The coal industry meets in Vancouver today to talk survival in the midst of a deep downturn
At a glance, the Canadian Coal Conference kicking off in Vancouver today looks like any other corporate confab: A golf tournament, a hotel ballroom and a reception at an uptown restaurant are all on the agenda.
However, amid the pleasant trappings Canada’s coal industry will spend the next few days contemplating a frightening present that’s pointing toward an even more uncertain future.
Coal is facing a laundry list of challenges: reduced demand in Asia, prices at decade lows and environmental pressure in North America to stop burning the fossil fuel.
Max Wang is the chief executive of Grande Cache Coal. His company made headlines a year ago when it was sold for just $2 to Up Energy Group, based in China. Wang says that without that new ownership he’s not sure Grande Cache would have survived.
“It has been a very good thing for the company,” Wang said. “They have poured in a lot of money in to sustain the mine right now. Like the whole coal industry, we are in a very deep slump.”
Grande Cache mines metallurgical coal, which is used to make steel. Almost all of Canada’s met coal (as it’s called) is shipped to Asia. The market for met coal is in the midst of a cyclical downturn, where there’s simply too much supply and not enough demand.
“We’re not anywhere near from being out of the woods,” said Joe Aldina, a coal analyst with Wood Mackenzie.
“The overriding message is that it’s going to take time for a rebound in prices, we’re probably a couple of years away from a turnaround.”
The situation is different for thermal coal, which is used to generate power.
Since the election of Rachel Notley’s NDP government in Alberta, there has been increasing talk about reducing Alberta’s dependence on coal. A plan is expected to be released in Alberta’s climate change policy, which is being formulated right now.
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