Last Hinton Mine Closing

Hinton's mining industry, which employs about 400 people at two mines, has had the rug pulled out from under it in the space of a week.

On April 2, just eight days after Luscar Ltd. announced its intention to close the Obed Mountain mine 30 km east of Hinton, resulting in 95 workers being laid off, Fording announced that it's closing the Luscar mine near Cadomin. Fording also said that at this time it doesn't intend to develop the proposed Cheviot mine in the same area.

"We have thoroughly evaluated the Luscar mine and will proceed with the orderly shutdown announced by its previous owners, due to the depletion of coal reserves at the mine," said Jim Gardiner, president of the Fording Coal Partnership.

"The partnership has also decided that the current supply capacity of metallurgical coal to world markets does not justify the immediate development of the nearby Cheviot project," said Gardiner. "Our producing properties have sufficient capacity to meet current market demands for our metallurgical coal. The Cheviot project is one of a number of potential expansion projects that the partnership can undertake when an additional supply is warranted by coal markets."

Cardinal River Coals (CRC), the company that operates the Luscar mine, will lay off 190 of its 290 employees in May, with May 5 or 6 being the last days of work for many. The remaining 100 will be kept on to mine the one million tonnes of coal left in the A6 pit, a project that will last until about April 2004, said CRC mine manager Lloyd Metz.

Until the April 2 announcement, CRC employees had been working under the business plan that the mine would close near the end of 2003, with all 290 employees working until the closure.
Metz said some workers will be needed to reclaim the mine land and to maintain the processing plant at the Luscar mine, which would be used to process the coal from Cheviot if the replacement mine was developed. Metz said it's too early to say how many employees will be kept on for these purposes.

"It's an unfortunate situation that's been because of market conditions," said Metz, adding that the Fording partnership values the coal reserve at Cheviot.

"We'll continue to pursue evaluating the Cheviot reserve and see what the future has to offer," he said. CRC estimates there is about 100 million tonnes of metallurgical coal available at Cheviot.

The Fording Coal Partnership has owned the Luscar mine since March 1, 2003, but the previous owners, Luscar Ltd. and CONSOL, are responsible for employee severance costs as well as reclamation obligations for mining that took place before March 1, 2003, said Metz.

Jason Williams, a truck driver at the Luscar mine, said that after years of tension and uncertainty about the future of CRC and Cheviot, it was a relief to know a decision had finally been made. At the same time, the news still came as somewhat of a shock.

Williams said some employees were optimistic that Fording's March 10 decision to downsize the Line Creek mine in B.C. meant the company might be deciding to develop Cheviot instead.

Williams said he is fortunate because, unlike many of his co-workers, he doesn't have a lot of major financial obligations. "I don't have a family, I just have a mortgage," he said. "For me, the mine closing is an opportunity to move on."

Employees will receive severance based on number of years employed, and the union is checking into the possibility of finding work for laid off workers at other mines, said Robin Campbell, president of the Luscar mine's union, the United Mine Workers of America Local 1656. Counsellors from Murray Axsmith and Associates will also be coming to Hinton to help laid off employees in their job search.

"Considering the news, I think everybody's reacting really well," said Campbell.

But, Campbell said there are a lot of downsides to the layoffs. For example, Hinton will soon be losing about $21 million from its annual economy that used to come from the income of Obed and CRC employees.

"I'm not really worried about the Town of Hinton - I'm more worried about the people being laid off," said Mayor Alex Galbraith, who will be losing his other job as a maintenance supervisor for CRC.

"We've proven we have the ability to work through this," Galbraith said, adding that Hinton has weathered several large layoffs over the years.

For example, Hinton lost about 300 jobs when the Gregg River mine closed in 2000, and before that, when the Luscar mine was downsized in the early '80s, Hinton lost another 400 jobs.

Moreso,there is still plenty of coal at Obed and Cheviot for when the coal markets recover. "Obed mine and the Cheviot project are not dead in the water - I still have good feelings about them," said Galbraith.

"We'll cope with it - we'll do our best for the people that are being put out of jobs," said Gerry Repecka, director of economic development for the Town of Hinton. "We're resilient," he said, adding that Hinton still has strong forestry and oil and gas industries, and the potential to grow in other areas such as tourism.

Realtor Marcel Dery said the real estate market probably won't be hurt too much by the layoffs, because even before the mines closed, the market prices were based on the expectation that the mines were likely to close soon.
"The real estate market will not be as positive as if Cheviot were proceeding, but because (the mine closures) have already been taken into consideration, I don't think it will have as negative of an impact as some people might think," said Dery, adding that there is even a shortage of houses on the market right now.

"It's a dire consequence, no doubt, but it's not going to break the town, that's for sure," Dery said. "We're going to survive this - we're survivors."