ritish Columbia’s coalindustry generated$3.2 billion in provincial

GDP in 2011 and contributed$715 million in tax revenue. Butmany British Columbians are onlyjust beginning to appreciate thesignificant economic contribu-tion the industry makes to theprovince and its people, says AnnMarie Hann, president of the CoalAssociation of Canada.

“Coal is essential to British Co-lumbia as a catalyst for economicdevelopment, international trade,investment in B.C. communitiesand the employment of thou-sands of British Columbians,”says Ms. Hann. “With 12 billiontonnes of potentially mineable re-sources, coal can help ensure thatB.C.’s economy remains strong foryears to come.”

The value of the coal industryto B.C. was underlined earlier thisyear with the publication of astudy by PricewaterhouseCoopers(PwC) that was commissionedby the association. It found thatcoal comprised 22 per cent of theprovince’s total exports in 2011.While Japan and South Koreawere the biggest markets for B.C.’smetallurgical coal, rising demandin China points to a steady growthof the export market in the yearsahead.

Janice Plumstead, who au-thored the report as director ofeconomics and statistics at PwC,says the coal industry also makesan important contribution to pro-vincial employment. It supportedmore than 26,000 jobs in 2011, shenotes, and the estimated annualwage of people directly employedby coal companies was $95,174,twice the average provincial wageof $43,500 a year.

“The majority of coal producedin B.C. is metallurgical coal, usedfor steelmaking, which is essen-

tial material for modern living,”says Ms. Plumstead, pointing outthat of the 10 coal mines in theprovince, nine produce metal-lurgical coal and one producesthermal coal.

She adds that Canada is thethird largest exporter of metal-lurgical coal in the world afterAustralia and the United States.Approximately 89 per cent of Ca-nadian metallurgical coal exportsare produced in British Columbia.

Ms. Hann says while the PwCreport confirms the industry’s po-sition about the positive impactof coal on the B.C. economy, sheis surprised by how little BritishColumbians seem to know abouthow they benefit from coal.

“Public awareness is now partof our three-year strategic plan tohelp Canadians understand thevalue of the coal industry to theeconomy as a whole – and to B.C.in particular,” she says. “It’s im-portant for people to have accessto accurate information, so thatthey can see for themselves howthe industry operates, and how itbenefits them.”

Ms. Hann adds that the asso-ciation has joined other indus-try partners to form the CoalAlliance, in order to provide acounter-balance to misinforma-

tion shaping public discussionson two coal terminal expansionprojects at Port Metro Vancouver.

“The aim of the alliance is tofacilitate an informed discussionabout the importance of coal tothe B.C. economy, and the criticalrole that terminals play in gettingour coal resources to export mar-kets,” she explains.

The role of B.C.’s coal exportterminals was highlighted in thePwC report.

Coal shipments were up by 10per cent in 2011 compared with2010, amounting to 24.5 milliontonnes, while higher coal pricespushed export revenues up by animpressive 35 per cent, notes Ms.Plumstead.

Those numbers are expectedto keep rising as new mines comeon stream in the years ahead.For example, Fortune Minerals, aLondon, Ont., firm, is developingthe Arctos Anthracite Project innorthern B.C. in an 80/20 partner-ship with a subsidiary of POSCO,the giant Korean steelmaker.

Fortune president and CEORobin Goad says Arctos is one ofthe world’s premier metallurgi-cal coal projects and the mostadvanced Canadian deposit ofanthracite, the highest qualitycoal and a key ingredient in steel

and metal processing. Basedon current Product Reserves of69 million tonnes, the mine isexpected to be in productionfor 25 years. However, given thesignificant historical resources,Arctos has the potential for multi-generational production.

“Global demand for anthraciteis increasing due to new steel-making technologies, traditionaluses like sinter and electric-arcsteel manufacturing that requirelow volatile carbon sources, andthe need for lower emissions inthe process,” says Mr. Goad.

“Emerging economies such asChina, India and Brazil are drivingforces for metallurgical coal, andwe will be meeting that demand.Additionally, traditional suppli-ers of this product, like China, arenow net importers, and Vietnamis reducing exports due to domes-tic requirements. This is creatingan opportunity to develop theworld-class Arctos deposit,” headds.

Another new coal mine indevelopment is Cardero ResourceCorp.’s Carbon Creek metallurgi-cal coal deposit in northeast B.C.

“The property has a currentmeasured and indicated resourceestimate of 468 million tonnesincluding an initial reserve of121 million tonnes, making itthe largest single resource in thePeace River coal region,” saysHenk Van Alphen, president andCEO of Cardero Resource.

“The recently publishedpre-feasibility study indicatesthe potential for this project tohave the largest production andlowest cost profile in the regionwith initial startup in early 2015,”adds Mr. Van Alphen. “From aneconomic perspective, the projectwill create 800 to 900 sustainablenew jobs to operate the mineand 300 to 400 new jobs duringthe construction, with a greaternumber of indirect jobs to the lo-cal community of Hudson’s Hope.It will also contribute royalties tothe province on the four milliontonnes annual metallurgical coalproduction, as well as federaland provincial taxes on profits ofhundreds of millions of dollarsper year at full production.”

Coal industry essential to British Columbia’seconomy – and its people

B.C. COAL

$3.2 billionThe coal mining industry’s con-tribution in value-added GDP tothe provincial economy

$715.2millionTotal tax payments by the coalmining industry to all levels ofgovernment

12.9 billionTonnes of potentially mineablecoal resources in B.C.

10Operating coal mines in B.C.

40 per centB.C.’s share of national coalproduction

3Canada’s world rank as anexporter of metallurgical coal

21.8 per centCoal’s share of B.C.’s total exportactivity

26,000Jobs in B.C. attributable to thecoal industry

$95,174Estimated average annual wagefor workers directly employedby coal companies

Source: PwC – Economic Impact Analysis ofthe Coal Industry in British Columbia in 2011

SpecialBRITISH COLUMBIA COAL

This report was produced by RandallAnthony Communications Inc. (www.randallanthony.com) in conjunction with the advertising department of The Globe and Mail. Richard Deacon, National Business Development Manager, rdeacon@globeandmail.com.

Ann Marie Hann, president of the Coal Association of Canada, stresses coal’simportance to B.C. SUPPLIED

C 1 • AN INFORMATION FEATURE FOR THE COAL ASSOCIATION OF CANADA the globe and ma il • wednesdaY, maY 1 , 201 3

Tel: 1.604.408.7488 | Toll free: 1.888.770.7488 | info@cardero.com

• Largest single metallurgical coal resource and largestreserve in the prolific Peace River coalfield, northeast BC

• Completing Bankable Feasibility Study for simultaneousopen pit and underground mining

• Projected largest producer with estimated lowestoperating cost in the area

• High quality Hard Coking Coal (60%) and Semi SoftMetallurgical Coal (34%)

• Anticipated start-up in 2015 with average >4M tonnes/year clean coal production

• Existing, reliable infrastructure (power, port & rail)

• Cardero holds 100% working interest subject to25% NPI after payback

For full details with respect to the Prefeasibility Study for Carbon Creek, including the assumptions underlying the PFS and details on theapplicable qualified persons, see the November 6, 2012 Norwest Corporation report “Prefeasibility Study of the Carbon Creek Property,British Columbia, Canada”, available on SEDAR.

TSX: CDU | NYSE-MKT: CDY

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Westshore Terminals is the vital link that connects the amazing Canadiancoal chain to the markets of the world. That co-operative effort between

mines, railways and our terminal, speeds Canadianexport coal around the globe after traversing some ofthe most rugged terrain and testing conditions in theworld.

We are a key part of thiscoal chain that moves

millions of tonnes of export coal a year in asafe, environmentally responsible mannerand brings in return prosperity through tradeand thousands of high-paying jobs andopportunities here at home.

A series of recentlycompletedequipment upgrades on our site has taken yearlycapacity from 23.5 to 33 million tonnes. It meanswe can handle coal trains faster and more efficientlyand dispatch ships more quickly as we improve ourcarbon footprint and boost the overall performanceof Canada’s vital coal chain.

Canada’s vital link

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AN INFORMATION FEATURE FOR THE COAL ASSOCIATION OF CANADA • C 2

BRITISH COLUMBIA COAL

t h e g lo b e a n d m a i l • w e d n e s daY, m aY 1 , 2 01 3

ith terminals in BritishColumbia handling theexport of the 27 million

tonnes of coal produced thereeach year, and another 20 milliontonnes from mines in Albertaand the United States, transpor-tation and logistics in B.C.’s coalindustry bring major economicbenefits to the province.

According to a report byPricewaterhouseCoopers (PwC)commissioned by the Coal As-sociation of Canada, coal makesup 11 per cent of all railway trafficin Canada, with 92 per cent of itdestined for B.C. export terminals.

Alan Fryer, a spokesperson forthe Coal Alliance, which bringstogether representatives fromacross the coal industry, includ-ing mines, marine terminals,railways, industry associations,organized labour and others whosupport the mining and ship-ping of coal in B.C., says that coalplays a major role in port activity.Indeed, it represents about 25 percent of the value of everythingthat’s shipped through PortMetro Vancouver.

“Coal has been shipped safelyand responsibly for more than

40 years – by rail from the minesto the terminals, and from thoseterminals onto deep-sea vesselsfor export to global markets,”says Mr. Fryer.

He points out that just as Cana-da was built on natural resourcesand the railroad, the country’scommodities and the supplychain that brings them to markettoday remain vitally important.

“Thanks to the development of

Metro Vancouver as a world-classport city and gateway for trade,we are able to safely ship thosecommodities to the rest of theworld, creating more jobs andeven more economic activity hereat home,” he says.

CN transports approximately15 million tonnes of coal annu-ally to B.C. terminals from minesin B.C. and Alberta, says AndyGonta, CN’s vice-president of bulk

products.“In broad terms, the transpor-

tation of coal represents aboutseven per cent of CN’s totalrevenue,” says Mr. Gonta. “As forBritish Columbia, coal traffic rep-resents approximately 17 per centof CN carloads that terminate inthe province.”

Westshore Terminals, locatedjust south of Vancouver at Rob-ert’s Bank, in the municipality of

Delta, handles most coal exportsfrom B.C. In 2011, it handled 27million tonnes of coal, of which70 per cent was produced in Can-ada and the rest in the U.S., saysgeneral manager Denis Horgan.

“That equates to more than$4 billion in export revenues forCanada,” he notes, adding thatcoal brings much more than that.Westshore’s direct economiccontribution locally includes 300high-paying jobs, more than$3 million to Delta for propertytaxes and utilities, $3 million to$4 million worth of contractsfor local suppliers, and some$160,000 a year in support forlocal charities and communityorganizations.

Mr. Fryer says the export of coalfrom B.C. also needs to be seen inan even broader context.

“Most of the coal that’s minedin British Columbia is used tomake steel, and demand for steelcontinues to be strong worldwide,in the developed countries ofEurope and Asia, and in develop-ing countries, which are growingtheir economies and lifting moreand more people out of poverty,”he says.

B.C. ports bring coal to global markets and benefits at homeEXPORTS

Even though the coal that travels through Metro Vancouver is no more harmful than many otherparticles that may create dust in an urban environment such as road dust, playgrounds or beaches, theLower Mainland’s coal terminals and rail carriers in B.C. have extensive monitoring and investigationprograms to address residents’ concerns about coal dust, says the Coal Alliance.

The terminals also adhere to stringent regulatory permits and requirements set by authorities,including federal, provincial, regional and municipal governments and Port Metro Vancouver. For ex-ample, all waste water is collected and treated before release, and terminals are required to have com-prehensive safety, health and environment, and quality management systems in place, all of which areaudited by third parties to ensure their effectiveness.

Railcars carrying coal are sprayed at the mine site with a coating to create a crust on top of the coalto prevent dust. Once empty, each rail car is washed prior to leaving the terminal.

Community concerns are acted on and independent samples are obtained from the community,analyzed and reported back to the community. An air sampling program ensures ongoing complianceat specified points on terminal sites, which are detailed in Metro Vancouver air permits. Sampling andtesting is conducted using independent expert contractors.

Westshore Terminals at Robert’s Bank on the B.C. coast south of Vancouver handles most of the coal exports from the province. SUPPLIED

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BRITISH COLUMBIA COAL

ith 10 of British Colum-bia’s 22 operating minesproducing coal, it’s not

surprising that the provincialgovernment is strongly focusedon creating a positive climate forthe economic, environmentaland socially responsible devel-opment of the coal industry.

B.C.’s Ministry of Energy,Mines and Natural Gas says theprovince ensures strong, respon-sible and safe mineral and coalexploration and mine develop-ment. Yet it is also a leader inenvironmental protection, suc-cessfully balancing resource de-velopment with habitat protec-tion and sustainability, through

to reclamation and mine closure.“Mining is one of the safest

heavy industries in B.C., thanksto a comprehensive regime ofworkplace health and safetypolicies,” the ministry notes.

Richard Schryer, director ofregulatory and environmentalaffairs at Fortune Minerals, aLondon, Ont., company that isdeveloping a new anthracitemine in northern B.C., says theprovince’s environmental stan-dards for mines dovetail withFortune’s view of responsibledevelopment.

“Arctos is currently in theEnvironmental Assessmentprocess. An essential part of this

process, along with communityand Aboriginal engagement,is the development of a strongclosure plan. As mining is atemporary land use, minimizingthe impact to the environmentwhile in production and rehabil-itation of the area at closure arenot only best practices, but areat the heart of environmentalrules and regulations. Returningthe land to a state similar to thatof the surrounding area is thefoundation of a legacy we can beproud of,” says Dr. Schryer.

Walter Energy, a companythat operates three surfacemetallurgical coal mines innortheast British Columbia, sees

environmental stewardship asa fundamental priority, saysAnthony Meyers, vice presidentof Canadian operations.

“We work closely withpartners, including local FirstNations, to minimize the envi-ronmental impacts of our opera-tions and continually review ourmethods to ensure we are usingbest practices,” says Mr. Meyers.

The specific challenges thecompany focuses on includesediment and erosion control;selenium, nitrate and sulphatemanagement; dust suppression;and post mine land reclamation,he adds.

As the largest producer ofsteelmaking coal in NorthAmerica and the second largestexporter of seaborne steelmak-ing coal in the world, Vancouver-based Teck is well aware of theneed for safe and sustainableoperating procedures. With fivecoal mines in southeastern B.C.,the company strives to live bythe dictum that “everybody goes

home safe and healthy everyday” and to minimize its impacton the environment.

Earlier this year, Teck wasrecognized as one of the Global100 Most Sustainable Corpora-tions for 2013 by media andinvestment research companyCorporate Knights. Teck was thetop ranked Canadian companyon the Global 100 list.

In his reaction to the recogni-tion, Teck president and CEODon Lindsay said the company’semployees live and work in thecommunities where they oper-ate, and they care deeply aboutdoing the right thing for futuregenerations.

“This ranking recognizes theprogress we’ve made, but weknow there is more work to bedone. Teck remains committedto responsible resource develop-ment and to considering people,communities and the environ-ment, now and in the future, inevery decision we make,” addedMr. Lindsay.

Responsible development ensures that coal productionbalances economic, environmental and social goals

POLICY

Workers examine a coal seam and trial cargo pit at the Arctos AnthraciteProject in northern British Columbia. SUPPLIED

Find out moreabout Canada’sCoal industry

www.coal.ca

www.coalalliance.ca

ONLINE

C 3 • AN INFORMATION FEATURE FOR THE COAL ASSOCIATION OF CANADA t h e g lo b e a n d m a i l • w e d n e s daY, m aY 1 , 2 01 3

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Think you don’t need mining? Mining helps us with justabout every aspect our modern lives. Cell phones,computers, appliances, bicycles, buses, cars, homesand electricity are just a few of the things that requireminerals and metals. Besides that, mining is one ofBC’s biggest generators of jobs and tax revenue.

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