The future of Walter Energy Canada’s three coal mines around Tumbler Ridge and Chetwynd will unfold in the coming weeks as the company and its court-appointed monitor auction off the mothballed facilities.
Since March, potential bidders have been looking over the mine’s specifications and company documents in a room in Vancouver (the company isn’t saying who or how many). The deadline to submit bids was May 27.
With the market for the steelmaking coal that the mines produces still oversupplied, the question remains: Who would buy the mines? And for Tumbler Ridge, the community most deeply affected by their shutdown, what is the likelihood they’ll start up soon?
“There is definitely inventory (of coal mines) on the market, and quite a bit of it,” said Michelle Grant, the practice leader for mining and metals transactions for the consulting firm EY in Vancouver.
Grant estimates some 50 companies have gone into bankruptcy protection in recent years, including Alabama-headquartered Walter Energy, which entered Chapter 11 bankruptcy in the U.S. last summer, followed by its Canadian operations, which sought protection under the Companies’ Creditors Arrangement Act.
Mines have been selling, Grant said, but at prices facilities far from the highs paid during mining’s boom, such as Walter’s $3.3-billion 2010 takeover of B.C.-based Western Coal, which gave it the three mines around Tumbler Ridge.
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