High-quality coal and house prices: A B.C. town’s second chance – by Brent Jang (Globe and Mail – August 20, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

VANCOUVER — Tumbler Ridge Mayor Darwin Wren predicts that the quality of British Columbia coal will keep his northeastern B.C. community afloat.

In 2001, Mr. Wren moved from Fort Nelson to Tumbler Ridge, where he bought a house for $28,000, just months after the nearby Quintette coal mine closed amid depressed prices for the commodity. Hundreds of houses were auctioned off in the fall of 2000 as the closing of Quintette triggered fears that Tumbler Ridge would turn into a ghost town.

The town persevered, however, as new coal mines opened several years later. Houses like the one Mr. Wren bought 12 years ago are now worth at least $200,000, despite a slump in coal markets since 2011 that has reduced coal production in northeastern British Columbia.

It’s a recurring theme for Canada: Despite efforts to diversify economically, prosperity rises and falls on the back of demand for what miners can pull out of the ground. More often than not, prices for these products find a floor and rebound.

“As a resource-based community, we know that the price of coal will certainly go up and down. But over the long term, we believe that the demand for coal will be there. We know that we have an exceptional quality of coal here,” Mr. Wren said.

Anglo American PLC’s announcement last week that the company will expand its coal operations in the region, requiring investments of $200-million, has helped shore up confidence in Tumbler Ridge. The London-based miner expects the expansion to create 100 new construction jobs, and the larger operation will ensure the jobs of more than 420 workers by extending coal production for 16 years. Anglo American has acquired the 102-room Trend Mountain Hotel in Tumbler Ridge, reserving more than 50 of those rooms for mining staff accommodation.

The prospect that Teck Resources Ltd. could finally revive Quintette through an $860-million re-engineering project helps to bolster sentiment. Separately, Vancouver-based HD Mining International Ltd. is considering plans for a $300-million coal venture. HD forecasts that its Murray River project will have up to six million tonnes a year of coal production and create 600 jobs at the mine site nearly 13 kilometres southeast of Tumbler Ridge. In May, the Federal Court of Canada dismissed a challenge by two unions over HD’s hiring of 201 temporary foreign workers from China to kick-start a preliminary phase that will include extracting bulk samples of coal.
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