Xstrata, JX Nippon plan pre-feasibility study on Canadian coal mine

British Columbia Premier Christy Clark joined Xstrata Coal and JX Nippon Oil & Energy Corp. May 15 in announcing the joint venture’s investment of C$35m in British Columbia to conduct a pre-feasibility study of the Suska Coal Project, located between Tumbler Ridge and Chetwynd.

The announcement was made in Tokyo as part of a Clark trade mission. The pre-feasibility study is scheduled to be completed in the first half of 2013. The next step after that will be to undertake a detailed feasibility study and seek the necessary approvals, including assessment by the British Columbia Environmental Assessment Office.

Xstrata recently withdrew an ongoing assessment at that office of a First Coal highwall miner project. Xstrata has in the last year bought the First Coal reserves plus others in the area, prompting a re-working of the mine plans. The Suska Coal Project includes areas acquired by Xstrata in 2011 previously held by First Coal and Cline Mining. The project will produce coal to be used in the making of steel.

“Through Canada Starts Here: the BC Jobs Plan, our government is working to grow our economy and this recent investment confirms that we are on the right track,” said Clark. “Our industry partners can feel confident about their investments because of British Columbia’s low taxes, skilled workforce, and a transportation infrastructure that gets products to Asian markets quickly and efficiently.”

“Xstrata’s partnership with JX Nippon has put us in a positive position to advance the Suska Coal Project,” said Mark McManus, Executive General Manager of Xstrata Coal Canada. “The pre-feasibility study will involve significant expenditures on exploration and environmental studies to develop the appropriate mining solution for the delivery of vital natural resources and sustainable value for stakeholders.”

“JX is very excited about its US$435 million investment in Xstrata Coal British Columbia,” said Shunsaku Miyake, Director, Senior Vice President, JX Nippon. “We believe that the BC projects, including Suska, have significant potential for steelmaking coal production. This will allow JX to develop a new line of business and further diversify our market interests.”

Xstrata Coal, a unit of Xstrata plc, is the world’s largest seaborne exporter of high energy thermal coal and a significant producer of steelmaking coal. Xstrata Coal has recently established a significant presence in British Columbia through a series of acquisitions, which together form Xstrata Coal British Columbia. Xstrata, in the meantime, has signaled a plan to exit the Donkin coal mining project in the province of Nova Scotia in Canada.

JX Nippon Oil & Energy is a diversified energy company that is a wholly owned subsidiary of JX Holdings and a core operating company of the JX Group.

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.