|Morien Resources has been dewatering and rehabilitating the access tunnels to the old Phalen mine in Nova Scotia.|
The $500 million Donkin coking coal project in Canada’s Nova Scotia province finally may be moving to the commercial stage after nearly a decade under the joint partnership of U.S.-based Foresight Energy LP and Morien Resources, headquartered in Halifax, Nova Scotia. In late August, Morien and Foresight were entering into discussions with provincial officials to reach agreements aimed at ensuring Donkin’s development along the rugged Atlantic Ocean coastline of Nova Scotia’s Cape Breton Island.
Those talks were prompted by Foresight’s agreement earlier in the month to acquire Glencore’s 75% interest in Donkin. Morien, a natural resources development company spun off from Erdene Resource Development Corp. in late 2012, controls the remaining 25% of the project.
Morien had been given the right of first refusal by Glencore to match any offer Glencore received for its majority stake in Donkin. After considering its options for a couple of weeks, Morien announced it had waived its right of first refusal and, instead, would work with Foresight Energy to get the underground coal mine up and running.
“The decision by our board to waive our right of first refusal was predicated on the quality of the partner,” Morien CEO John Budreski said, referring to Foresight.
Foresight, based in St. Louis, Missouri, currently operates four deep mines in Illinois, including three longwall operations, and expects to produce about 24 million tons of coal in 2014.
Donkin is fully permitted and located within about 20 miles of a deepwater port in Sydney, Nova Scotia. Approximately $43 million has been invested in the project since 2006, including $15 million by Morien. Mining could commence at Donkin within the next year or so. The project is expected to produce up to 3.6 million tons of coking-quality coal annually.