News Southern Alberta

Residents in favour, opposed to proposed coal mine square off at hearing

Abandoned Grassy Mountain Coal Mine near Crowsnest Pass where the Grassy Mountain Coal mine would be developed. (Keith McClary photo Creative Commons)

By Sean Oliver, Local Journalism Initiative Reporter/Shootin’ the Breeze

BLAIRMORE – Participants both in favour and opposed to the proposed Grassy Mountain mine squared off Oct. 29 to Nov. 3 during the scheduled presentation and cross examination period.

Grassy Mountain Coal Project is a proposed steelmaking open pit coal mine that would be developed on a legacy mining area, seven kilometres north from Blairmore in the Crowsnest Pass, Alta. The project is projected to produce around 93 million tonnes of product coal over its 23-year mine life. Currently, the project is being reviewed by the provincial and federal regulators.

The hearing topics focused on the project’s purpose, visual aesthetics, alternative road access and the potential socioeconomic effects the mine would have on the region.

In Benga’s beginning statement, vice-president of external relations Gary Houston said the mine would spike the local economy, encouraging local businesses, the service industry and encourage tourism in the area.

“Benga considers the economic development, recreation, and tourism are compatible and mutually supportive in the community and the region,” he said.

Providing Crowsnest Pass with an established industry, Houston continued, would help draw more hotels and restaurants, which in turn would attract more tourists to the region to the point the municipality could rival a destination like Fernie.

Gaving Fitch, representing the Livingstone Landowners Group, challenged such an assertion because it ignored travel destination have just that: a destination worth going to. Amenities like hotels and restaurants, he said, come second.

“How, then, is removing the top of one of the local mountains going to contribute to attracting or drawing more tourists?” he asked.

Money talks

In terms of improving the local economy, Houston added that Benga’s “hire local” policy would ensure the two year construction phase would provide meaningful employment for nearby residents, as well as establishing some 400 good paying, permanent positions once the mine was operational.

The total socioeconomic benefit of the mine, however, was called into question.

Though Houston had said in Benga’s opening statements that some 500 jobs would be created during construction, it was later corrected that at its peak the construction phase would only require 190 workers. Overall, an average of 120 workers will be employed while construction is occurring.

The $1.7 billion in provincial and federal royalties over the mine’s 25 year life span — two for construction and 23 for operations — was also based on an assumed average price of $140 USD per tonne of metallurgical coal. Coal prices, Benga admitted, can regularly fluctuate above $300 or below $100, though the process is a complicated one to predict since prices are established directly between individual steel makers and coal mines.

With more and more countries investing in green energy to combat climate change, Fitch said the economic viability was being overly optimistic since global coal use is estimated to decrease.

Alternative methods of producing steel without metallurgical coal, like hydrogen field forges or electric arc furnaces, would also hampen the mine’s profitability on world markets.

At the national level, developing the mine contradicted Canada’s commitment to limiting gas emissions as part of the Paris Accord.

Gas emissions as part of the project’s mining operations, however, are seen as next to negligible.

“I believe the greenhouse gas emissions associated with the project are in the order of 0.05 per cent of Canada’s total greenhouse gas emissions, so that seems like a small number to me,” said Houston.

He also added that figure would only be applicable once the mine reached peak production during its nineteenth year.

As well, decreasing coal demand worldwide only really applies to thermal coal, or coal used to produce electricity, said Benga’s Mike Yuill.

“For Canadian export hard coking coal, the outlook is still very robust,” he said.

While using electricity in arc flash furnaces is growing, Yuill added that the process requires recycling old steel. For many countries in southeast Asia just starting to develop, little amounts of steel exist to be recycled, necessitating the need for metallurgical coal. 

As well, using hydrogen instead of coal is still in its preliminary stages and is not expected to be used widely during the Grassy Mountain mine’s lifespan.  

Property problems

The mine’s land use, as well as its effect on nearby properties, was also discussed.

Since the mine is located on an existing mine that closed in the 1960s, Benga argued that it’s reclamation efforts would improve the area since the previous mining company did not complete any land reclamation.

The company also clarified concerns about private properties being located within the mine’s boundary; the boundary was purposefully drawn larger than what operational needs actually required to facilitate appropriate environmental study. No properties exist within the mine footprint, where mining would occur.

For Fran Gilmar, who has owned property in the area for 60 years, the distance properties were from the mining footprint was irrelevant since mining activity would destroy the area’s source of fresh water, particularly Gold Creek.

“I’ve drank it for 58 years, and it’s — it’s beautiful water. It’s the last of the last,” she said. “You know, you do not find water like that anywhere.”

In addition to water pollution, residents also said the resulting air and noise pollution would significantly devalue their properties.

While acknowledging values would decrease if a catastrophic accident occurred, Brian Gettel, a professional appraiser who testified at the hearing, said property losses would only really be affected by the dust produced at the mine.

He estimated the additional air pollution would result in 10 per cent or less loss in property value, though mining activity would more negatively affect the higher end housing, which typically involves people from the city owning a second house in an alpine area.

“Put simply, second homes in a mountain area are not necessarily the greatest thing if it’s a mining community,” said Gettel.

To mitigate property losses in the Grassy Mountain area, Benga had engaged nearby landowners throughout the proposal and application period, Houston said. A voluntary buy back program had been established, with Benga offering to pay owners double what their property was worth, based on individual negotiations.

The average starting point for such negotiations, Houston continued, was $800,000.

Describing $800,000 as double the average property price, however, was a disputed figure.

“From my perspective, $400,000 is a rare instance, and that is the absolute lowest value I’ve seen,” said Gettel.

In their communications with Benga, Norm and Tyler Watmough, who own property immediately adjacent to the proposed mine, said negotiations were more like an ultimatum.

The initial offer the family received was for $750,000, even though they knew two of their neighbours’ land had been bought by Benga for $1.1 million and $1.3 million.

When the family declined the offer, Benga counteroffered $800,000, claiming it was 60 per cent premium over the highest appraised property in the region. The Watmough’s again refused the offer.

“We felt that they were bullying us and trying to force us out at a price that was below market value,” said Tyler.

The difference in pricing, Houston said, was the result of Benga determining what land was necessary for them to own in order to operate the mine. Land within the mine footprint, then, would be a higher priority for purchase.

Landowners in the area also are concerned they will be cut off from Grassy Mountain road, the most direct access to their properties. Though Benga has suggested alternative roads exist, locals say the routes amount to little more than quad trails or are only accessible parts of the year with 4×4 trucks.

The issue stems from a former agreement property owners had with the gas company Devon Canada Corporation. The agreement granted residents permission to access the Grassy Mountain road, even though it went through private property.

Richard Secord, legal counsel for the affected landowners, said Benga did not do its due diligence in ensuring residents could still use the road.

“You didn’t determine or bother in your public consultation to find out whether it [the agreement] was real [and] that they had a similar access to the Grassy Mountain Road,” he said.

In Benga’s defense, Mr. Houston responded that no landowners had approached them about the issue until the hearing.

“I don’t know that the onus is on Benga to ask [if] there any secret agreements that we don’t know about,” he said. “The lines of communication have been open for five years. The fact that we have intended to close the Grassy Mountain Road has been documented in writing at least [since] 2015 and through several other communications.”

When Martin Ignasiak, Benga’s legal counsel, asked landowners Larry and Ed Donkersgoed why they did not discuss the issue with the mining, they replied they just assumed Benga would know.

Benga’s understanding of the agreement was residents could maintain the road at their own expense, though Mr. Houston said the company was under the impression it really only included clearing snow.

He also said that the agreement only formally acknowledged Devon was not liable for residents using the road and gave the gas company power to terminate the agreement with 120 days written notice.

Evidence of the agreement brought before the hearing, Mr. Houston continued, was also a little suspect since a letter indicating the agreement was written and signed by a former Devon employee. The letter didn’t have an official letterhead and only described a verbal agreement rather than laying out terms and conditions.

Accessing the hearing

The public hearing for the joint review panel continues throughout November. Live and recorded proceedings of the hearing is available on YouTube at https://bit.ly/GMtnHearing, with transcripts and submitted documents accessible at https://bit.ly/AllDocx.

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