A new mine will soon open and an old one will be cleaned up as B.C.'s mining industry continues to exploit high commodity prices Roca Mines Inc. has started construction on B.C.'s first new mine in almost a decade, near Revelstoke.
Meanwhile, Epcor Utilities Inc., of Edmonton, has opened a new water-treatment plant at the former 70-year-old Britannia Beach copper mine along the Sea-to-Sky Highway.
Vancouver-headquartered Roca expects its $14-million MAX molybdenum mine, located 60 kilometres southeast of Revelstoke to begin operations this fall. It will be the first B.C. mine of any kind to open in nine years.
"It's a very attractive opportunity because the global market is so huge," says Scott Broughton, Roca's president and CEO.
Roca is leading a charge of mining companies that are seeking to mine molybdenum exclusively as a result of surging commodity prices. In the past, molybdenum - also called moly and used primarily to make steel - was mined in conjunction with copper-mining and other metal-mining operations.
"It's not a race against each other," says Broughton, adding competition is good for the industry.
"Where the race is now is the cashflow. Price is very good in the near term. (Companies) are basically chomping at the bit to build mines and produce product."
B.C. is the world's fourth largest molybdenum producer, but it has only one pure moly mine - the Endako Mine, located near the village of Endako between Prince George and Prince Rupert. Other B.C. mines produce moly while mining copper and other metals.
Roca expects to produce 500 tonnes of moly per day in the mine's first six months, while totals will vary in the second six months as the facility is under development.
Moly is one of several metals whose prices have risen dramatically in recent years. Demand is expected to remain strong for the foreseeable future as China's economy expands rapidly and North American construction markets flourish.
Roca, a junior exploration company, had initially planned to do what most junior exploration firms do: Locate commercial quantities of the resource, secure funding for a mine/mill and sell the project to a major producer.
However, with the price of moly around $25 per ounce, Roca decided to operate the facility itself, says Broughton.
Roca expects to produce 1.5 million pounds in the first year and ramp up to three million pounds per year by 2007.
Some customers have already offered to buy 100 per cent of the mine's output, he says. But no deals are signed yet.
"Out of cashflow, we'll be able to expand the mine," says Broughton. "That's the way the oldtimers used to do it."
Underground rehabilitation, detailed surveying and preliminary surface work are underway at the site. The facility is a conventional underground mine, so no hazardous chemicals are involved in the extraction process, says Broughton.
Rock will be blasted underground, brought to the surface and put through a crusher and a grinder. Minerals will then be separated through the traditional flotation process whereby water is mixed with the ore and metals attach themselves to air bubbles.
Tailings, the waste materials left over from the flotation process, will be stored behind a nearby dam.
Roca is fast-tracking the project by relocating a mill, concentrator and related equipment, formerly owned by a U.S. firm, to Revelstoke from the Van Stone Mill operation at Colville, Wash., located 610 kilometres south of the B.C. mine site.
The company plans to dismantle the mill, its buildings, crushing, grinding and flotation circuits, and then transport them north and re-assemble them using existing drawings. Roca says that strategy will reduce lead time, capital costs and design expenses, while allowing for future expansion because the Van Stone equipment, purchased through Roca subsidiary FortyTwo Metals Inc. for $325,000, has more capacity - 100,000 tonnes per day - than the mine is expected to produce initially.
Broughton expects the facility to generate $75 million in revenue per year by 2007 with operating costs of $15 million per year. He forecasts the mine has a lifespan of 10-12 years, based on current commodity prices.
Roca acquired the property, before metal prices exploded, in 2004 from two prospectors who had purchased the land and scientific data from U.S.-based Newmont Mining Corp., the world's largest gold producer, which explored the area in the 1970s.
"It's a good thing for British Columbia," says Michael McPhie, president and CEO of the Mining Association of B.C. (MABC) of the impending Roca opening. "It's a step forward for that part of the province. It's a good company, with a good management team, and I expect a high quality of production."
McPhie says there are now 25 mine projects going through the permit application process, compared to only one in 2001.
"The statistics on this are improving and equal $4 billion in (potential) capital investment and several thousands of jobs scattered throughout B.C.," he says.
He adds the challenge is in gaining federal environmental approvals because Ottawa has not applied the same predictability and certainty to the permit application process as the provincial government has to its system.
Meanwhile, the Britannia Beach Water Treatment Facility, a public-private partnership (P3) between Epcor and the provincial government that opened earlier this month, is expected to prevent 166,000 tonnes of copper - or the equivalent of 70 million pennies - and other metals from flowing into Howe Sound.
"We're glad to see it moving forward," says McPhie, adding the mine is an important part of B.C.'s history.
The plant removes heavy metals - including aluminum, cadmium, copper, iron, manganese, and zinc - from 12 million litres of water per day. The treated water is discharged into the ocean.
Epcor financed the $15.5-million project and co-ordinated the design and construction. The Alberta firm will operate the facility under a $27.2-million, 20-year deal with the province. According to a government news release, the P3 will save taxpayers $10 million over the life of the project.
However, environmentalists have contended the cleanup cost, which an official with the province's contaminated sites branch has estimated at $99 million, exceeds the total revenue of the former mine, which operated for 70 years before closing in 1974 and becoming an eyesore to many Whistler-bound tourists.
Stantec Consulting Ltd., Lockerbie Stanley Inc., Canadian Environmental and Metallurgical Inc., and BioteQ Environmental Technologies Inc. partnered with Epcor on the project.
"It's turned what has become a derelict mine site into a sustainable community - and will eventually stand as a hallmark of Canadian mine-reclamation expertise," says John Meech, a mining engineering professor who heads UBC's Centre for Environmental Research in Minerals, Metals and Materials (CERM3.)
Meech has been involved with Britannia Beach's cleanup, and his centre has completed several studies in the area in the past couple of months. He also assisted a company that proposed a similar facility and was shortlisted for the contract that went to Epcor.
"It's really important for people to understand what the B.C. government did here," says Meech.
"It's finally taking this site that nobody was taking care of - and making something happen."
(Monte Stewart can be reached at monte@businessedge.ca)
