Asian boom stokes Canadian coal sector

Coal is king again in Canada as producers scramble to increase their output to take advantage of new clean-coal technologies and to meet surging demand in Asia.

Natural Resources Minister John Efford believes coal will be at the forefront of a mining boom in 2005, accompanied by the opening of uranium, diamond and nickel mines.

He has promised coal miners that the Canadian government's implementation plan for the Kyoto Protocol, announced April 13, will strike a balance between fuelling the economy and protecting the environment.

Efford, noting that Canada's mineral and metal exports are expected to hit C$50 billion this year, said it is fine for Canada to strive for a "perfect environment, but if we don't have an economy we have equally major problems."

In particular, he said the coal industry is often misunderstood by environmental critics. Calgary-based TransAlta, identified as Canada's second largest source of greenhouse gases because it burns coal to produce 65 percent of its electricity, is also leading the drive to develop clean-coal technology.

In a joint venture with Epcor Utilities, the company has just completed a 450-megawatt plant southwest of Edmonton, which it says will make environmental history.

The facility includes C$90 million in clean air technologies that will reduce nitrogen oxide emissions by 50 percent, prevent 99.8 percent of fine particulates from reaching the atmosphere and cut sulfur dioxide emissions significantly below the Alberta government standard.

Epcor President and Chief Executive Officer Don Lowry said the investment in long-term solutions will "lead to permanent, substantial cuts to emissions and strengthen the Canadian economy."

Luscar expands Coal Valley

On the mining front, Luscar Energy Partnership has embarked on a C$75 million expansion of its thermal coal production at its Coal Valley mine in Alberta to produce an additional 4 million metric tons, mostly for export to Asia.

Earlier in April, Vancouver-based Western Canadian Coal Corp. reinforced the seller's market by announcing deals to sell production from its newly opened Dillon mine to Asian steel mills for more than US$100 per metric ton for the current contract year.

In response to the hot demand, the company has also applied to British Columbia's Ministry of Energy and Mines to raise its production limit to 800,000 metric tons per year from 240,000 metric tons and is advancing plans to develop an adjacent mine.

Western Canadian's objective is to produce 5 million metric tons a year by 2009.