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What was I saying yesterday about coal mines opening up again??

Mining prospects looking up


WENDY STUECK
00:00 EDT Tuesday, April 13, 2004

VANCOUVER -- Rising commodity prices have encouraged several British Columbia producers to consider reopening or expanding their mines and have even raised the possibility of renewed coal production in northeastern B.C.

"It really is starting to turn in the province," said Gary Livingstone, president and chief executive officer of the Mining Association of British Columbia.

"It is happening across the country, but it is particularly positive in B.C.," he said.

The Gibraltar copper mine in British Columbia is expected to swing back into action this summer, resurrected by higher copper prices and hopes for a global economic recovery.

Gibraltar, owned by Vancouver-based Taseko Mines Ltd., opened in 1972, closed in 1993, reopened in 1994 and closed again in 1998.

The shutdowns were the result of poor copper prices. Taseko chief operating officer Tom Milner says the mine is uneconomic when copper prices fall below 95 cents (U.S.) a pound.

Copper for May delivery yesterday fell 1.65 cents to close at $1.29 a pound on the Comex division of the New York Mercantile Exchange. The price of copper has climbed about 80 per cent in the past year.

Mr. Milner said the outlook for copper remains strong, given economic growth in China and elsewhere, and added that Taseko is also studying new refining technology that could reduce its production costs.

Higher prices are also the incentive for renewed interest in coal in northeastern B.C.

Beginning in the early 1980s, the federal and B.C. governments spent millions on infrastructure, including rail lines and a terminal in Prince Rupert, to support the northeast coal project, which included the Quintette and Bullmoose mines and the town of Tumbler Ridge.

The Quintette and Bullmoose coal mines ceased production in 2000 and 2003, respectively. Since late 2003, prices have climbed enough that the region once more looks appealing.

Higher coal prices have also added momentum to a proposal to reopen the former Smoky River Coal operations near Grande Cache, Alta.

"There have been a number of small companies in various stages of development for the last couple of years," said Allen Wright, executive director of the Calgary-based Coal Association of Canada. "Clearly, at the prices we are seeing today, those projects are even more attractive."

Barry Girling, a spokesman for Western Canadian Coal Corp., one of several companies with proposals to mine metallurgical coal in northeastern B.C., says the trend is being driven in large part by China's economic expansion.

China, once a net exporter of coal, is now importing it to meet the county's ravenous steel production needs, pushing up prices on spot and contract markets.

Western Canadian Coal is working on several sites in northeastern B.C., including the Wolverine project, between the Bullmoose and Quintette sites.

Vancouver-based Teck Cominco Ltd., which previously operated both the Bullmoose and Quintette mines, is focusing on expansion opportunities in southeastern B.C., spokesman Tom Merinsky said.

Teck Cominco is a partner in the Elk Valley Coal Partnership, which last month said it would go ahead with development of the Cheviot Creek mine near Hinton.

Taseko shares closed yesterday at $1.98 (Canadian) on the TSX Venture Exchange, down 7 cents, and Western Canadian Coal shares yesterday fell by 3 cents to close at $1.90 on the TSX-VEN. Teck Cominco class B shares closed unchanged at $23.90 on the Toronto Stock Exchange.



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