HD Mining bulk samples controversy in BC

HD Mining wants to develop an underground coal mine in northern B.C. The resource on its property is as good as it gets in the coal world — high-quality metallurgical coal, the kind used to make steel — and there’s enough of it to support a mine for at least 30 years.

On the surface it’s a great news story, especially because the nearby town of Tumbler Ridge was custom-built to support coal mining. In a 1981 deal with Canadian mining companies and several Japanese steel mills, the B.C. government agreed to build a town, two sections of highway, a power line and a branch rail line to support coal mining in the area. Within a year, the town of Tumbler Ridge was built and populated, and two coal mines were in production. 

Then coal prices failed. The mines reduced output and cut jobs, property assessments in Tumbler Ridge tanked and people began leaving the area. From a peak of 4,790 in 1991, Tumbler Ridge’s population dropped below 2,000 by 2001. By 2003, both mines had ceased operations and the custom-built coal town was struggling to survive.

When coal prices began recovering, Tumbler Ridge residents welcomed the renewed interest in high-quality coal. Now HD Mining’s all-but-certain move to build a new mine (the company is waiting for final permits) has Tumbler Ridge on the road to economic recovery.

But the road is far from smooth. HD Mining is facing criticism over its efforts to bring 200 underground miners from China to staff the Tumbler Ridge operation for the first four years.

The company says it tried finding experienced Canadian miners, but none fit the bill. The unions representing Canada’s miners see things differently — and are in court trying to get HD’s permits for Chinese workers revoked.

The two sides in this battle tell opposite stories. HD, a private company that’s 55% owned by Chinese firm Huiyong Holdings and 40% owned by Canadian company Dehua Lyliang International Mines, maintains it has no choice but to bring in temporary Chinese labourers to staff its mine — for years — because there are no experienced underground coal miners in Canada. The unions say there are suitable applicants in Canada, but HD would be employing cheaper imported labour.

The latest judge to weigh in on the battle ruled in favour of HD. The company also enjoys strong support in Tumbler Ridge. The political push that allowed for HD’s permits to be issued, however, now seems to be waning. The HD case is the latest in a string of controversies from the Temporary Foreign Worker program, and the federal government is reviewing the entire program.

HD Mining says it tried but failed to find qualified Canadian workers for its project. Murray River will be an underground mine that extracts coal using a technique known as longwall mining. In longwall mines, a panel of coal 1 metre thick and as much as 4 km long is mined in a single slice. The slice is removed from the mining face, and the roof and overhanging rocks collapse into the void.

Underground mining is usually complicated, and longwall mining is no exception. Longwall mines require highly trained operators and specialized machinery, neither of which are readily available in Canada because most coal mines in Canada are surface operations.

“HD Mining has made ongoing efforts to recruit the qualified workforce required for mine construction of our bulk sample,” the company writes in its employment transition plan. “However, our recruitment process continues to show an extreme shortage of underground coal mining skills in Canada.”

The document notes that while temporary foreign workers would fill the openings for underground miners, the project also creates new jobs for Canadians in other areas, including electricians, parts clerks, construction contractors and support services.

But HD says it was forced to look abroad to find experience for its specialized underground mining openings. After finding skilled candidates in China, HD applied for and was granted 201 permits through the federal government’s Temporary Foreign Worker program. A dozen of these workers have arrived in Tumbler Ridge and are studying English at the local college. Another 60 are expected before the new year.

Two Canadian unions don’t believe HD’s mine fits the program, which allows temporary foreign workers if there are no Canadians available to do the work. As such, the International Union of Operating Engineers and the Specialized Workers Union are challenging HD’s temporary foreign worker permits in court, which is expected to take two to three months.

In the meantime, the unions asked the federal court for an injunction to stop HD from bringing more Chinese workers — including the 60 arriving imminently — until their larger challenge against the permits can be heard.

On Dec. 14, a federal judge rejected the injunction request. Judge James Russell said HD Mining followed all the rules when applying for its foreign worker permits, and that suspending the permits would work against the public interest by leaving the workers who “acquired all that our system says they need to come to Canada” in a legal and professional limbo.

Russell also said the unions’ case was speculative and did not prove that the imminent arrival of the next 60 Chinese miners would cause “irreparable harm.” He wrote in his ruling that the unions had failed to provide clear and convincing evidence that there are Canadian miners who are willing, able and qualified to do the work the Chinese miners have been hired for.

The ruling clears the way for HD to bring the remaining 200-plus miners to Canada over the coming months.

Looking ahead

According to HD Mining’s employment transition plan, it would be 14 years before the Murray Ridge mine is staffed completely by Canadians. HD does not plan to hire any Canadian miners for the first four and a half years because the company says it needs experienced miners to ensure that the mine is built properly, which would take 30 months. After that it would replace 10% of its foreign staff with Canadians annually, so the full transition would take another 10 years.

HD says it wants to hire Canadians as soon as possible to work in its mine, but cannot do so until programs to teach the necessary skills are available. HD is working to set-up training, and signed a memorandum of understanding with Northern Lights College to develop an underground mining training and education program.

Planning for the program is still in its early stages. Since the college needs to develop a curriculum and suitable training facility, it is not expected to accept students until late 2014.

Standing its ground

With attention on the situation growing daily, HD recently stepped up its defence against charges that it is misusing the Temporary Foreign Worker program.

On Dec. 13, the company distributed two separate letters to the media, one accusing the United Steelworkers Union of discrimination and the other warning the federal government that HD is considering suing for civil damages after federal ministers made public statements about the company.

As to the discrimination accusation: in a letter to the Canadian Human Rights Commission, one of the 17 Chinese workers already in Tumbler Ridge alleges that the Steelworkers union has violated his rights. Huizhi Li says statements on Steelworkers’ leaflets and on the union’s website “are likely to create contempt for Chinese persons and in particular Chinese mining workers.”

Li’s letter to the commission bore HD Mining’s letterhead.

Union spokespeople rebuffed the claim, arguing the union is not against foreign workers in general but is simply doing its job, which is to fight for the rights of Canadian workers. The union also says that if HD needs to reach out internationally to
staff its mine, the company should be sponsoring foreign workers as potential immigrants to Canada, instead of bringing each worker over for a maximum of two years.

In another letter, HD warned it is considering a lawsuit against the government out of concern that statements made by two federal ministers might influence the judicial review of HD’s foreign worker permits.

In November, Human Resources Minister Diane Finley said the government was “not satisfied” with what it had learned about the process by which HD earned its 201 foreign worker permits, and suggested the company did not make sufficient efforts to recruit Canadians.

A few weeks later, Immigration Minister Jason Kenney called the timing of HD’s use of the Temporary Foreign Worker program “highly inappropriate.” The federal government is reviewing the entire temporary foreign worker permitting process.

HD also says that accusations the Chinese workers will be paid reduced wages are untrue. Company spokesperson Jody Shimkus says workers would be paid between $25 and $40 an hour, with total annual compensation totalling $84,000 to $113,000, including pay, benefits, housing and food.

HD is not alone in defending its virtue. The residents and businesses in Tumbler Ridge appear to support HD Mining — and all the investment it is bringing to town. For example, the company recently cut the ribbon to open a $15-million, 92-unit townhouse development designed to house mine workers.

A group of businesses that have enjoyed the benefits of HD’s presence in the area recently banded together to support the company during this legal battle.

They launched www.friendsofhdmining.com, which lists local trucking, construction and restaurant operators who believe the furor over foreign workers has overshadowed the positive impact of HD’s project.

James Rea — CEO of Triland International, which built the housing project for HD — is part of the support group, and has spoken with media outlets with the message that many of the things being said about HD Mining aren’t true.

Rather than skirting the rules and bringing in cheap foreign labour, James Rae says HD has done everything by the book, and simply cannot find skilled underground-machine operators in Canada.

Murray Ridge

The Murray Ridge project hosts 3.18 billion proven and probable tonnes of metallurgical coal reserves. Initial mine-site development will focus on the first plot, which contains 688 proven reserve tonnes.

The project is not yet fully permitted for development. In March 2012, the B.C. government issued a bulk-sample permit. HD has not mined the bulk sample yet, but site development is underway.

If the bulk sample produces expected results and the mine achieves a permit, the operation is expected to produce 6 million tonnes of coal annually for 30 years.