Another mine bites the dust

Trent Ernst, Editor


Grande Cache Coal is the latest mine to fall victim to the low commodity prices that forced the idling of both Walter Energy’s Wolverine Mine in April and Anglo American’s Peace River Coal Project, which will officially wrap up operations tomorrow, January 16.

The troubled mine was purchased in 2011 for US$1-billion by a partnership of Winsway Enterprises Holdings Ltd and Marubeni Corp, back when the price of coal was US$300/tonne. The partnership entered into negotiations last fall to sell the company for US$2 (no, that’s not a mistake; they really are planning on selling the mine for two dollars, one apiece) to UP Energy Development Group Ltd.

Now, with coal hovering around the US$110/tonne, Grande Cache Coal is planning on shutting down its above ground operations on February 3.

The underground portion of the mine will continue to operate, at least for now, but the announced closures will put up to 250 of the mine’s 450-strong workforce out of work.

Grande Cache Coal produces metallurgical coal in the Smoky River coalfield.

Mayor Herb Castle says this is unfortunate, but not unexpected. “This has been such a…this community has had this sort of thing happen for so long. When things are still going, you expect the sky to fall. And then when it does, you just accept it. It’s a cycle that the town, that the coal miners, are used to.”

Castle says that the closures will affect the community, and businesses will be impacted, but the town’s first concern is for the people. “We’re very concerned about the impact on the families. Not just from a business perspective, but from a social perspective. How are we dealing with it? We’re just taking it one step at a time. People are quite brave and resilient. As a town, there’s not a lot we can do, other than support the people. We’d like it to be different, but…”

He says that he’s heard from a couple different sources that the layoffs will affect as few as 175 people or as many as 240. “Information gets scattered. We’re just like the employees. People give us a phone call, and tell us to be prepared for this, but then something different happens.”

Grande Cache is a resource town with similar DNA to Tumbler Ridge, though their commodity base is slightly broader than Tumbler Ridge. Like Tumbler Ridge, the town was an instant town, being created by order of the Alberta Government in 1966 to open the area up for the development of coal mines. Construction started in 1969. Like Tumbler Ridge, the town has suffered through the boom and bust cycle of an industry town.

Some people in town work in the oil and gas industry, though most oil and gas workers, Castle says, are part of the “shadow population”, living in camps outside of town.

There is also a mill 15 minutes outside of town, though the mill is also struggling. “There’s a lot of diversity, but there’s still a lot of issues around commodity.”

This last summer, says Castle, the mine closed temporarily, giving all the workers the summer off, as they had a huge stockpile. “That’s a destabilizing circumstance,” says Castle. “Some of them decided to get jobs elsewhere. They pick up and look elsewhere and get jobs in Fort Mac or some other coal mining town. Maybe even Tumbler Ridge.”

And this leads to problems further down the line, he says. The mining business is one that is hard to attract a labour force to, and so they attract people from all over the rest of the county. These people, says Castle, aren’t willing to move to Grande Cache and maintain their homes elsewhere. “They become part of that shadow population as well,” he says. “To build our town, we want long term stakeholders. This kind of stuff doesn’t do much for that. And then the cycle continues, because there’s not an active workforce nearby, so they import from elsewhere.”

“It’s absolutely devastating not just to the people but to the community. But it’s like the people in Japan. They got hit by a tsunami, but they get back up and start to rebuild.”