Coalspur board approves development plan for Vista coal mine project

Coalspur Mines Ltd. (ASX: CPL, TSX: CPT) said June 19 that its board has approved the development plan for its Vista coal mine project in Alberta in western Canada.

The development plan for Phase 1 of Vista involves:

  • Constructing and commissioning a six million tonnes per annum (Mtpa) capacity thermal coal facility by mid-2015, with the capability to expand to 12 Mtpa;
  • A development capital cost of C$458m, with a lump sum turn-key contract covering US$221m (approximately C$226m) of this expenditure; and
  • Constructing the 6 Mtpa facility in one stage as opposed to the previously envisaged two stages.

This accelerated development is the result of a modified execution strategy and efficient re-engineering of the materials handling infrastructure and process flowsheet and presents significant savings of about C$197m, the company said. 
This final Phase 1 facility and design is consistent with Coalspur’s regulatory application for Vista Phase 1, which is currently under final review with the Alberta regulators.

President and CEO Gill Winckler said: “We are extremely pleased with the Development Plan that the Board has approved as it significantly enhances shareholder value. Shareholders will benefit from reduced capital requirements and a faster production ramp up than previously contemplated. Furthermore, being able to construct the facility in one stage as opposed to the previously envisaged two stages provides for more effective project execution and delivery.”

He added: “The current downturn in the commodities industry with the associated pressure on commodity prices and service industries afforded us considerable opportunity as we finalised our project execution strategy and capital. This is evident through our capital efficiency of C$76 per tonne of capacity, which is very competitive with comparable thermal coal greenfield and brownfield expansion projects. “

The engineering, procurement and construction (EPC) contractor is Taggart Global, which has an extensive track record in North America in designing, constructing and commissioning coal preparation and material handling plants.

The regulatory approval process is taking longer than anticipated, however the review process is in its final stages and the company said it remains confident that it will be able to commence construction in the coming months and deliver first coal in mid 2015.

The facility will produce three million tonnes of clean coal in 2015 and be capable of producing 6 Mtpa from 2016 onwards. The overland conveyor and train loadout will be constructed with 12 Mtpa capacity in Phase 1 and the coal processing plant will be modular and able to expand to 12 Mtpa.

Among the approvals Coalspur is seeking is from the Canadian Transportation Agency for the construction of a rail siding. CN Rail is advancing these discussions with CTA and a decision is expected in early third quarter 2013. A temporary field authorization was already obtained for the siding and the forest clearing in this area has been completed.

On April 18, the company announced that it had entered into a senior debt facility with EIG Global Energy Partners for up to US$350m. This facility, subject to shareholder approval on June 27 and other conditions, will provide approximately 80% of the total development capital expenditure for Coalspur to construct the Vista Phase 1. Vista Phase 1 is accordingly substantially funded with the company confident of securing the remaining funding over the next nine to twelve months by way of a strategic partner, marketing or off-take related transaction.

Vista covers about 10,000 hectares and provides a large scale, surface mineable, thermal coal project. CN Rail’s main line, located adjacent to Vista, is substantially underutilized and would provide for the transport of coal to deepwater ports on Canada’s west coast, the company said. Coalspur has secured a port allocation agreement with Ridley Terminals Inc., which is essential to the logistics supply chain necessary to export this coal to meet growing demand from Pacific Rim countries, including China, Japan and Korea.

AltaLink works on transmission interconnect for Vista

Transmission provider AltaLink Management Ltd. on June 3 applied with the Alberta Utilities Commission for permits and licenses to provide a transmission interconnect to the Vista mine. That project includes:

  • a proposed 138/25 kV substation to be called Vista Coal 270S Substation (in the Hinton Area);
  • a double‐circuit in/out 138 kV transmission line, to be called 625L/745L, approximately 7 kilometers in 
length connecting the proposed Vista Coal 270S Substation to the existing 745L line; and
  • the required modifications at the existing transmission line 745L to connect the new transmission line 625L/745L.

This project has low overall impacts and mitigates its potential effects by minimizing the length of the line, while paralleling a proposed linear disturbance (Coalspur’s proposed coal conveyor belt) in the Green Area of Alberta, AltaLink noted.

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.