More and more, it would seem, Canada’s coal industry is in a period of major transition. The world shortage of coal in the late-1970s and early-1980s has been replaced with difficult years of oversupply, resulting in downward pressures on both prices and volumes. Nineteen- eighty-seven was no exception. As James Aylsworth of Energy, Mines and Resources Canada explains, these are pivotal years in terms of the reshaping of the country’s coal industry. “Given current and forecasted levels of international and domestic demand, it is widely believed that the era of major annual increases in Canadian production and exports is over. Barring unforeseen political or demand-supply interruptions in world trade patterns, the near-term future for international coal trade appears to be one of slow growth, continued downward pressure on prices and slowly changing trade patterns. These pressures and trends can be expected to create significant changes in both Canada’s and other countries’ coal industries in the 1990s.”
Certain technological changes have contributed to reductions in over-all demands for coal in several steel- producing countries. Chief among them are more efficient blast furnaces and the trend towards electric arc furnaces.
On the economic side, traditional steel-producing countries, such as Japan, Europe and the U.S., are battered by increasing competition from developing countries, including South Korea, Taiwan and Brazil. Currency exchange rate fluctuations, especially the appreciation of the Japanese yen, haven’t helped matters.
Despite the general pall that seems to be hanging over the industry, figures for 1987 were actually somewhat better than the previous year. The latest statistics indicate that the volume of Canadian production was up a couple of percentage points over 1986, when it stood at 57 million tonnes. Exports too are expected to have increased — slightly more than 26 million tonnes compared to 25.9 million tonnes the previous year. And while both imports and domestic consumption decreased consecutively in 1985 and 1986, it is believed they were up in 1987. Aylsworth estimates that imports rose between 5% and 10% above the 13.1 million tonnes experienced in 1986, while domestic consumption increased roughly 10% to 49.1 million tonnes.
A clear indication that the industry is still on its feet is the fact that Canada can boast two new coal mines. The Cape Breton Development Corp. brought its Phalen Colliery on stream last May, and the mine is expected to produce 8,600 tonnes run-of-mine daily. Meanwhile, Fording Coal and the city of Edmonton, Alta., have formed the Genesee coal mine, which will supply about three million tonnes of coal to feed the Genesee Power Plant, operated by Edmonton Power. This mine is still in the development stage, with operations scheduled to begin in late 1988.
As Canada’s coal industry adjusts itself to a changing world market, it’s important to remind ourselves of the vital role it plays in the national economy. The industry employs nearly 12,000 people directly (about the population of Baie-Comeau, Que.), and a further 30,000 indirectly, reports the Coal Association of Canada. An additional 200,000 jobs (equivalent to the population of Windsor, Ont.) are in industries dependent on coal, including steel-making, transportation, utilities, service and consumer items.
Each year, the industry pays more than $200 million to governments in the form of direct and indirect taxes, generates $145 million in personal income tax from its workforce and is responsible for more than $730 million of direct expenditures on goods and services.
And here’s a fact that isn’t widely known: coal ranks as Canada’s most valuable mineral export commodity, with annual exports valued at nearly $2 billion (about equal to the value of our imports of cars from Japan). At a time when the industry is in a general slump, that statistic is worth remembering.
For the third consecutive year, The Northern Miner Magazine has asked Canada’s major coal-mining companies to compile round-ups of their operations for the past year. These submissions appear on the following pages. While we received reports from nine of the 10 companies we contacted, one of the largest, Manalta Coal, chose not to contribute. As was the case last year at this time, the company explained that a submission was unnecessary, because its mining activity and general outlook have changed little since 1985, when it last submitted a report.
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