Grande Cache coal mine looking to restart operations
Northwest Alberta mine shut down in 2015, laying off 400 employees
Steelmaking coal producer Grande Cache Coal says it plans to reopen its shuttered surface mine and coal-processing plant next year.
"It is expected that the [surface] mine will resume operations by the end of Q1 2017," the Chinese-owned company said in a regulatory update posted to its website this week.
The coal processing plant would start operating within a month of the resumption of mining operations, the update said.
But the plans depend on "shareholders' approval and the negotiation of key contracts," the company said, adding that pre-production activities would start in January.
The company also said it plans to apply to the Alberta Energy Regulator to mine one of its underground coal seams "and not to abandon it."
More information is expected at an open house in Grande Cache on Dec. 14, the company said.
Grande Cache Coal, a producer of steelmaking coal for export into Asian markets, has been the major employer in Grande Cache, a town of 4,000, 430 kilometres northwest of Edmonton.
The company was acquired by Chinese coal producer Up Energy Development Group Ltd. in 2015.
In February of that year, Grande Cache Coal suspended surface-mine operations and 175 workers were let go. In December 2015, it ceased underground operations as well, putting 220 more people out of jobs.
But times have changed in the coal industry. In 2015, the price of coking coal averaged $120 US per tonne. Now, it's selling for more than $300 US per tonne — prices not seen in five years.
'People interested' in investing in company
Gary Taje is the spokesperson for the United Mine Workers of America, the union representing Grande Cache Coal workers. He suspects there may be a move to find new ownership for the mine.
There are "people interested in putting money into the company to get it afloat … It appears they are close to making a deal," Taje said.
Taje had no further information about the potential investor or purchaser.
Grande Cache Coal did not respond to requests for comment.
Taje said restarting the surface mine could create between 100 and 130 positions. In October, Grande Cache Coal posted a job for a a surface-mine maintenance general foreman job on its website.
The job description says the general foreman would have direct responsibility for about 60 other workers, including heavy-duty mechanics, electricians, welders and a crane operator.
With the price at what it's at, that allows them to recoup their investments and prepare for a bigger operation.- Gary Taje, United Mine Workers of America spokesperson
Taje said there are successor rights for many former senior workers if the mine re-opens.
"We are working to make sure that guys are recalled," he said. "We don't want to see people hired off the street from somewhere else when we have people in Grande Cache who can do the work."
Taje said more jobs could be reintroduced if underground operations are resumed.
"The production levels they're talking about right now are about a million tonnes per year, which is relatively small. With the price at what it's at, that allows them to recoup their investments and prepare for a bigger operation," he said.
"This signals the start to a better future."
Resuming operations 'would mean everything'
The province is currently reviewing the viability of Grande Cache, and considering whether it should be absorbed into the Municipal District of Greenview. This follows a request made by the municipal council in June.
Municipal Affairs spokesperson Shannon Greer said the team that will direct the review has not yet convened. It's expected to meet in 2017. In the meantime, the ministry has provided Grande Cache with funding for an infrastructure study.
With a projected $60 million in replacements over the next decade and a dwindling tax base, the future of the town was at risk.
Town Coun. Shawn Moulun was relieved to hear the mine is planning to resume operations.
"That would mean everything right now," Moulun said. "Basically, everybody's got their fingers crossed that this is all true."
He said houses are foreclosing, school enrolment is dropping and businesses are quiet.
"Even with 100 jobs, it would give people hope," Moulun said. "It's 100 good-paying jobs. It would just help everybody out. And then if they could go back up to … maybe even 500, the town could maybe get back to its norm."