Construction of the Cheviot mine, near Hinton, Alta., has been postponed after several letters of intent to buy coal from the operation expired, says 50%-owner Luscar.
Several Japanese steel mills had signed letters of intent to buy Cheviot’s coal. However, the environmental approval process delayed the project, causing the letters to expire. They were not renewed.
Despite the decision to postpone construction, joint-venture partners Luscar and CONSOL Canada, a division of Pittsburgh, Pa.-based CONSOL Energy, will secure the rights to Cheviot in case coal prices improve.
As a result of the postponement, the partners will also close the nearby Luscar mine when contracts with Japanese steel mills expire at the end of March 2002. Under the original plan, employees of the Luscar mine would have transferred to Cheviot once these contracts expired.
“The decision to postpone Cheviot and wind down the Luscar mine is a blow to our employees, their families and the town of Hinton,” says Luscar President Gordon Ulrich. “However, having a committed market for the coal is vital, and without the prospects of Cheviot in sight, closure of the Luscar mine is unavoidable.”
The Luscar mine is operated by Cardinal River Coals and employs 321 workers. In 1999, it produced 2.6 million tonnes of metallurgical coal for export to international steel mills. Layoffs will begin in November, with reclamation to follow.
The mine began production in 1921 and was closed in 1956. It was reopened in 1969 to serve the demand for coking coal in the Pacific Rim.
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