Western Canadian's Brule mine wins environmental permit from BC

Western Canadian's Brule mine wins environmental permit from BC

Washington (Platts)--13Jul2006

Western Canadian Coal's Brule surface coal mine south of Chetwynd, British
Columbia, received environmental approval from the province's Ministry of
Environment.

Brule is located in the Burnt River property. The Brule deposit has 36.21
million metric tons of measured and 10,000 mt of indicated low-volatile
bituminous coal and the Blind deposit contains 2.36 million mt of inferred
low-volatile bituminous coal in three seams of the Gething coal formation (PCT
11/4/05).

The Brule mine will replace production from WCC's Dillion mine, which is
expected to close later this year. Up to 2 million mt/year of pulverized coal
is expected to be produced at Brule and trucked to the Bullmoose loadout near
Tumbler Ridge until a new loadout is built west of Chetwynd at Falling Creek
Flats.

"The environmental assessment concluded the proponent's proposed mitigation
measures satisfactorily address issues raised by government agencies, First
Nations and local communities," according to ministry spokesman Seumas Gordon.

The certificate, which was issued July 6, includes 14 environmental management
plans and 122 commitments that WCC must implement throughout various phases of
the project. Included in the commitments are air and water quality monitoring
and protection, dust control and sediment and erosion control plans during
construction, protection of archaeological and traditional land use sites, a
wildlife protection plan to minimize potential impacts on grizzly bears and
woodland caribou, and a decommissioning plan for when the mine is shut down.

It was the last permit the mine needed, Paul Brent, WCC's vice president of
marketing and commercial development, told Platts Wednesday.

The project is not subject to a federal environmental assessment under the
Canadian Environmental Assessment Act, according to the ministry.

WCC plans to initially produce between 800,000 and 1 million mt/year at Brule.
"The next step is to secure what we need from customers and major suppliers to
give us confidence to go forward with the project," Brent said. "We are ready
to roll once we have the commitments there."

Low-vol coal prices for the coal year dropped substantially compared with
other types of coal, Brent said. "The price took a significant drop relative
to other coals. It took everyone by surprise."

WCC will begin producing from the section of the mine adjacent to Dillion and
continue to use the loadout and infrastructure there. If it gets the sales
commitments, Brent said WCC would proceed with the Big Brule project that
includes a new rail loadout and new haul roads.

The project is expected to cost about C$200 million (US$176.3 million).

--Mark E. Heckathorn, mark_heckathorn@platts.com

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