Peat Resources hopes to fuel the Ring of Fire – Resource World Magazine – (May 2010)

Dr. Peter Telford, President/CEO of Peat Resources Ltd. [PET-TSXV] has a question. How can Ontario meet its political commitments and achieve northern economic development, specifically, how to meet the need of the Ring of Fire proponents for reasonably priced power?

His company may have the answer. Peat Resources has identified over 200 million tonnes of fuel-grade peat in northwest Ontario, representing about 22 million tonnes of pellets, enough to supply Ontario Power Generation’s northern generating stations for over 20 years. Peat is considered biomass and is used in electricity generating stations requiring a long-term, assured supply of environmentally friendly, economically competitive and consistently stable, quality fuel.

“Before going into production, we need to do some feasibility work and scale up our pilot plant operations to a full-scale production facility at Upsala, located 130 kilometres northwest of Thunder Bay, Ontario,” explained Telford. “Right now we can process about 25 tonnes per day. The plant was set up to prove up the technology that we are using and provide us with material for marketing and testing purposes.”

Telford said he would like to mine the peat in a less environmentally damaging manner than some other operations in Europe. “We use a wet harvesting system where we remove the upper growing layer for replacement later. We then excavate the peat in its normal water-saturated state, which is about 90% water. The processing plant then takes it down to about 25% moisture and turns that material into pellets,” said Telford. Government-funded research by Lakehead and McMaster universities has confirmed that harvesting peat at Upsala using the wet harvesting system has minimal environmental impact and the harvested peatlands can be rehabilitated as functioning wetlands.

The company is hoping that the Atikokan and Thunder Bay generating stations will use its peat resources. Successful peat fuel trials have been carried out and a 2006 report by the Ontario Ministry of Energy concluded that peat fuel is the most economically viable bioenergy alternative to coal at Atikokan.

The Ontario government has not made its final decision on what fuels to use at Atikokan or Thunder Bay that would replace coal. The cost of generating electricity using peat is about 8 cents/kwh and only a minor retrofit of the station is required.

Telford points out that the Ring of Fire mineral development area is off-grid, so there are “some big questions to answer as to how power will be supplied to the mines,” said Telford. It is possible a chromite processing facility, which may need 400 MW of power, will be built at Thunder Bay. Currently, Thunder Bay generates 300 MW and Atikokan generates 200 MW. The Ontario government will have to decide if power lines will be run into the Ring of Fire region or if companies in that area will have to generate their own electricity.

“We have the peat resource available for either or both scenarios,” said Telford.

Peat Resources also holds extensive peat resources in Newfoundland.