A buyer will be sought for the Greenhills coal mine in British Columbia’s Elk Valley which reopened in early September after an agreement-in-principle was reached among the British Columbia government, Pohang Steel Canada and the CP Rail system.
Production at the mine stopped at the end of August when former owner Westar Mining was petitioned into bankruptcy.
“By providing a key indemnity to the trustee, our government helped open the door for the private sector to establish an operating line of credit that will allow the mine to open,” said Glen Clark, the province’s finance minister.
Energy and Mines Minister Anne Edwards said the provincial government will continue to play an active role toward the long-term viability of both the Greenhills and Balmer mines formerly owned by Westar. The Balmer mine was closed earlier this year when its 1,100 employees were locked out as a result of a labor dispute.
The package put together by government officials with the help of mine workers is viewed as sufficient to keep the operation going for at least two months. During this period, the mine will have protection from Westar creditors, giving time to find a buyer.
The direct funding to keep the mine operating, an estimated $3-5 million, is largely being provided by Pohang Steel and CP Rail. The mine’s 540 employees, members of the Greenhills Workers Association, also contributed to keep the operation alive through wage concessions and other provisions. The government agreed to indemnify the bankruptcy trustee against future risks (other than operating losses) and it also provided an indemnity to the trustee to underwrite costs incurred in locating a buyer and administering the bankruptcy.
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