Maxim Power Corp. (TSX:MXG) said March 22 in an earnings statement that it is moving forward with both a new 500-MW coal unit at its Milner plant and the 190-MW Deerland gas peaker.
In August 2011, MAXIM received approval from the Alberta Utilities Commission for the 500-MW Milner project, known as M2. MAXIM is planning to construct this unit on the site of and adjacent to the existing 150-MW Milner coal plant. The M2 design incorporates emission control equipment capable of achieving 60% to 80% reductions in SO2, NOx and mercury compared to the conventional coal-fired power plants still operating in Alberta. The highly efficient M2 design will also reduce CO2 emissions by 20% compared to these existing plants.
MAXIM is also actively pursuing commercial arrangements that will allow for the construction of the 190-MW Deerland peaker, called D1, to commence in 2012. MAXIM received regulatory approvals in 2008 for this project. The D1 site is located near Buderheim in Alberta’s industrial heartland, in close proximity to the entry point of the proposed Gateway pipeline and adjacent to the existing Deerland high voltage substation. This area is expected to experience significant growth in electrical demand.
MAXIM has also acquired the Buffalo Atlee Power Project (B1), located near Brooks, Alberta, through an amalgamation with EarthFirst Canada. This project has the potential for development of over 200 MW of wind generation. Wind data has been collected on the site for about four years and supports project development based on higher power prices than those realized during recent months. MAXIM holds an exploratory Crown land permit with a term of five years, expiring on Jan. 1, 2016.
“The addition of wind generation to MAXIM’s existing portfolio of assets will diversify MAXIM’s generation fuel types and provides the potential to offset the impact of proposed carbon legislation,” the company noted. “MAXIM plans to advance the development of this project once greater clarity on carbon policy is available in 2012.”
Another project in the works is the Summit Coal Mine 14, called M14. MAXIM has advanced the development of the M14 metallurgical coal resource during 2011 and is currently assessing the potential to expand the coal resources within its three coal leases. In December 2009, the Alberta Energy Resources Conservation Board (ERCB) granted Milner Power a permit to develop this underground coal mine. On April 2011, the ERCB granted Milner Power the license to commence underground mining. M14 will be located north of Grande Cache, Alberta and is estimated to contain 13 million recoverable tonnes of high quality metallurgical coal. The resource is considered valuable both as a potential fuel source to Milner and for the potential sale of coal to met coal markets.
In August 2011, MAXIM incorporated Summit Coal, which entered into a partnership with Milner Power Limited Partnership (MPLP) to form Summit Coal Limited Partnership. Under a contribution agreement between MPLP and the Summit partnership dated Oct. 3, 2011, MPLP agreed to contribute all of its interests in M14, including its interest in the coal leases, to the partnership in exchange for limited partnership units.
During the third quarter of 2011, an adit was completed to recover un-oxidized coal for the purpose of conducting metallurgical quality testing. Results of this testing confirmed that M14 coal is a low-mid vol met coal.
On Dec. 15, 2011, Summit entered into a ten year terminal services agreement with Ridley Terminals, commencing Jan. 1, 2015. This agreement provides the Summit partnership with firm terminal capacity and terminal processing services to enable the majority of Summit’s proposed coal production to access the high-demand seaborne coking coal market. Signing this agreement reduces the development risk for the M14 project, MAXIM noted. Summit has also secured firm 2013 delivery dates for critical mining equipment, including two continuous miners and three shuttle cars.
Based in Calgary, Alberta, MAXIM is an independent power producer that currently owns and operates 40 power plants in western Canada, United States and France, having 788 MW of electric and 111 MW of thermal net generating capacity.