Various First Nations groups said Nov. 23 that Fortune Minerals was the target of another recent public protest in response to its controversial plan to build an open-pit coal mine on Mount Klappan in the heart of an area of British Columbia known as the Sacred Headwaters.
The groups – the Iskut Band Council, the Skeena Watershed Conversation Coalition and the Tahltan Central Council – said that five protesters gained entry to the “Hard Assets” mining investors’ conference in San Francisco carrying a large banner that read, “A Risky Investment: Fortune Minerals. Don’t fund social conflict on First Nations Land.”
“Our community will be severely impacted as this area is where our cultural activities take place. This project will destroy a way of life for our people if it goes ahead and we have said as a community that it’s never going to happen, we will do anything we have to in order to stop this development!” said Iskut Band Chief Marie Quock.
Quock said Fortune’s claims that it is working with the Tahltan First Nation, on whose traditional territory the coal mine is located, are false. In 2006, members of the Tahltan blockaded the main access road, the group said.
In September, the Tahltan Central Council issued a press release stating, “We want to make it clear that the Klappan area is one of the most sacred and important areas for the Tahltan people. It is a place of tremendous cultural, spiritual, and social importance. It is not an area that the Tahltan people have expressed interest to see developed.”
Fortune’s mine plan is controversial because Mount Klappan sits at the centre of the Sacred Headwaters, where three of North America’s most valuable wild salmon rivers – the Skeena, Stikine and Nass – all originate. Tahltan families have long relied on the area’s moose, caribou, and wild salmon for sustenance. The Sacred Headwaters is also the site of another controversial proposal: a Royal Dutch Shell plan to drill for coalbed methane, the groups said. In 2008, the B.C. government placed a moratorium on gas drilling after strong opposition from the Tahltan and downstream communities who are opposed to development in this sensitive area.
Fortune pursues project with new partner POSCO
Fortune said in a Nov. 9 financial report that in 2011, it and Fortune Coal Ltd. (FCL), a wholly-owned subsidiary of Fortune, entered into an agreement with POSCO Canada Ltd. and POSCO Klappan Coal Ltd. (POSCAN), a wholly-owned subsidiary of POSCO Canada, to advance the Arctos coal project (the name was changed recently from Mount Klappan project) to production. This would be through an unincorporated joint venture, the Arctos Anthracite Joint Venture (Arctos JV). POSCO Canada’s parent company, POSCO, is based in South Korea and is one of the world’s largest steel producers.
Under the agreement, POSCAN acquired a 20% interest in Arctos. Fortune serves as Manager of the Arctos JV and is compensated, on a recovery basis, for providing operational, technical and administrative support over the life of the project.
Earlier this year, Fortune completed an updated Definitive Feasibility Study (DFS) on the project. The updated DFS was prepared by Marston, a Golder Associates company, and incorporates the results of additional drilling and survey data for the Lost Fox deposit area, which together with updated operating and capital costs, confirms an increase in reserves and robust economics for the Arctos project. The highlights from the 2012 update, compared to a prior 2010 report, include:
- A 17.5% increase in run of mine (ROM) coal reserves to 124.9 million tonnes (Mt) and 13.8% increase in 10% ash product reserves to 69.2 Mt in the Lost Fox deposit area;
- Extension of mine life from 20 to 25 years;
- Production of premium pulverized coal injection coal used to manufacture steel:
- Initial capital (first three years) of C$788.6m for the mine, surface facilities and railway;
- Cash cost freight on board trimmed loading vessel in Prince Rupert of C$127.61/tonne;
- Production expansion case from 3 to 4 million tonnes per annum in year eight of the mine life; and
- Advancing railway connection project with Canadian National Railway Co. and the British Columbia government.
The company said it has engaged environmental, permitting and community and government relation consultants including Stantec, DPRA Canada and Fleishman Hillard, to assist with advancing the Arctos environmental assessment (EA) process and community relations activities. The company said it has continued activities to enhance relationships with key groups, including impacted local communities and First Nations and government regulators. The company has held numerous meetings during the year with the Tahltan, Gitxsan, federal government ministries, regulators, and other interested parties.
Fortune has recruited and hired an Arctos Project Manager who is focused on overseeing Arctos project activities required to advance the project through development. The Project Manager is based at the company’s new Vancouver, British Columbia, regional office to provide greater access to the communities, services and regulators in the region as well as close proximity to POSCAN.