Coal
Canadian Minerals Yearbook (CMY) - 2009
Kevin Stone
The author is with the Minerals and Metals Sector,
Natural Resources Canada
Telephone: 613-992-5199
E-mail: kevin.stone@nrcan-rncan.gc.ca
HIGHLIGHTS
- Canada’s coal mining sector plays an important role in the Canadian economy as a provider of about 10% of Canada’s primary energy, as a direct employer of close to 6000 people, and as a contributor of more than $1 billion to Canada’s Gross Domestic Product.
- The global economic crisis affected Canada’s coal production and exports, which declined by about 7% and 15%, respectively, in 2009.
- Since the second half of 2009, global coking coal demand has begun to recover. This has boosted the confidence of coking coal consumers and suppliers. The 2010 first-quarter contract price was settled at US$200/t for hard coking coal, US$170/t for Pulverized Coal Injection (PCI) coal, and US$167/t for semi-soft coking coal.
- Canada’s coal industry has made significant improvements in reducing greenhouse gas emissions and Canada has become the world’s leading expert on carbon capture and storage (CCS). Three large-scale CCS demonstration projects, funded by both private and public sectors, are currently under way in Canada.
INTRODUCTION
Coal is an organically derived material. It is formed from the remains of decayed plant material compacted into a solid through millions of years of chemical changes under pressure and heat. As the organic maturity process continues, the buried plant material is transformed into different types of coal. In general, the longer the coal is subjected to heat and pressure, the higher its grade and contained heat volume will be per unit weight. Bituminous coal and anthracite are high-ranked coals, also known as hard coal. Bituminous coal is consumed for both metallurgical and thermal purposes. Premium-grade bituminous coal, often referred to as metallurgical coal or coking coal, is used to produce coke, which is a key ingredient in iron and steel-making. Anthracite, the highest ranked coal, is often called “smokeless” and can be consumed by households as a fuel for heating and cooking, and by various industries. Lignite and subbituminous coal are low-ranked coals, also known as brown coals, consumed only for the generation of electricity.
Coal is the world’s most abundant and widely distributed fossil fuel. According to Coal Information, the annual publication of the International Energy Agency, the world’s total proven recoverable coal reserves are 935 billion t spread over more than 70 countries. At its current production rate, coal will offer more than 149 years of supply, which is significantly longer than known reserves of oil and gas. Coal is an economical energy source compared to oil and gas.
Coal has been consumed as an energy source for hundreds of years. It provided the energy that boosted the industrial revolution of the 19th century and launched the electric era in the 20th century. It was the most important source of the world’s primary energy until the late 1960s when it was overtaken by oil. Today, close to 90% of the world’s total coal production is consumed as steam coal. The majority of steam coal is used to generate electricity and a small portion is used as a fuel for heat or steam, such as for residential building heating; for the cement, pulp and paper, and other industries; and for the agriculture and transportation sectors. Coal-fired power generation currently provides more than 40% of the world’s total electricity and accounts for 15.5% of Canada’s total electrical needs. About 10% of global coal production is transformed into coke and used in iron and steel-making. Almost all primary steel production worldwide is based on pig iron from blast furnaces fed with coke from coal and iron ore.
According to the International Energy Agency, the world’s total coal production was 6797 Mt in 2008, including 5845 Mt of hard coal and 951 Mt of brown coal (subbituminous and lignite). Total world coal production increased by 6.2% from 2007. Total global coal consumption was 4864 Mt of coal equivalent,1 an increase of 6.8% from 2007 (4554 Mt of coal equivalent). Global coal consumption has risen for the last six years with an average annual increase of 6.3%.
Canada’s coal mining sector plays an important role in the Canadian economy as a provider of about 10% of the country’s primary energy, as a direct employer of close to 6000 people and the creator of many more indirect jobs across the country, and as a contributor of more than $1 billion to Canada’s Gross Domestic Product.
Canada holds 8.7 billion t of proven coal reserves, including 6.6 billion t of proven recoverable coal reserves, which will provide more than 100 years of production at the current production rate. In addition, about 193 billion t of coal resources have been identified.
In 2009, there were 22 operating coal mines in Canada. Most large-scale coal mines are located in western Canada. Ten coal mines are in British Columbia (B.C.), of which nine were operating and one was idled in 2009. The operating mines are Brule, Coal Mountain, Elkview, Fording River, Greenhills, Line Creek, Quinsam, Trend, and Perry Creek (Wolverine). The Willow Creek mine was idled. Alberta is home to nine operating coal mines: Cheviot, Coal Valley, Genesee, Grande Cache, Highvale, Obed Mountain, Paintearth, Sheerness, and Whitewood. Saskatchewan has three mines in operations: Bienfait, Boundary Dam, and Poplar River. The Minto mine is the only operating mine in New Brunswick.
Four companies produce metallurgical (coking) coal or PCI coal for export: Teck Resources Ltd. (Teck) with six mines, Western Coal Corp. (WCC) with three mines, Grande Cache Coal Corp. (GCC), and Peace River Coal Inc. (PRC).2 Two companies produce bituminous thermal coal for export: Sherritt International Corp. (Sherritt) with two mines and Hillsborough Resources Ltd. (Hillsborough) with one mine. Sherritt operates eight mines producing subbituminous and lignite coal for domestic coal-fired power generation. NB Coal operates one mine producing bituminous coal for coal-fired power generation (Table 6).
Coal is one of the top dry bulk commodities hauled by rail and handled by ports in Canada. About 30 Mt of coal were hauled by rail and approximately 40 Mt of coal were handled by ports in 2009.
CANADIAN DEVELOPMENTS
Sherritt re-started its Obed Mountain operations in Alberta in the third quarter of 2009. Obed Mountain produces bituminous-grade thermal coal and its output is destined for export.
Teck sold 17.2% of its shares to China Investment Corp. (CIC) for $1.7 billion on July 3, 2009. In addition, Nippon Steel of Japan and POSSO of Korea each have a 2.5% interest in Teck’s Elkview mine, and POSCO owns a 20% interest in Teck’s Greenhills mine.
WCC, formerly the Western Canadian Coal Corporation, acquired Cambrian Mining plc of the United Kingdom in July 2009. With the acquisition, WCC has coal businesses in the United States and U.K., in addition to its operations in northeastern B.C. WCC currently operates two coal mines in Canada, two in the United States, and one in the U.K. The company plans to re-start the Willow Creek coal mine in the second half of 2010. In its operations plan announced in March 2010, WCC plans to increase coal production to 3.7 Mt of coking coal in Canada and 0.8 Mt of coking coal and 1.3 t of thermal coal in the United States and U.K. in the next fiscal year (April 2010-March 2011).
GCC received regulatory approvals to proceed with the development of its new No. 8 surface mine in December 2009. The company plans to commence coal production in the second quarter of 2010. Currently, GCC produces coal from the No. 12 South B2 open-cut surface mine and the No. 7-4 underground mine. All production is in the form of coking coal for export and the production capacity is about 2 Mt/y. GCC intends to increase its production to 3 Mt/y within the next three years with the development of the No. 8 mine.
Hillsborough sold the Crossville coal mine in the United States in March 2009. The company was later acquired (in December 2009) by Vitol Anker International B.V., a member of the Vitol Group of Switzerland. Hillsborough operates the Quinsam underground mine in Campbell River, B.C., which has a production capacity of 500 000 t/y. More than half of the thermal coal produced at Quinsam is sold to the Vitol Group.
Xstrata announced plans to start developing the Donkin underground mine in Nova Scotia in February 2010. The plan is to produce 2.7 Mt/y of coking coal for export. A wash plant will be constructed and production will be barged to loading facilities for export. The mine life is expected to be between 20 and 30 years. Xstrata Plc owns 75% of Donkin Coal Limited and Erdene Gold owns the remaining 25%.
In British Columbia, a new project, the Raven underground coal mine, has been proposed by Compliance Energy Corporation (CEC). CEC has submitted its environmental assessment study to the B.C. Environmental Assessment Office. CEC, Itochu Corp. of Japan, and LG International Corp. of Korea formed a joint venture in February 2009 to develop the Raven project. CEC holds a 60% interest while the other two partners each hold 20%. The project is located in the Comox Coal Basin on Vancouver Island. The proposed project would produce coking coal for export. The joint venture is proposing clean coking coal production at 1.5 Mt/y with a mine life of 20 years.
Coal mining in New Brunswick came to an end in December 2009 when the Minto mine closed due to the scheduled permanent closure of the aging Grand Lake power station in June 2010. The power station was the only customer for the Minto coal mine.
In September 2009, Ontario Power Generation (OPG) announced that it will close two of its eight coal-burning units at the Nanticoke station near Simcoe and two of its four units at the Lambton plant near Sarnia by October 2010. OPG closed the Lakeview Generating Station in Toronto in 2005. Once the four units are taken off-line, Ontario will have reduced its total coal-burning capacity by 40%. The latest scheduled closures will put the province ahead of schedule in meeting its December 31, 2014, target to permanently shut down all of its coal-fired stations.
PRODUCTION
The worldwide economic crisis affected Canadian coal production, particularly coking coal production, due to lower global demand for iron and steel. Preliminary figures indicate that Canada produced 63 Mt of coal in 2009, a 7.7% decrease from the 67.8 Mt produced in 2008. This decline was forecast by Natural Resources Canada (NRCan), who indicated that coal production was “expected to decrease by 5 Mt” in 2009. The NRCan forecast also indicated that the decline would mainly relate to coking coal and that steam coal production would remain stable. About 22 Mt of coking coal were produced in 2009, a decline of 5 Mt compared to the 27 Mt produced in 2008. Steam coal production remained the same at about 41 Mt.
All of Canada’s coking coal production was exported in 2009. Approximately 6 Mt of bituminous steam coal were exported while 35 Mt of steam coal were used for domestic coal-fired power generation. Most of the output in the coking coal category was hard coking coal and only a small portion was PCI coal. The majority of the steam coal produced was subbituminous and lignite coal; only 10% was bituminous-grade.
Alberta produced 31 Mt of coal in 2009, down slightly from 31.6 Mt in 2008. B.C. produced 21 Mt, a decline of 4.7 Mt from 26.2 Mt in 2008. Saskatchewan produced 10.4 Mt, an increase of 500 000 t from the 9.9 Mt produced in 2008. New Brunswick produced 161 000 t while Nova Scotia did not report any coal production.
CONSUMPTION
Canada consumed some 58.4 Mt of coal in 2008. The largest amount was used by the 21 coal-fired power generation plants, which together used 51.4 Mt of coal in 2008. About 4.3 Mt of coking coal were transformed into coke to be used in the steel industry. Industrial energy and non-energy uses accounted for 2.5 Mt. Of the total amount consumed, 38 Mt were sourced domestically and 22 Mt were imported.
Alberta, Canada’s largest coal-consuming province, consumed 27.4 Mt of coal in 2008. Almost all of this coal was used for coal-fired power generation, which produced about 66% of the electricity supply in the province. Alberta accounted for 47% of Canada’s total coal consumption and for 53% of its total coal-fired power generation.
Ontario is the second largest coal-consuming province. In 2008, Ontario consumed 15.8 Mt of coal, including 11 Mt for coal-fired power generation, 4.3 Mt for coke production, and about 600 000 t for various industrial and non-energy uses. Coal-fired power generation provided about 16% of the province’s electricity in 2008. Ontario’s coal consumption is declining as the province’s policy to phase out all coal-fired power generation by December 31, 2014, continues to be implemented.
Saskatchewan consumed 9.5 Mt of coal in 2008. Of that total, 9.2 Mt was lignite coal used for coal-fired power generation, providing about 60% of the province’s electricity supply.
Nova Scotia consumed 3 Mt of coal in 2008. Almost all of this consumption was used in coal-fired electric power generation, which provided about 56% of the province’s electricity. New Brunswick consumed 1.1 Mt in 2008, all for coal-fired electric power generation. Quebec consumed 843 000 t in 2008 for energy and industrial purposes. B.C. consumed 714 000 t of coal in 2008 for energy and industrial purposes. Manitoba consumed 300 000 t in 2008, most of it (233 000 t) for electricity generation with a limited amount used for industrial purposes.
INTERNATIONAL TRADE
Canada exported approximately 27 Mt of coal in 2009, a decline of 15% from 32 Mt in 2008. Canada is one of the leading seaborne hard coking coal suppliers to world markets and almost all of the coking coal produced in western Canada is destined for offshore markets. In 2009, Canada exported 21.1 Mt of coking coal and 6 Mt of steam coal. Coking coal exports declined 5.4 Mt, or by 20%, from 2008’s level due to weaker demand in global markets. However, Canada’s steam coal exports increased slightly to 6 Mt in 2009 from 5.7 Mt in 2008.
Asia was Canada’s largest coal trading partner, accounting for 79% of its total exports in 2009. Europe and the Middle East was the second largest trading partner, accounting for 13%. The remainder went to the Americas, accounting for 8%.
About 80% of Canada’s seaborne coal exports was shipped through coal terminals in Vancouver while the rest was shipped through the Ridley Terminals in Prince Rupert in northern B.C.
Canada imported 12.7 Mt of coal in 2009 of which 10.5 Mt was steam coal to be used in coal-fired power generation and 2.2 Mt was coking coal to be used in coke manufacturing. The United States supplied 7.7 Mt and the other 5 Mt came from Colombia, Indonesia, the United Kingdom, Russia, Ukraine, and Venezuela.
PRICES
Most of Canada’s coking coal was traded on an annual contract basis. Canadian coking coal producers settled the 2009 coal year3 contract price at about US$130/t in early 2009. This was significantly lower than the 2008 price of US$300/t.
Based on Canadian Customs records, the average achieved coking coal export price was C$202/t f.o.b. for the 2009 calendar year. This price was much higher than the contract price settled at the beginning of the year. Various factors may explain the difference, including strong coal demand from China in the second half of the year and the fact that Canadian producers received a premium on top of the annual contract price. In addition, the Customs recorded price covers a calendar year that included the value recorded in the first quarter of 2009 under 2008's contracts. The carried-over high contract price in the first quarter also partly contributed to the higher average achieved export value in 2009.
Canada’s steam coal exports increased to 6 Mt in 2009. Preliminary Customs records indicated that the average achieved price for steam coal (all types) was C$96/t f.o.b. for the 2009 calendar year.
Canada imports both coking and thermal coal. Most of the coking coal went to Ontario. The average price for imported coking coal was C$108/t in 2009. Thermal coal was imported into Ontario, Nova Scotia, and New Brunswick. The average price for imported thermal coal was C$77/t in 2009.
The majority of domestically sourced coal was from so-called “mine-mouth” operations, which involve extracting coal from a mine site and then trucking it to adjacent coal-fired power generation plants to produce electricity. The majority of mining and power generation operators are engaged in long-term contracts. Sherritt, the largest thermal coal producer in Canada, reported an average realized price of $14.56/t in 2009. However, this price is merely a reflection of the cost of mining coal and cannot be regarded as the prevailing market price.
In 2010, major global coking coal exporters and importers might switch to short-term pricing, likely on a quarterly basis. The Canadian producers have settled contract prices for hard coking coal at US$200/t f.o.b. and for PCI coal at US$170/t f.o.b. for the first quarter (April 1-June30) of the 2010 coal year.
PROJECT DEVELOPMENTS
Eight proposed coal projects are currently active and waiting for environmental assessment approval from the B.C. and Alberta governments.
CEC submitted an environmental assessment for the Raven underground mine to the B.C. Environmental Assessment Office. The CEC-led joint venture is proposing a clean coking coal operation with a production capacity of 1.5 Mt/y and a mine life of 20 years.
PRC applied for an environmental assessment on its Roman coal mine in September 2007. The company proposed to develop a new open-pit coal mine with a production capacity of 2-4 Mt/y and a mine life of 15 years. The proposed mine is located 25 km south of Tumbler Ridge, B.C.
Dehua International Mines Group Inc. applied for an environmental assessment for its Gething coal mine project in November 2006. The project is located in northeastern B.C., 25 km northwest of Henderson’s Hope. The company proposed to construct an underground mine and coal preparation plant. The mine is projected to produce 2 Mt/y of coking coal over a 40-year mine life.
Cline Mining Corp. submitted an application for an environmental assessment for its Lodgepole mine project in January 2006. The project is located in the Crowsnest Coalfield of southeastern B.C., and the company is planning to produce 2 Mt/y of coking coal for export.
An application for an environmental assessment for the Horizon mine project was originally submitted by Hillsborough Resources Limited in September 2005. The project is now owned by PRC. It is located near the closed Quintette and Bullmoose mines in B.C. Planned production for the project is 1.6 Mt/y of coking coal.
Fortune Minerals Ltd. applied for an environmental assessment for its Mount Klappan mine project in October 2004. The project is located 160 km northeast of Stewart in northern B.C. It includes an open-pit mine and a preparation plant with anticipated production of 1.5 Mt/y of anthracite coal.
Sherritt and the Ontario Teachers’ Pension Plan applied for an environmental assessment for a coal gasification project in early January 2007. The Dodds-Roundhill gasification project is located 80 km southeast of Edmonton, Alberta. The $1.5 billion project will be the first commercial application of coal gasification technology in Canada. The proposed project involves mining subbituminous coal and processing it into gas. Production will begin in 2011 and the project will reach its designed capacity of 320 million cubic feet per day of synthetic gas by 2012. Coal reserves and resources are estimated at 320 Mt in the project area and a 40-year mine life is expected.
Alter NRG Corp. applied to the Alberta Ministry of the Environment for an environmental assessment of its proposed Fox Creek coal gasification project. The project is proposing to develop a surface coal mine and coal gasification plant. The surface mine will produce 9.2 Mt/y of coal for the gasification plant, which will convert coal to liquid at about 40 000 barrels per day of diesel fuel and naphtha for about 50 years. The project is located 27 km northeast of Fox Creek, which is about 240 km northwest of Edmonton.
ENVIRONMENT
The Government of Canada is committed to reducing Canada's total greenhouse gas emissions by 17% from 2005 levels by 2020 and by 60-70% by 2050.
Canada, at both the federal and provincial levels, is focusing on technology development and deployment to meet the targets. Since 2008, Canada has spent and committed approximately $11 billion in support of clean energy and technology investments. A significant portion of Canada's economic stimulus spending in 2009 was focused on developing, demonstrating, and deploying clean energy technologies.
Canada's federal and provincial governments have committed a total of approximately $3 billion in funding for carbon capture and storage (CCS), including the Clean Energy Fund, which will support at least three large-scale CCS demonstration projects in Canada.
Shell Canada Energy’s Quest project will be the world's first fully integrated CCS project. The project, once completed, will capture, transport, inject, and store CO2. Over 1.1 Mt of CO2 per year will be captured from the Scotford upgrader, transported by a pipeline to an injection location northeast of the Scotford complex, and stored safely and permanently more than 2 km underground under thick layers of impermeable rocks. The CO2 could also be made available for use in enhanced oil recovery projects. This project is a private-public partnership between industry and the provincial and federal governments. Shell will invest $480 million, the Government of Alberta is investing $745 million through its $2 billion CCS Fund established in 2008, and the Government of Canada will contribute $120 million through the Clean Energy Fund. The total cost of the project will be $81.3 billion.
The second CCS demonstration project is the TransAlta project, which involves the development of a large-scale CCS system attached to the Keephills 3 coal-fired power plant in Alberta. It is estimated that up to 1.4 Mt of CO2 emissions will be captured and stored annually in wells 2.8 km deep below the surface near the plant. This would be one of the world’s first large-scale CCS facilities and it will perform several technological functions. It would integrate leading-edge, post-combustion, chilled ammonia capture technology with a coal-fired power plant to capture CO2. The CO2 would then be transported for use in enhanced oil recovery and to a permanent geological storage site. The goal is to demonstrate safe, secure, large-scale permanent storage of CO2 in saline aquifers. This project will also be carried out in a private-public partnership between industry and the provincial and federal governments. TransAlta will provide over $300 million, the Alberta government is investing $436 million from its CCS Fund, and the Government of Canada will contribute $342.8 million to the project. The total cost of the project will be over $1.1 billion.
The third project, led by Enhance Energy, includes a fully integrated CCS system incorporating gasification, capture of CO2 emissions, transportation, storage, and enhanced oil recovery (EOR). Enhance Energy will partner with North West Upgrading for the project. Enhance Energy will provide CO2 gathering and distribution infrastructure for the cost-effective management of CO2 emissions from facilities throughout central Alberta. The captured CO2 from these sites will be transported via a 240-km pipeline to mature oil reservoirs in central and southern Alberta where it will be injected for enhanced oil recovery purposes. At full capacity, the project will transport and store 14.6 Mt of CO2 annually. The oil and gas reservoirs accessed by the project could have the capacity to store up to 2 billion t of CO2, providing a much-needed solution for emissions related to power plants and to Alberta’s petrochemical industries and refining facilities. Again, this project will be a private-public partnership between industry and the provincial and federal governments. Enhance Energy will provide $590 million, the Alberta government will invest $495 million, and the Government of Canada will contribute $63 million to the project. The total cost will be $1.2 billion.
Canada is also actively engaged in the Asia-Pacific Partnership on Clean Development and Climate (APP). The APP is a public-private partnership of seven countries: Australia, Canada, China, India, Japan, South Korea, and the United States; it seeks to accelerate the development and deployment of clean energy technologies. The seven partner countries collectively represent approximately 45% of the world's population, 49% of GDP, and 50% of global emissions of CO2 from combustion sources. The partners also produce approximately 70% of the world's coal and more than 60% of its steel. The purpose of the APP is to create a voluntary, non-legally binding framework for international cooperation to facilitate the development, diffusion, deployment, and transfer of existing, emerging, and longer-term cost-effective and cleaner technologies and practices among the partners. Canada’s coal sector is actively engaged in a number of various coal-related projects associated with cleaner fossil energy and power generation and transmission. Both the private and public sectors are working together in an effort to reduce CO2 emission.
Canadian coal companies have worked hard to improve their environmental performance. For instance, a number of coal mining companies have been recognized for their successful environmental management programs. Multiple awards for mine reclamation and rehabilitation have also been given to coal mines across Canada. Sherritt, in its 2008 Corporate Social Responsibility Report, reported in 2008 that it had reclaimed 80% of all of the land disturbed by its coal operations in Alberta and Saskatchewan.
EPCOR and Sherritt Coal received the 2009 Alberta Chamber of Resources’ Major Reclamation Award in February 2009 for their environmental work at the Genesee mine. EPCOR and Sherritt Coal reclaimed and rehabilitated 600 ha of land, turning it into productive farm land and wildlife habitat. The Alberta Ministry of the Environment nominated the Genesee mine for the environmental award.
Fording River Operations received the British Columbia 2007 Mining and Sustainability Award for its ongoing commitment to the environment, safety, and the community. The B.C. government stated that “Fording River Operations is a leader in mining reclamation and is working hard to ensure that mining leaves a very small footprint on the land, protecting water and wildlife in the Elkford, Fernie and Sparwood communities.” Fording River Operations was a three-time winner of the British Columbia Jake McDonald Mine Reclamation Award for outstanding reclamation achievements in 2005, 1992, and 1979.
The Cardinal River mine in Alberta is adjacent to protected areas (Whitehorse Wildland Park and Jasper National Park) and the company is working with the local community to ensure responsible care and protection of these lands. The Cardinal River Operations received the 2006 Alberta Chamber of Resources Major Reclamation Award for its reclamation efforts in the Sphinx Creek mining area near Cadomin. The work involved the creation of fish habitat in an end pit lake and wildlife habitat through the re-vegetation of the surrounding area. The Alberta Ministry of the Environment selected it as the project that best represented the values and principles of the sustainable land use and reclamation achievement.
OUTLOOK
Despite the slow economic recovery, global coal demand and supply is expected to continue to grow. The International Energy Agency reported that global coal consumption has steadily increased at an average annual growth rate of 6.3% from 2008 to 2009. Global coal production has trended upwards since 1998. Total global coal production increased by 59% between 1998 and 2009. This increase was driven largely by increasing demand for energy, particularly in the developing world. Increased oil and gas prices and volatilities in energy availabilities in recent years have also contributed to increased coal use.
Prior to the global economic crisis, global demand for coking coal had exceeded supply as global steel mills were operating at capacity. This was not the situation in 2009 as demand for steel declined followed by steel production. However, global coking coal demand started to recover in the second half of 2009 and is expected to continue to recover in 2010. It is expected that coking coal demand and supply will be balanced in 2010 as the economies of most industrialized nations are still struggling. Increased Chinese demand may boost overall global demand for coal and coking coal. China imported 51 Mt of coal in 2007. Chinese imports decreased to 41 Mt in 2008, but increased to 127 Mt in 2009, a significant jump of 210%. For coking coal, China imported 6.2 Mt in 2007, 6.9 Mt in 2008, and 34.5 Mt in 2009, a fivefold increase.
General concern over of the extent of the global economic recovery has affected contract pricing as major coking coal importers and exporters are increasingly adopting a quarterly rather than annual contract price. In March, major importers from Japan and major suppliers from Australia and Canada settled the contract price for hard coking coal at US$200/t f.o.b. ports for the first-quarter 2010 coal year (April 1-June 30), US$170/t f.o.b. ports for PCI coal, and US$167/t f.o.b. ports for semi-soft coking coal.
Over the medium term, global demand for coking coal will continue to increase with the full recovery of the global economy. It is expected that Canadian coking coal production and exports will return to their 2007-08 levels of about 27-28 Mt. Canada’s total coal production will likely return to a level of 60-70 Mt in 2010. Steam coal production should remain stable as most of the steam coal is destined for domestic coal-fired electricity generation plants.
CANADIAN COAL COMPANIES’ WEB SITES
The Coal Association of Canada
www.coal.ca
Teck Resources Ltd.
www.teck.ca
Sherritt International Corp.
www.sherritt.com
Western Coal Corp.
www.westerncoal.com
Grande Cache Coal Corp.
www.gccoal.com
Peace River Coal Inc.
www.peacerivercoal.com
ENDNOTES
1 The term “total coal” refers to the sum of hard coal and brown coal after conversion to a common energy unit (tonnes of coal equivalent). The conversion is done by multiplying the calorific value of the coal in question by the total volume of hard coal and brown coal used, measured in physical units, i.e., in tonnes. The energy content of one tonne of coal equivalent is 29.3 gigajoules, or 7000 kilocalories, and corresponds to 0.7 tonnes of oil equivalent.
2 Peace River Coal Limited Partnership is a partnership between Anglo Coal Canada (74.83%), Hillsborough (12.99%), and NEMI (12.18%).
3 The coal year starts from April 1 of the current year and ends on March 31 of the next calendar year.
Notes: (1) For definitions and valuation of mineral production, shipments and trade, please refer to the chapter entitled “Definitions and Valuation: Mineral Production, Shipments, and Trade.” (2) Information in this review was current as of March 31, 2010. (3) This and other reviews, including previous editions, are available on the Internet at www.nrcan-rncan.gc.ca/mms-smm/busi-indu/cmy-amc/com-eng.htm.
Note to Readers
The intent of this document is to provide general information and to elicit discussion. It is not intended as a reference, guide or suggestion to be used in trading, investment, or other commercial activities. The author and Natural Resources Canada make no warranty of any kind with respect to the content and accept no liability, either incidental, consequential, financial or otherwise, arising from the use of this document.
Figure 1
Principal Canadian Coal Mines and Ports
Numbers and letters refer to locations on map above.
MINES
British Columbia
1. Brule
2. Willow Creek
3. Perry Creek
4. Trend
5. Quinsam
6. Fording River
7. Greenhills
8. Elkview
9. Line Creek
10. Coal Mountain
Alberta
1. Grande Cache
2. Obed Mountain
3. Cheviot Creek
4. Coal Valley
5. Highvale
6. Whitewood
7. Genesee
8. Paintearth
9. Sheerness
Saskatchewan
1. Poplar River
2. Boundary Dam
3. Bienfait
New Brunswick
1. Minto
Nova Scotia
1. Stellarton
PORTS
British Columbia
A. Ridley
B. Neptune
C. Westshore
Ontario
D. Thunder Bay
Nova Scotia
E. International Pier
Figure 2
Canadian Coal Production, 1999-2009
Sources: Natural Resources Canada; Statistics Canada.
Figure 3
Canadian Coal Exports, 1999-2009
Sources: Natural Resources Canada; Statistics Canada.
| Item No. | Description | Canada | United States | EU | Japan | ||
|---|---|---|---|---|---|---|---|
| MFN | GPT | USA | Canada |
Conventional Rate (1) |
WTO (2) | ||
| 27.01 | Coal; briquettes, ovoids and similar solid fuels manufactured from coal | ||||||
| 2701.11 | Coal, whether or not pulverized, but not agglomerated: anthracite | Free | Free | Free | Free | Free | Free |
| 2701.12 | Coal, whether or not pulverized, but not agglomerated: bituminous coal | Free | Free | Free | Free | Free | Free |
| 2701.19 | Coal, whether or not pulverized, but not agglomerated: other coal | Free | Free | Free | Free | Free | Free |
| 2701.20 | Briquettes, ovoids and similar solid fuels manufactured from coal | Free | Free | Free | Free | Free | 3.9% |
| 27.02 | Lignite, whether or not agglomerated, excluding jet | ||||||
| 2702.10 | Lignite, whether or not pulverized, but not agglomerated | Free | Free | Free | Free | Free | Free |
| 2702.20 | Agglomerated lignite | Free | Free | Free | Free | Free | Free |
| 27.04 | Coke and semi-coke of coal, of lignite or of peat, whether or not agglomerated; retort carbon | Free | Free | Free | Free | Free | Free-3.2% |
| 27.05 | Coal gas, water gas, producer gas and similar gases, other than petroleum gases and other gaseous hydrocarbons | Free | Free | Free | Free | Free | Free |
| 27.06 | Tar distilled from coal, from lignite or from peat, and other mineral tars, whether or not dehydrated or partially distilled, including reconstituted tars | Free | Free | Free | Free | Free | Free |
| 27.08 | Pitch and pitch coke, obtained from coal tar or from other mineral tars | ||||||
| 2708.10 | Pitch | Free | Free | Free | Free | Free | Free |
| 2708.20 | Pitch coke | Free | Free | Free | Free | Free | Free |
| 2712.90.90.20 | Petroleum jelly; paraffin wax, micro-crystalline petroleum wax, slack wax, ozokerite, lignite wax, peat wax, other mineral waxes, and similar products obtained by synthesis or by other processes, whether or not coloured: other: other: lignite (montan) wax | Free | Free | Free | Free | 2.2% | 2.7% |
| 28.03 | Carbon (carbon blacks and other forms of carbon not elsewhere specified or included) | Free | Free | Free | Free | Free | 3.9% |
Sources: Canadian Customs Tariff, effective January 2010, Canada Border Services Agency; Harmonized Tariff Schedule of the United States, 2010; Official Journal of the European Union (Tariff Information), October 31, 2009 edition; Customs Tariff Schedules of Japan, 2010.
GPT General Preferential Tariff; MFN Most Favoured Nation; WTO World Trade Organization.
(1) The customs duties applicable to imported goods originating in countries that are Contracting Parties to the General Agreement on Tariffs and Trade or with which the European Community has concluded agreements containing the most-favoured-nation tariff clause shall be the conventional duties shown in column 3 of the Schedule of Duties. (2) WTO rate is shown; lower tariff rates may apply circumstantially.
Sources: Natural Resources Canada; Statistics Canada.
– Nil; . . Not available; . . . Amount too small to be expressed; n.e.s. Not elsewhere specified; (p) Preliminary; x Confidential.
Note: Numbers may not add to totals due to rounding.
Sources: Natural Resources Canada; Statistics Canada.
– Nil; (p) Preliminary.
Note: Numbers may not add to totals due to rounding.
Sources: Natural Resources Canada; Statistics Canada.
(p) Preliminary; (r) Revised; x Confidential.
(a) Saskatchewan Bureau of Statistics, Monthly Statistical Review.
Sources: Natural Resources Canada, Statistics Canada.
(e) Estimated; (r) Revised.
Sources: Natural Resources Canada; Statistics Canada.
(p) Preliminary; (r) Revised.
(1) Metallurgical includes Harmonized System code numbers 2701.12.00.11 and 2701.12.00.12 for imports and 2701.12 and 2701.12.10 for exports. (2) Steam includes Harmonized System code numbers 2701.11, 2701.19, 2701.12.00.91, 2701.12.00.92, 2701.12.00.99, 2701.20, 2702.10 and 2702.20 for imports and 2701.11, 2701.12.90, 2701.19, 2701.20, 2702.10 and 2702.20 for exports.
Notes: Includes domestic exports only. Numbers may not add to totals due to rounding.
Source: Natural Resources Canada.
n.a. Not available.
Sources: Natural Resources Canada; International Energy Agency.