Teck using downtime to gather bulk sample

Lynsey Kitching

 

While Teck Coal metaphorically paddles in the waters like a surfer, waiting for the wave of met coal prices to rise so they can ride, the company has decided to use this low tide to get the desire for their Quintette product into the minds of steel makers.

Ed Morash from Teck explains two or three years ago when they started to look into the project, the prices were around $300 a tonne, but now prices are more around $130 per tonne. For this reason at the end of July, the board of directors decided to not sanction the re-opening and to re-evaluate the project in the new year.

Though there is no update in terms of a time line for the new year, the target is to hit coal roughly a year after starting production.

Around the same time, the company hired around 30 employees, including equipment operators and trades people. Instead of laying off this workforce, the marketing team at Teck came up with the plan that these workers are going to get a bulk sample.

There are a few different areas that will be developed during the first phase of the new Quintette mine—the Window Pit and the Little and Big Windy pits. Little and Big Windy pits are located on Babcock Mountain that has already gone through a pre-development phase. There you will find three coal seams that are representative of the initial coal seams in the Window Pit.

The bulk sample, which will be starting this week, will be 50,000 tonnes of clean coal from the Big Windy pit. The coal is going to be used as the sample to be sent around the world to potential customers of Quintette coal.

Morash explains that many of the folks in the industry now have never seen Quintette coal. Even the people in the Japan steel industry that did know the coal have moved on.

“One advantage of this bulk sample is we can send five to eight thousand tonnes of clean coal to potential customers so they can determine how it will blend with their coals. That is the benefit of this delay, to go and get a bulk sample so when we do get up and running our customers may have already had the opportunity to evaluate our product,” says Morash.

For example, if they were to send 16,000 tonnes as a sample to Europe, with the mills being so close, they could determine how well the coal blends with Teck’s other coal from southern BC, says Morash.

The company will identify customers who blend their coal in areas of Europe, Korea, China and Japan.

This week the drilling and blasting will begin and continue until probably February when they complete the extraction of the raw coal. “Hopefully we go from February collecting the bulk sample, roll into shortly afterwards the re-opening of the project. But that is yet to be seen,” says Morash.

The question also being raised by Teck is whether to stick with the current feasibility study of extracting three million tonnes annually or to take a softer approach and put less coal on the market. Morash feels that may be the correct approach to avoid further flooding of the met coal market. This would also reduce the start-up costs for the Quintette project.

Other news from Teck is about their housing subsidy program, which is now in effect. Their employees who are residing in Tumbler Ridge are receiving a monthly housing allowance included in their package. The 37 lots Teck has purchased on the upper bench for development will be developed based on the re-opening.