COAL DEVELOPMENT IN BRITISH COLUMBIA: OPPORTUNITIES & CHALLENGES

OCTOBER 2013

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The BC Advantage

Stable political & investment climate Competitive taxation & supportive policies Canada’s Pacific Gateway World-class infrastructure, including

port and rail facilities Abundant low-cost power Comprehensive publicly available geoscience

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B.C. Mining Production: $8.3 Billion in 2012

Coal 61%

Copper 22%

Coal: $5 billion 9 operating coal

mines

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Global Demandfor BC Coal

BC is Canada’s largest exporter of coal

Over 95% of coal produced in BC is used in the production of steel

Over 70% of BC coal is exported to Asia

China24%

South Korea18%

India3%

Japan27%

Other Countries 28%

BC Coal Exports, 2012

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3 coal mines currently operating in NE BC:• Trend• Brule• Wolverine

Over 1,400 direct jobs

Northeast BC Coal Mines

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Southeast BC Coal Mines

5 operating coal mines in southeast BC

Directly employ over 3,700 people

All 5 are owned by Teck with plans to expand in coming years to sustain production levels

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Major Mine Development Projects in Northeast B.C.

Huge development potential in NE coal belt

Roman coal mine is now under construction

Quintette coal mine approved to re-open

5 proposals in EA

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2012 Northeast Coal Exploration

2004 2005 2006 2007 2008 2009 2010 2011 20120

20

40

60

80

100

120

3.6

27.119.9

10.521 20.1 20

41

109.3

$ M

ILLI

ON

$109.3 M spent on exploration programs

120,000 m drilled

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Building Partnerships with First Nations

The Province is in government-to-government discussions with First Nations about coal potential in the NE

These discussions include: • predictable consultation processes• areas of significance to First Nations• mineral tax revenue sharing from

new mines and major expansions

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Province-wide Challenges in Coal Development

Water quality management • Selenium and long-term water treatment

Wildlife and wildlife habitat • Caribou and species at risk

Shortage of skilled labour• Trades• Underground coal mining

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Challenge: Selenium Management

Selenium is a naturally occurring element and essential to biological function, but is toxic in larger doses

Waste rock from coal mining contains selenium

Province is updating provincial Water Quality Guidelines for selenium

Elk Valley Area Based Management Plan

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Challenge: Caribou and Caribou Habitat

Peace Northern Caribou Plan Goal is to increase the current

population of Northern Caribou in the South Peace from 1,100 animals to 1,200 animals within 3 caribou generations

Commitment to protect 90% of high-elevation winter caribou habitat across the South Peace

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Challenge: Skilled Labour Shortage

15,000 job openings expected Province is supporting various mining-

related skills development initiatives:• Employment Skills Access Program• BC Aboriginal Mine Training

Association• BC HR Task Force: Exploration,

Mining, Stone, Sand & Gravel

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Coal for the Future

The Province is making significant efforts to address the challenges associated with coal development across BC

Global demand for BC steelmaking coal expected to continue

Coal will continue to be a key part of BC’s economy in the coming years

The northeast = new hub for BC coal