Recent History – 2000
March 2, 2000, By Mark Nielsen, Daily News Staff
Blaming depressed coal prices and relatively high production costs, Teck Corporation announced Wednesday that the Quintette coal mine will be shut down 2 1/2 years earlier than scheduled. Nearly 600 employees will lose their jobs at the Tumbler Ridge mine when it shuts down on Aug. 31, 2000, rather than the originally scheduled date of 2003.
“The numbers simply do not add up to a viable business, so hard decisions have been made,” said Quintette president Mike Lipkewich.
According to Teck, coal prices have fallen 28 per cent over the last two years, and sales volumes are down by 40 per cent, due to rising international competition, coal surpluses and the weak Canadian dollar.
During the last nine months of 1999, following a reduction of about $9 US per tonne on April 1, Quintette incurred a cash loss of more than $10 million. And effective on April 1 of this year, he said the price will go down a further five per cent or about $2 US per tonne.
“When combined with the recent sales volume reductions, Quintette has been placed in an impossible situation,” Lipkewich said.
Minister Responsible for Northern Development Dan Miller and Peace River South MLA Jack Weisgerber, both who went to Japan last February to secure support for the mine, said they were surprised by the announcement.
And they both said said there’s nothing the government can do to keep the mine open.
“You can’t legislate that they continue to mine,” Weisgerber said.
The closure will also hurt the Port of Prince Rupert, BC Rail, CN Rail and the Canadian Mortgage and Housing Corporation which owns a large portion of the housing in Tumbler Ridge.
“There’s a lot of parties that are going to be impacted by the closure,” Miller said.
The job loss will definitely hurt the Tumbler Ridge business community said the town’s chamber of commerce president Bernie Lehmann. But he added that the extent of the impact remains unknown until there’s a better idea of how many people will leave Tumbler Ridge.
“I can see probably most of the younger people going because what are you going to do?,” he said. “A lot of them are already going off.”
And with the shutdown looming, Lehmann said people are going to be more hesitant to spend. But he said it was inevitable that Quintette would close someday.
“Now, it’s finally crunch time,” he said. “A lot of people were banking on three more years and then saying “well, that’s going to be it for me anyway.”
“So for a lot of them, they’re going to be going a bit sooner than they wanted to.”
The chamber’s manager, Doreen Young, is more upbeat, saying that now Tumbler Ridge will be able to prove that its more than just a mining town.
She pointed to tourism, two new sawmills, and the oil and gas industry of examples of where Tumbler Ridge can still cash in. “The community isn’t going anywhere,” she said. “Who knows, maybe some other coal company will come in and may be able to run it at a profit. Mines have shut down and started up in the blink of an eye.”
But Lipkewich said the Quintette shutdown is permanent.
“I don’t believe that Quintette will be reopened,” he said. “I think that this is a permanent closure, and we don’t see a recovery in coal prices within the foreseeable future.”
He added that once Quintette closes, it automatically loses its contract to sell coal to the Japanese. However, neighbouring Bullmoose mine, also owned by Teck, may benefit. Lipkewich said Bullmoose has been cheaper to run because less waste is moved for every tonne of coal that’s produced.
As a result, he said that volumes produced and the number of jobs at Bullmoose should rise.
Lipkewich said Quintette is committed to an orderly closure. “We’re committed to making sure that all the employees are paid, with severance payments as well, and then all of the suppliers who supply the goods and services are also paid, and that all of the environmental obligations are satisfied.”
But Weisgerber said Teck’s responsibility should go farther than that. “My expectation goes beyond an orderly closure to helping employees in terms of placement in dealing with the municipality in dealing with some of the costs that have been incurred on their behalf,” he said.