Supporting B.C.'s Steelmaking Coal Industry

Year: 
2016

Issue

British Columbia’s coal industry makes a significant contribution to the provincial economy through employment, tax revenue and contribution to the provincial GDP.  Coal exports accounted for 8.5% of B.C.’s total exports in 2015. 

There is a long history of environmental responsibility in the mining and transportation of steelmaking coal internationally.  B.C.’s port industry operates under strict environmental regulations that are among the highest in the world, ensuring no health risks for those who live near or work at coal terminals.

Increasingly, industry opponents have made misleading and false claims about coal transportation in B.C., and have lobbied municipal governments to take action. This has resulted in some municipalities considering or taking policy positions against coal transportation in their communities and opposing expansion and infrastructure improvement projects. The industry, in fact, contributes to B.C.’s export growth strategies and ensures critical upgrades are made to terminal facilities to improve and mitigate environmental and residential impacts. 

Restricting or delaying the development of the coal supply chain will result in the loss of livelihood for a significant number of families in many parts of B.C. that are supported by the coal industry and reduce B.C.’s global competitiveness.

It is important that B.C. protect the economic benefits of this sector by informing the general public and municipalities about B.C.’s steelmaking coal industry and corresponding global demand for steel, and ensure its transportation is not inhibited at critical points in the supply chain. It is essential for our economy that B.C.’s steelmaking coal industry have access to international markets.

Background

In 2015, over 25 million tonnes of steelmaking coal was produced in British Columbia. B.C. has 12 billion tonnes of mineable coal reserves, of which 8 billion tonnes are in the Kootenay region and 4 billion tonnes are in the Peace River coalfield of northeastern B.C.  Restricting the availability of Canadian coal will have limited impact on the world market, but will severely impact our domestic economy.

According to figures compiled by PricewaterhouseCoopers, for the Coal Association of Canada, in its 2013 PwC Economic Report on Coal – British Columbia, B.C.’s coal industry generated an estimated $3.2 billion in economic activity and $715.2 million in tax revenues in 2011 for all levels of government to support much-needed public services like health care and schools. 

Major mines and terminals in B.C. spent $5.16 billion on goods and services with businesses across the province over the five years between 2010 and 2014. This spending included significant sums in communities that are not closely associated with the mining industry.

The five steelmaking coal mines in British Columbia’s Elk Valley region:

  • spent over $1 billion goods and services in 2013 throughout British Columbia with nearly 60% or $609.3 million flowing to businesses in the Lower Mainland Southwest Development Region;
  • paid $457.6 million in direct wages in 2014, based on an average industry wage of $114,600;
  • generated work for a wide array of professional service providers including engineers, technical contractors, iron workers, pipefitters, environmental experts and employees in legal, real estate, insurance and financial roles; and
  • produced 26.7 million tonnes of steelmaking coal mined for export in 2014, with revenue value of $3.3 billion.

B.C.’s steelmaking coal is vital to everyday life around the world.  It is used to build major projects like bridges, rapid transit systems, wind turbines, high rises and everyday consumer products like cars, bicycles, tools, lawn equipment and household appliances.  It is also one of the most commonly recycled products.

Steelmaking, like many industrial processes, does create some emissions.  Steelmaking coal, also known as metallurgical coal, is an essential part of a chemical reaction needed to create new steel.  It is not used to generate power. 

Steelmaking coal is inert.  It can be handled with bare hands.  It is not considered a dangerous or hazardous material by Transport Canada and it is safely handled by thousands of workers every day.  B.C.’s port industry operates under strict environmental regulations that are among the highest in the world, ensuring no health risks for those who live near or work on port terminals.

Rail is the most efficient mode of transport to move commodities and has been shown to be two to five times more fuel-efficient than truck transportation depending on the commodity. 

As the population continues to grow, residential neighbourhoods have expanded and in some areas, closer to port terminals.  In some communities, where rail lines connect with port terminals, public debates have been held in the media and with their municipal representatives, calling for the elimination of coal transportation through communities where rail lines have been located for decades, in most cases, long before the residential neighbourhoods were built around them. 

Conclusion

Steel is vital for the world’s advancement.  Coal exporting is a major economic contributor for Canada and British Columbia’s ports play a critical role in transporting Canadian steelmaking coal to important international markets.

The provincial government has an important role to play in supporting expansion and infrastructure improvements in this important industry and protecting exports from being inhibited at critical distribution points.

THE CHAMBER RECOMMENDS:

That the Provincial Government:

  1. Promote the productive and environmental benefits of high quality Canadian steelmaking coal to international markets;

  2. Work with industry to develop sound public and economic policies that fosters B.C.’s steelmaking coal mining industry; and

  3. Support educational opportunities to inform people of the province’s steelmaking coal resources, its contribution to meeting global demand for steel production and the corresponding economic prosperity through high paying jobs for tens of thousands of families, to B.C.’s small businesses through local procurement, through tax generation and the related economic spinoff.

Download (.pdf)