Really, we should have seen it coming.
Former Glace Bay MLA Geoff MacLellan has never disguised his feelings for the Donkin Mine. When the Cline Group, which had bought a 75% stake in the mine from Glencore Xstrata the previous December, announced in 2015 that it had begun hiring, then-Minister of Transportation and Infrastructure MacLellan told the CBC he was “ecstatic.”
An “ecstatic” Geoff MacLellan in 2015. (CBC Photo)
So the National Observer‘s scoop last Friday that MacLellan has been hired by Cline Group subsidiary Kameron Coal should not have been a surprise.
And honestly, it wasn’t to me because I’d been tipped off to the hiring two weeks earlier (I’m told his new title is vice president) but couldn’t get confirmation from either the man himself or from Morien Resources, which owns a gross production royalty on coal sales from the Donkin Mine and often makes announcements for the company.
The National Observer was unable to confirm its story with these sources either, but it did have a letter from Environment and Climate Change Nova Scotia to the Cow Bay Environmental Coalition which has been complaining about noise from the mine. MacLellan is cc’d at the bottom of the letter, “Beside his name, ‘Kameron Coal Management Limited’ and a company email address.”
The Observer hasn’t been forced to print a correction, so it looks like the report is true.
The paper doesn’t date the telltale letter, but according to this provincial press release, MacLellan’s last day as deputy minister of Intergovernmental Affairs and chair of the Halifax Regional Municipality (HRM) Housing Task Force was November 10. He became task force chair in November 2021 and deputy minister on May 2 of this year—meaning his tenure in this latter post was just under seven months.
What changed?
In short, the price of coal—it went up. And suddenly, the Donkin Mine, which had closed “permanently” in March 2020, due “solely” to “geologic conditions that are challenging,” was looking to reopen.
Rumors to that effect became public in June 2022 and the mine resumed operations in September. And at some point thereafter, MacLellan apparently received—and accepted—a job offer from Kameron.
Then on December 2, the Nova Scotia government announced it had renewed its industrial approval for the Donkin Mine for the next seven years, meaning Donkin can operate until 31 December 2029.
That MacLellan’s journey from government minister to bureaucrat to mining company executive is questionable is evident from the fact that neither he nor the company will cop to it publicly. This is the sort of appointment that usually rates a press release and a glossy photo but neither has been forthcoming.
Why is no one ready to acknowledge his appointment? I mean, besides the fact that it stinks to high heaven?
I assume at some point—perhaps when it comes time to address the next roof fall or safety violation or mass lay-off or noise complaint—MacLellan will be presented publicly as the local face of the Donkin Mine’s owners.
Lucky him?
Cutlass
Speaking of the Donkin Mine’s owners, I’ve been trying to trace the coal mine’s family tree and have discovered it has a twin—in the Arnold Schwarzenegger/Danny DeVito sense—the even more contentious Vista Mine, a massive, open-pit, thermal coal mine near Hinton, Alberta.
Both Donkin and Vista are overseen by a Cline Group affiliate called Cutlass Collieries which was founded in 2015 by “coal industry stalwart” Chris Cline after he sold his controlling interest in Foresight Energy.
In February 2019, Cutlass “tapped” Michael J. Beyer, the former CEO of Foresight, to “oversee its emerging operations in Canada,” meaning Donkin and Vista (run by subsidiary Coalspur Mines). Then in July 2019, Cline died in a helicopter crash in the Bahamas, sending Coalspur into a tailspin.
According to the Narwhal, following Cline’s death, his trust company “limited its investment in Coalspur, leaving the mining company ‘unable to secure meaningful financing’ for the mine.”
But the mine had also discovered, shortly after it opened, that:
…its planned filtration system for waste tailings would not work and it lacked sufficient capacity to store the byproducts. Receiving regulatory approval for more tailings pond capacity through the Alberta Energy Regulator was slower than the waste built up and the mine was forced to temporarily shut down on Feb. 1, 2021.
It remained closed for four months.
That coincided with high coal prices on the global market, which the company had bet against as part of a hedge with its distributor, Trafigura. The distributor called in the money it was owed on that bet — US$59.9 million, just as the mine struggled with stopped production.
In lieu of payment, which Coalspur could not afford, Trafigura seized the mine’s coal and sold it, leaving Coalspur with no ability to fund its operations and, by its own admission in court documents, an inability to attract financing in a world moving away from coal-fired electricity. It entered creditor protection in April 2021.
The Narwhal‘s account of the company’s troubles is, in fact, based on court filings related to Coalspur’s creditor protection proceedings, which had a happy ending for the company if not for all its creditors.
By February 2022, the Narwhal reported, Coalspur had “clawed its way back from the brink of financial ruin, riding a wave of high prices to an estimated $152 million in cash on hand…even while it avoided paying at least $1.1 million owed to local businesses.”
Expansion plans
Even as it was flirting with bankruptcy, Coalspur was planning a massive expansion to its operations that, if successful, will make Vista the largest thermal coal mine in North America.
Reading the saga of this planned expansion is like watching the relentless back and forth of a tennis match: first the federal government decided that it did not need to conduct an environmental review of the planned expansion because, as the Canadian Press reported, “[i]n the early stages of its development, Vista would come in just under” the thresholds that would trigger such a review.
But in 2020, the federal environment minister decided the project was close enough to those thresholds and ordered a review anyway.
But the review was challenged in court by both Coalspur Mines and the Ermineskin First Nation, which stands to benefit from the expansion. The court sided with Ermineskin, which said it hadn’t been adequately consulted by the feds, and asked the federal minister to “reconsider” the assessment.
But the minister consulted with 44 First Nations (including Ermineskin) and in September 2021, ordered the review to go ahead.
Later that year, Prime Minister Justin Trudeau announced at COP26 that Canada would end exports of thermal coal by 2030.
Then in November of this year, the Keepers of the Water, an environmental organization uniting “First Nations, Métis, Inuit, environmental groups, concerned citizens, and communities,” sent a representative with the Indigenous Climate Action (ICA) delegation to Egypt for COP27. The delegate, Daniel T’seleie, was expected to raise the issue of the planned expansion of the Vista Mine.
But wait, there’s more.
In June 2020, the UCP government of Alberta announced it would rescind Alberta’s 1976 coal policy that, according to the Narwhal, “all but prevented open-pit mines in the headwaters of the province.
But in February 2021, it reversed that decision and formed a committee to examine the issue.
The committee’s report and its recommendations were accepted by the Alberta government on March 4 of this year and “include a ban on new exploration or mine approvals, not only on the eastern slopes, but throughout the province, at least until new land-use plans are developed.”
But, a “small handful of mines” considered to be in an “advanced state” of development will be permitted to continue and they include Coalspur’s expansion of the Vista Mine.
Is this really relevant to us in Cape Breton?
Well, I think it’s worth noting that on May 22 of this year, Coalspur Mines registered in Nova Scotia as an Alberta-based extra-provincial corporation that lists Kameron Collieries as its “business name,” although the actual significance of this, if any, I don’t know.
Nor, despite my genealogical efforts, do I actually understand Donkin’s full “family tree.” For example, I don’t understand why there is both a “Kameron Collieries” and a “Kameron Coal Management,” although I do know there’s very little daylight between them—the only director listed for Kameron Coal Management is Anthony Webb who is the “Senior VP of Underground Operations Cutlass Collieries, Cline Group” and who is, I assume, the person on the right in his LinkedIn photo:
I don’t know how you can oversee underground operations in a Nova Scotia coal mine from West Palm Beach, Florida.
In short, I have a lot of questions.
Maybe I’ll ask Geoff MacLellan.
