Teck’s Fording River coal operation has a lot of coal left to go

Despite over 40 years of mining and coal reserve depletion, the Fording River strip operation of Teck Resources, located in British Columbia, Canada, has plenty of coal reserves and life left, said a new technical report on the operation that Teck filed in March with Canadian regulators.

The Fording River Operations (FRO) consist of four operating surface coal pits along with several areas planned for surface mine development held under multiple contiguous coal leases and licenses. The total area covers 23,153 hectares, and is located about 108 kilometers (km) southwest of Calgary, Alberta, in the southeast corner of British Columbia near the town of Elkford.

The mine has been in continuous operation since 1971 and currently has a production capacity of 10 million tonnes of clean coal per year. FRO employs open-pit mining techniques utilizing mining shovels and trucks to release raw coals for processing on site. Clean coal production from FRO was 7.5 million tonnes in 2010.

FRO currently produces coal from four active pit areas using open-pit coal mining methods, with primary waste stripping and coal mining completed by shovels and rear dump haul trucks. The four active pit areas are the Eagle Main 4 Pit, Eagle 6 Pit, Turnbull South Pit and Henretta Phase 3 Pit. Future developments are planned for Castle Mountain, Swift and Turnbull.

The FRO primary product is high quality metallurgical coal used to make coke for the international steel industry. Major customers of Fording River products are located in all international market areas where Teck sells steel-making coal. FRO also produces a small amount of pulverized coal injection (PCI) coal and thermal products. Although the majority of the thermal product is consumed on site in the FRO coal-fired thermal dryer, some thermal product is sold on the international market.

The majority of the coal product from FRO is transported 1,150 km by rail to either Westshore Terminals or to Neptune Bulk Terminals. Teck Resources holds a 46% interest in the Neptune Bulk Terminals. A small portion of Fording River coal products can also be transported to Ridley Terminal in Prince Rupert, British Columbia, for export. Coal product also travels east to Thunder Bay Terminals for shipment to Ontario, the U.S. and international markets most effectively served from the East Coast.

Proven and probable coal reserves of FRO total 626.5 million tonnes. The estimated product coal tonnages resulting from the proven and probable reserves were 54.1 million tonnes and 572.4 million tonnes, respectively. This results in an average yield of 61% and total product coal of 626.5 million tonnes.

Said Teck’s March 5 annual report, which covers 2011 results: “Coal mined at Fording River is primarily steelmaking coal, although a small amount of thermal coal is also produced. The current annual production capacities of the mine and preparation plant are approximately 8.7 million and 9.5 million tonnes of clean coal, respectively. The majority of current production is derived from the Eagle Mountain pit. Proven and probable reserves at Fording River are projected to support mining at 2011 production rates for a further 75 years. Fording River’s reserve areas include Eagle Mountain, Greenhills Ridge, Turnbull, Henretta, and Castle Mountain.”

The annual report added about FRO: “Reserve increases in 2011 were attributed to the addition of the new Swift and Castle mining areas, which more than offset reserve reductions due to mine production of 7.8 million tonnes. The reserve estimate assumes a long term selling price at the Port of Vancouver of US$130/t for metallurgical coal at an exchange rate of C$1.10 per US $1.00.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.