Fluorspar mining set to return to Newfoundland

As part of a $49-million plan to reactivate the St. Lawrence fluorspar mine on the Burin Peninsula of southeastern Newfoundland, the provincial government has pledged to build a $10-million deep-water port at the town of St. Lawrence.

The project is being spearheaded by a wholly owned subsidiary of an Alberta-based private company, Burin Fluorspar, whose controlling shareholder and chairman is Gordon Stollery.

Burin proposes to reactivate and expand St. Lawrence’s existing mine and milling operations to produce 180,000 tonnes of acid-grade fluorspar annually for North American and European markets.

While Burin’s current mining plan envisages exploiting two vein deposits, named Blue Beach North and Tarefare, the company expects it can develop additional reserves to maintain production beyond 15 years. The rejuvenated operations are expected to create about 200 long-term jobs in the St. Lawrence area.

For its contribution, the government of Newfoundland and Labrador will expand the capacity of an existing port at St. Lawrence to 45,000 from 6,000 tonnes, and then lease the facility to Burin. Prior to the government’s investment, Burin must produce a positive bankable feasibility study and secure about $38.5 million in financing.

Says Burin President Alex Harris: “The town of St. Lawrence has been very supportive and the local union has worked closely with us, particularly in trying to get this critical government assistance. Without the deep-water port, we had a marginal project; with it, we have a viable one.”

Potentially, full fluorspar production could begin at St. Lawrence in 2001 — first at the Blue Beach North deposit, using an existing decline, and then in the ninth year of operations at the Tarefare deposit, using an existing, 1,450-ft.-deep, 60-ft.-wide, concrete-lined shaft.

The company is privately securing $2.5 million for a feasibility study, which will include a 22,000-metre drilling campaign and metallurgical tests. Faced with the task of raising Burin’s $39-million share of the required capital, Harris says it is “likely, but not essential” that the company will seek a public listing.

While the current project appears to have a promising future, fluorspar mining at St. Lawrence has a checkered past. The original owner, Alcan, first opened the St. Lawrence mine in the late 1950s, only to discover in 1959 that radon (a heavy radioactive gas) was seeping from the surrounding granite into the underground workings. The company solved the problem using proper ventilation in 1960, but by that time some 400 employees had been exposed to unsafe levels of radiation.

Provoked by low Fluorspar prices and nagging labor problems, Alcan closed the mine in 1977, and the company was still settling liability claims relating to radon exposure well into the mid-1980s.

“The claims were taken to extremes by the local Workers’ Compensation Board and others,” says Harris. “They changed the rules such that any incidence of cancer among a worker at St. Lawrence was deemed to be compensable — if a secretary at the office got breast cancer, that was covered by workers’ compensation.”

With the provincial government contributing money for a mill, the St. Lawrence mine was reopened briefly in the late 1980s by the private British firm Minworth. In early 1991, both Minworth and its Newfoundland subsidiary slid into receivership and the assets were returned to the provincial government.

Heeding the province’s subsequent call for development proposals, Burin entered the scene in 1994 and acquired the project for one dollar.

Asked what kind of problem radon will pose for Burin’s operations, Harris responded, “Radon will not be a problem; it will be something that will be monitored daily and will conform to the requirements of Newfoundland’s mining legislation.”

Newfoundland Premier Brian Tobin echoed that view in a press release, saying: “We are confident that when development and production begins, the proper ventilation and safety procedures will be put in place to prevent any repeat of the health and safety issues related to previous mining in St. Lawrence.”

The bulk of the world’s fluorspar production is used in the chemical industry, mainly in the preparation of hydrofluoric acid and as a flux in making steel. It is also used in glass and enamel.

In the U.S., the delivery price for fluorspar ranges from US$135 to $150 per tonne, with the primary customers being large chemical and aluminum companies that typically sign 5-year supply contracts with the price negotiated annually. Harris says Burin has already signed letters of intent with six buyers.