Xtrata Update

Lynsey Kitching
 

(l-r) Dayton Ostrosser, Mine Manager for Xtrata Coal talks with Interm Project Manager Peter McEwen from Walter Engery's Brule Mine. Lynsey Kitching photo.
 
Xstrata delivered its presentation at the Coal and Energy Forum to discuss the progress to its local coal mining projects. Headquartered mainly in the United Kingdom, Xstrata is a $54 billion company that employs 62,000 workers worldwide. According to their plans, they will add more than 1,000 workers to that total from the Tumbler Ridge and Chetwynd areas.
 
Xstrata had a presence in Canada prior to their coal business, with Xstrata Nickel, which is headquartered in Toronto.  They are also the world’s largest exporter of thermal coal, with 30 operating mines; a large number in Australia, South Africa and one joint venture in Colombia. In 2010, they extracted 96.5 million tonnes of coal. Ben Coleman (great name for this topic), Technical Services Manager for Xstrata said, “There is a possibility to double that scale over the next coming periods.”
 
Coleman explained safety and sustainable development to be key values to their business and they have a number of programs to improve safety performance, though none of these were discussed in detail. Until last year, they were the global index leader in sustainability (Dow Jones Sustainability index), however, last year they were over—taken by Anglo American.
Xstrata recently sold a shareholding to Holland Energy. Coleman said, “They are a significant supplier in the Japanese Market. We partnered with them on a number of our Australian coal businesses. They are a strong part of marketing our coal to the Japanese.”
 
Xstrata will be looking to export thermal coal from the Peace Region and have two projects in the exploration stage. The Suska project is up the Hassler Forestry Service road one valley to the west of the Willow Creek mine. The Sukunka project is just adjacent to Tumbler Ridge in the Sukunka Valley.
 
The Suska project will be taking place in an area where there has already been some exploration. Coleman said, “There was a lot of information gathered prior to things going quiet in the 80s.” One of the first stages to their projects has been an environmental monitoring program. Coleman said, “We’ve spread the net fairly wide in this program. We have talked to people about effects. We’ve tried to cast this net out to capture all of the watersheds that might be impacted by the projects and also the impact to any transport routes.”
 
The environment baseline studies for the project were completed in December 2011, and since then, Xstrata has done some work on the building program, which is now complete. Coleman said, “We have a 35 person camp in the valley. Phase one was to check if the coal we thought was there is present before proceeding with future phases,” he continued, “We have also contained the project to previously disturbed areas. Phase two is in the work application stage and they’re hoping to start the drill program shortly.”

The Suska project is an open—cut mine with the potential to create 600 direct jobs. Coleman explained the company has tried to remain out of environmentally sensitive territory, especially territory which is home to caribou, and says drilling will commence relatively soon. He said, “We have avoided caribou habitat with the phase one and two projects. We think drilling will start in November.”
 
The second mine project is the Sukunka project. The main access for the project will be from the Chetwynd side, given there’s a significant mountain range between the mine and Tumbler Ridge. Xstrata expects to have a pit production of around five million tonnes. Coleman said, “We purchased Sukunka from Talisman Energy Inc. earlier this year,” he continued, “There has been previous mining activity there with some test pits back in the 70s and 80s.The project contains open—cut and underground reserves and had been fairly well drilled at the time, with an underground mining operation. They extracted about 100,000 tonnes. We are proposing about 17 holes in that area and are staying out of the caribou habitat.”
 
On the topic of caribou protection, Coleman expressed some concern about how governments are going to handle the endangerment of the caribou in relation to potential mining projects. He said, “I think for us, that’s been a strain, given there’s uncertainty about how the provincial and the federal [governments] are going to approach the caribou issues.”
 
Xstrata is expecting to commence drilling this month on the Sukunka project. There will be a 35 person came through the winter and about 400 direct jobs from the open—cut, however, they are not yet sure about the number of jobs being created by the underground operation.
 
Underground mining in BC has been brought under some scrutiny lately due to HD Mining’s Murray River project and the mass—importation of Chinese miners to begin work on their mine in the Tumbler Ridge area. When asked how Xstrata is going to handle the training of Canadians, Coleman explained why training Canadians to do the job is on the top of their list. He said, “Our business is typically built on local resources. That’s the only sustainable model in the end,” he continued, “Obviously there is a shortage of people willing to work, or that have the aptitude to work in underground mines or open—cut. It is something we are going to have to address through our ongoing pre-feasibility study.”
 
Coleman then related the training needs here in BC to training needs and solutions in Australia, saying, “There will no doubt be a training facility. It will be a core part of our business. I can speak to our business in Australia and the regional shortages we have seen there. There were a lot of inexperienced mine workers who had driven heavy machinery elsewhere, but not in a mine context. We brought them up to speed and it has been a successful outcome for our Australian operations.”