Coal’s revival divides Canada’s energy heartland again

Iain Boekhoff, Tribune News Service

At the top of Grassy Mountain, some 6,700 feet above sea level, seams of coal are baked into the mountainside, visible through mining in this stretch of the Rocky Mountains in southwestern Alberta from the early to mid-1900s. This and other former mines dot the picturesque mountain towns on the eastern side of the continental divide, the industry having moved out of the region decades ago after plummeting prices and demand made mining here unprofitable.

But Grassy still has more coal to give — much more. It’s now the centre of a yearslong battle pitting nearby towns’ economic interests against environmental worries from downstream communities and ranchers. And this time, it’s being driven not by demand to heat homes in Canada, but to feed steelmakers in China, Japan, South Korea, India and other Asian countries.

Nearly 60 years after this site closed, locals are once again pinning their hopes for an economic revival on this windswept mountainside. Northback Holdings Corp., a division of Australian billionaire Gina Rinehart’s Hancock Prospecting Pty., is working to reopen the former mine. This is Hancock’s second attempt after an earlier application was rejected by a joint federal and provincial review panel in 2021 over concerns about the impact on the nearby water ecosystem. Northback Chief Executive Officer Brad Johnston believes the company can address the deficiencies in its first application and go further in restoring the mountain, including much of the unreclaimed former mine site.

Hancock has spent more than a decade and over C$150 million ($105 million) on a project that faces stiff opposition and is still at least four years from opening. It’s promising to scale back its original plans by around 40% to produce 2.5 million metric tons a year instead of 4 million, boost reclamation efforts during the course of mining, build a water treatment plant and stick around for years after production ceases.

The company is persistent because its forecasts show an undersupply in the global market within the next decade and pricing levels far beyond what it costs to extract the coal. The proposal and others like it have struck a nerve in Alberta, a region traditionally friendly toward resource development, both in terms of public support and government policy. Country music star Corb Lund led a petition campaign this year to stop coal mining in the eastern slopes of the Rockies, attempting to force a provincial vote on the issue this month, unsuccessfully. A recent survey found a majority of the public would have supported his position in a referendum.

The fight over the project also reveals a little-known fact about Canadian coal. Within the country, it has been on a long decline, as governments moved to reduce coal used for power production. But at the country’s western ports, coal is still king of commodity volumes. About 39.9 million metric tons were exported from Vancouver last year, compared to 30 million tons of petroleum products.

While the province of British Columbia now accounts for the majority of coal production, Alberta has seen a number of proposals in recent years and the province recently approved an expansion of the Vista Coal Mine in Hinton, near Jasper National Park, that will make it the largest thermal coal mine in North America. About 70% of the world’s steel supply depends on metallurgical coal and Canada is the fifth-largest global supplier, accounting for roughly C$9 billion in exports.

Northback isn’t the only such new proposal in the Rockies. Northwest of Calgary, Valory Resources Inc. is pitching Blackstone, an underground metallurgical mine in Clearwater County, and another one called Mine 14 near the town of Grande Cache. In BC, Conuma Resources Ltd. reopened a mine near Tumbler Ridge in 2024 and a sister project was included in the province’s recent deal book marketed to global investors. Glencore Plc is also seeking to expand its Fording River site to maintain the mine’s 10 million metric tons of annual production.

Johnston, who took over as Northback’s CEO in July, says any coal mined at Grassy Mountain will all be for export off the west coast of Canada, largely out of the ports of Vancouver and Prince Rupert. The company’s projections, he says, show it can be profitable over the course of its projected 25-year lifespan due to strong Asian demand for steel-making coal, listing Japan, South Korea, Vietnam, Malaysia and India as possible customers. The type of coal here is also high-quality enough for European steel producers. “The world wants this coal, it needs it,” he says.

The proposal would be a major employer for the five historic mining communities near Grassy Mountain. He cites the roughly 400 full-time jobs needed to operate it and the C$2.2 billion in government revenue the mine will generate over its lifetime, according to a report prepared for the company by EY.

The company has already been sponsoring local organisations and has hired locals for its preparatory work, including a First Nations security contractor. Johnston says he is aiming to file another application in the coming months, with a potential target of opening in late 2030 if it receives regulatory approval. He acknowledges the company’s first application did not sufficiently deal with concerns over its environmental impact. A joint federal-provincial review panel found the project was “not in the public interest” and would harm the nearby population of westslope cutthroat trout. He believes their new proposal is improved enough to meet regulatory hurdles, but knows there’s widespread opposition to coal.