Island coal operation would supply Asian steel mills

By Marcel Tetrault
Canwest News Service
October 31, 2009

Plans are to extract washed coal for next 20 to 25 years

The coal seam stretching 25 kilometres in the hills between Fanny Bay and Courtenay on Vancouver Island might soon become a component of Korean and Japanese steel.

Comox Joint Venture, a partnership between Compliance Coal Corp. of Vancouver and subsidiaries of Japanese import/export company Itochu Corp. and Korean electronics, chemical and telecommunications giant LG, recently held an open house in Fanny Bay.

The 3,100-hectare underground coal deposit could contain as much as 100 million tonnes of coal. The partnership plans to extract between one and 1.5 million tonnes of washed coal annually for 20 to 25 years.

That is a lot of coal. According to project manager Dan Berkshire, all of the coal ever mined on Vancouver Island, excluding the existing Quinsam coal mine, amounts to just 50 million tonnes.

"This one project is larger than all of the total previous coal," he said. "It could potentially be a very big project."

The coal is metallurgical coal, used in steelmaking.

"It is really quite rare," said Berkshire. "And there is no substitute for metallurgical coal in the making of steel."

While the coal is all metallurgical coal, the company estimates about one fifth of the product extracted might be diverted to generate electricity.

"Possibly up to 20 per cent could be sold as thermal coal," said Berkshire. "We're still in the engineering stage so we don't know what the ratio might be."

Facilities planned for the site include mine entrances, a coal washing plant, storage facilities, stockpiles, waste rock piles and offices.

Those surface structures will be confined to a 200-hectare portion of the site that sits in a valley about six kilometres west of Fanny Bay.

Several different transportation plans are currently under consideration.

The coal might be shipped by rail or truck to Port Alberni and then shipped out in freighters or it could be trucked to either Middle Point in Campbell River or Duke Point in Nanaimo.

Compliance president and CEO John Tapics said that they hope to have the mine up and running by the end of 2012.

He said that where the company will get the water required to wash the coal is still to be determined.

"In terms of the overall need for any makeup water, there's still a question because the plant hasn't been designed."

Company representatives say the mine would provide about 200 direct full-time jobs over its 20-year life, about 40 jobs associated with transport of the coal and another 300 to 500 indirect support jobs.

The project is currently at the pre-application stage of the environmental assessment process. Once an application is submitted a review process is initiated that includes public consultation before the minister of the day makes a decision on the application.

The company expects to complete the environmental study, as well as a feasibility study for the mine, in the first half of 2010.

They hope to have the required government permits early in 2011.

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