Erdene guides Donkin coal project through review process

Erdene Resource Development (TSX: ERD), which is in the process of divesting its 25% share in the Donkin coal mining project in Nova Scotia, said July 26 that the project is making progress through an environmental review process.

The Donkin project is owned through a 75:25 joint venture between Xstrata Coal Donkin Ltd. and Erdene, with parent Xstrata plc recently announcing its intent to sell its entire 75% interest as it focuses on larger-scale projects.

The environmental impact statement for the Donkin project was filed on July 16 with the Canadian Environmental Assessment Agency (CEAA) by Stantec Inc. on behalf of Xstrata Donkin Coal Management Ltd. In association with the filing, Xstrata hosted community meetings in both Donkin and Sydney, Nova Scotia, to provide the public with an opportunity to learn more about the project and the environmental assessment process.

The Donkin project is subject to both the Canadian Environmental Assessment Act and Nova Scotia’s Environment Act and is undergoing a cooperative environmental assessment process. It is anticipated that this process will conclude by the second quarter of 2013 with a decision from the federal and provincial environment ministers.

The Donkin proposal includes the construction and operation of an underground coal mine with a lifespan in excess of 30 years. Underground operations would include multiple continuous-miners producing about 3.6 million tonnes per annum (Mtpa) of run-of-mine coal. A coal handling and processing plant capable of processing the raw coal will be constructed to produce about 2.75 Mtpa of product coal suitable for international coking coal markets as well as international and domestic thermal coal markets. The coal will be transported to international markets via a newly constructed barge-to-ship load-out facility.

The Xstrata Donkin sale process, announced April 26, is anticipated to be concluded before the end of 2012. This process is expected to culminate with the selection of a company with the mining experience, technical expertise and financial capability to operate the proposed mine. Erdene has a 60 day right of first refusal to acquire the Xstrata interest by matching the terms of any offer recommended for acceptance by Xstrata. Erdene said it has entered into discussions with multiple parties to assess various options to participate in the Xstrata sale process including acting on its right of first refusal.

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.