Northeast Coal Revival

By Lindsay Brumwell, Hillsborough Resources Limited

July 21, 2006: First of all Hillsborough Resources Limited would like to say ?Congratulations Tumbler Ridge? on your 25th. We are excited about the opportunities in the region and the revival of the coal industry in the area.

From yesterday to tomorrow, the economic potential in the Tumbler Ridge region is undeniable. The occurrence of coal in northeast British Columbia (BC) was first reported by Alexander MacKenzie in 1793 from observations along the Peace River north of Chetwynd. It was not until 1903, when Neil Gething found coal in the Peace Canyon deposit, that commercial coal mining really started to take off.

As a side note, if you have read coal marketing material or listened to presentations by new developers, they often mention that coal deposits are in Gething or Gates formations. The Gething formations are named after Neil Gething, whose family successfully mined coal in the 1920s and 1930s. The Gething and Gates Formations are internationally recognized terms and are associated with coal deposits of major economic significance.

Extensive exploration in the region started in the 1960s when world steel production took off. During the second half of the 1970s, fifteen major coal deposits were identified and coal properties were extensively explored. Since it was a very expensive venture to mine this coal and transport it some 1,000 km to tide water, customers who were willing to purchase large quantities of coal were needed.

In addition, a new community, power supply and transportation infrastructure needed to be built. The customer who was willing to commit to this type of an endeavour was the Japanese Steel Industry (JSI), which was actually nine steel mills buying coal as a group.

The BC and Canadian governments completed over 100 studies that investigated the overall economic, financial, marketing, environmental, coal resource and transportation requirements of the venture; total expenditures were well in excess of $100 million. This planning stage came to an end on February 10, 1981 in Vancouver when representatives of the JSI, the Government of Canada, the Government of BC, Denison Mines Limited and Teck Corporation signed an agreement named the North East Coal Development.

Everyone had their job and role to fulfill in order to make the agreement a success. The JSI agreed to purchase 115 million tonnes of metallurgical and thermal coal from Denison?s Quintette mine and Teck Corporation?s Bullmoose mine over a period of 15 years. The mining companies would build the mines and the governments would install the necessary infrastructure to facilitate the mines? development and shipment of the product. The mining companies, the government and the people of BC had 995 days before the first load of coal was to be shipped.