Fortune tangles with Tahltan First Nation over Arctos coal project

Members of the Tahltan First Nation have served Canada’s Fortune Minerals Ltd. with an eviction notice to pack-up a controversial coal project exploration camp situated near ancestral burial grounds, the nation said in an Aug. 16 statement.

“We didn’t fight Shell for ten years so a coal company could come along and build an open pit mine in the heart of the Sacred Headwaters,” said Mary Dennis, a Tahltan elder. “We’ve stopped bigger industrial projects before and we’ll do it again with help from our supporters and allies.”

In July, the Tahltan Central Council (TCC) passed a unanimous resolution to protect the Sacred Headwaters from industrial development. The TCC are the elected representatives of the Tahltan Nation, which governs 5000 members and 93,500 square kilometers of unceded traditional Tahltan territory.

Fortune Minerals has been conducting exploratory work for its Arctos Anthracite Coal Project. The nation said this plan would remove most of Mount Klappan and replace it with a 4,000 hectare open-pit coal mine. The area is adjacent to the Spatsizi wilderness area and is sacred to the Tahltan, who hunt and fish at a camp that has been used for several generations at the foot of the mountain.

“Fortune Minerals couldn’t have picked a worse place to try and build an open-pit coal mine,” said Shannon McPhail, Executive Director of the Skeena Watershed Conservation Coalition. “This project is in the wrong place at the wrong time, and the company should withdraw, rather than angering local communities over a project that will never be built.”

Fortune developing mine in partnership with South Korean steelmaker

During 2011, Fortune 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 Ltd., to advance Arctos to production through an unincorporated joint venture, the Arctos Anthracite Joint Venture (Arctos JV). POSCO Canada Ltd.’s parent company, POSCO, is based in South Korea and is one of the world’s largest steel producers. POSCAN acquired a 20% interest in Arctos.

The Arctos JV partners approved a program and budget focused on advancing Arctos to production as quickly as possible and this program is now underway. The initial budget is focused on engaging with native and other local communities and building stakeholder support for Arctos, securing permits, and conducting additional environmental studies and detailed engineering to support permitting and mine planning, Fortune said in an Aug. 14 financial report.

During the six months ended June 30, the company undertook the following activities as part of the initial program and budget:

  • Submitted a revised project description for the project to the British Columbia Environmental Assessment Office (BCEAO) and the Canadian Environmental Assessment Agency (CEAA). This revised description covers the current development plan that includes extending the Dease Lake railway line in northwest British Columbia by 150 kilometers to the proposed mine along the existing railway roadbed. The mine plan has also been amended to reflect a three million tonne per annum production rate and to include changes to reduce environmental impacts.
  • The BCEAO issued a Section 10 order that determines that the project is reviewable and requires an environmental assessment (EA) to proceed. The BCEAO had also submitted a request to the CEAA for “substitution”, which would streamline the EA process under a single regulatory body in BC, making the EA more efficient with the elimination of unnecessary duplication. On May 31, CEAA granted substitution of the environmental assessment to the BCEAO;
  • Continued environmental, permitting, community and government relations activities to assist with advancing the Arctos EA process and community relations activities. To advance the EA process, the company is currently conducting additional environmental baseline work required, primarily along the rail route and mine site;
  • Continued activities to enhance relationships with key groups, including impacted local communities and First Nations, government regulators and other interested parties;
  • The company said it has held numerous meetings and discussions during the six-month period with representatives from the Tahltan Nation, along with representatives from the Gitxsan Nation;
  • Hired an additional Community Liaison, who will work closely with individuals from the communities surrounding the project to help communicate the company’s plans for the project and to help identify and address any questions or issues raised. In addition, an Environmental Relationships Manager was hired to actively manage the environmental communications aspect of the project;
  • In July, a 32-person field camp was opened at the Arctos site to support the collection of additional environmental baseline information for the EA process. Most of the baseline information for the mine site has already been collected under the EA process for a previous development plan. The 2013 program is focused more on the proposed railway extension and to address gaps and update the mine baseline data to support permitting and detailed engineering design. A Mine Manager was hired early in the second quarter to support the summer camp launch, and will oversee all aspects of the camp operations throughout the summer.

Based on the Arctos Feasibility Study, the funding required to construct both the Lost Fox Mine at Arctos and railway infrastructure was estimated at C$788.6m, which would result in POSCAN making a contribution to the Arctos JV of C$157.7m, or 20%, with Fortune’s contribution being C$630.9m, or 80%. Fortune said it plans to continue discussions with potential debt and equity providers, including potential additional strategic partners, with the aim of achieving a fully financed, permitted project.

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.