Headline: Ottawa says no to Glencore’s Sukunka open-pit coal mine project in B.C.
I don’t think anybody should be shocked these days that opening up a new coal mine in British Columbia is next to impossible. It will be killed at the environmental regulatory process.
Glencore has been at it since 2013 and halted in 2016 and 2018 to obtain more data on cariboo and water quality and perform further consultations with various First Nations bands. Interestingly enough, one of the identified impacted First Nations bands, McLeod Lake Indian Band, issued a letter in support of the project. The various reports made for fascinating reading.
On this post, I am not making judgement on the environment assessment process or to determine its efficacy or whether it was a good decision made or not; however, I will point out the obvious that this is not the only project to be bludgeoned on the entrails of the environmental ministry and it will not be the last. What this does, however, is provide a huge layer of incumbency protection on the existing projects (especially looking at Teck).
Practically speaking, there are two coal miners in British Columbia – Teck and privately-held Conuma Resources. Looking at their transparency reports (Teck, Conuma) it is like the proverbial elephant and mouse in terms of their contributions to the government.
The last (to my knowledge) issued environmental assessment certificate given to a coal miner in BC was to HD Mining in 2017 for their proposed 6 million ton a year metallurgical coal mine project near Tumbler Ridge, BC. While there was a very colourful story to this company almost a decade ago, today it is pretty obvious that the project is still dormant.
Considering that Teck got rid of its interest in its Quintette coal mine (for a not insubstantial $120 million) to Conuma very recently, there is still obvious economic value in these residual interests even if they are dormant.
However, developing a new mine from scratch in BC is going to be very difficult to clear through the government regulation. Incumbency protection is very significant.
happy holidays Sacha and thanks for all the work you put into these articles. Here to a better 2023 for all of us! (although markets look iffy for next year -LOL)