The Peace Region’s economy is impacted once again by the global uncertainty that comes with the current trade war.
The Murray River Mine project has been delayed indefinitely because of challenges related to U.S. tariffs.
The former vice-president of HD Mining, Jody Shimkus, is a consultant on the project. She said “the responsible thing to do” was to return the project to Care and Maintenance Status.
The Murray River Mine is located 20 minutes south of Tumbler Ridge. When functional, the mine is expected to produce around 6 million tonnes of metallurgical coal every year for 25 to 31 years.
Shimkus explained that in order for the project to get fully underway, HD Mining needs “global security,” as well as “the price of coal to go up.”
Metallurgical coal, or coking coal, is a key ingredient in steel production. Canada is one of the world’s biggest metallurgical coal producers, alongside Australia, Russia and the United Sates, according to Natural Resources Canada.
In 2022, the price of coking coal peaked above $600 per tonne, the highest in 10 years. It then dropped to a low of $173 per tonne in June of this year and now sits at $187 to end July, according to market data from Barchart.
In 2022, “Coal and other energy commodity prices were heavily affected by the Russian invasion of Ukraine,” explained Natural Resources Canada.
Today, the uncertainty around tariffs not only affects the price of metallurgical coal, but also makes it difficult for HD Mining to bring equipment from the United States to the Murray River Mine.
Another contributing factor for delaying mining activities is the lack of reliable power supply. Other industries in the area have told HD mining that it has been an ongoing issue, but Shimkus said they are working with partners to find a local source of energy. The mine currently runs on diesel, which she says can become costly.
Shimkus added the mine was expecting to employ more than 50 workers, including contractors, but it currently only has five employees.
The project site will continue to be maintained to meet the requirements of their permits, but the company removed all equipment.
Shimkus added the project’s Environmental Assessment Certification (AEC) was set to expire in October of this year, but to obtain an extension, they had to receive a substantial start determination.
She explained the Environment Assessment Office declared that the mine had made a substantial start earlier in March, because HD Mining met all the requirements after completing significant construction to the mine.
Therefore, Shimkus said the company was given a 10-year extension to resume the project without losing their EAC. She added there is no timeline to resume mining operations.