crowsnest Pass, skills that we will need. We believe in establishing a base by undertaking the training necessary for local people to be employed for mining so that we don’t have to transfer people in and out of mines. We don’t believe that is an effective way to run a mine. I think there is great potential in the Crowsnest Pass for employment, as we are quite confident that there will be a mine in the future.