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  • Out Of China: Chinese Interests Will Import Chinese Miners For Their Canadian Projects 0 comments
    Oct 17, 2012 9:51 AM

    Canadians run mines all over the world using local miners. But that principle won't apply to Chinese interests who want to open four coal mines in British Columbia. Instead, the mines will employ workers from China. That fact has raised concerns about the loss of Canadian jobs and a question regarding which safety standards will prevail-Canada's or China's.

    Within weeks 200 Chinese will arrive at the Murray River coal project in northwestern B.C. to begin a 100,000-tonne underground bulk sampling. Should permits and approvals fall into place, the mine will begin production in 2015, employing approximately 600 workers. Between 400 and 480 will be Chinese nationals on two-year visas. The mine is slated to rely on Chinese underground workers until about 2025, one-third of its projected 30-year lifespan. The rationale is that Canadians don't know longwall mining.

    Murray River is one of four Chinese-staffed B.C. coal mines proposed by Canadian Dehua International Mines Group. Its hiring policy has the support of Canada's federal government, which has already approved temporary visas, and the provincial government, which sets regulations regarding mine operation and safety. Safety, along with jobs, was an issue emphasized when the United Steelworkers union broke the story in an October 9 press release.

    "The Chinese coal mine industry is probably one of the most dangerous in the world," USW Communications Officer Brad West tells ResourceClips. "The U.S. Mine Rescue Association's numbers indicate that between 2001 and 2011, 50,000 coal miners have died in Chinese mines. Is that the type of expertise the provincial government believes we need?"

    The USMRA attributes those numbers to China's State Administration of Work Safety. "That's only the ones that were reported," West says. "We believe there are many more that go unreported."

    He says health and safety regulations for B.C. miners come under the jurisdiction of the Ministry of Energy, Mines and Natural Gas, not the Workers' Compensation Board. "The Ministry of Mines is part and parcel of the same government that made the arrangement for [the Chinese miners] to come over. The government's then left in charge of their health and safety…. Based on our experience dealing with safety issues in mines in British Columbia, we don't have a great deal of confidence that the ministry is going to either be interested in, or successful in, enforcing health and safety regulations in these mines."

    West points to the Northwest Territories' Mine Training Society as an example for other jurisdictions to follow. Funded by federal and territorial governments and by industry, the program "trains people in the territories, and people who want to come to the territories, to take on these mining jobs," he says.

    "Despite the government's contention, our experience tells us there are lots of people who are interested in the security, stability, good pay and benefits that jobs in the mining industry can offer. We should be training these people to take on those positions."

    The Murray River Project is being developed by HD Mining International, a partnership in which Huiyong Holdings has a 55% interest and Canadian Dehua International Mines Group 40%, with an unnamed party holding the remaining 5%. Huiyong is a coal miner in China.

    "China has some very unsophisticated operations and some very highly sophisticated operations," says Jody Shimkus, VP of Environmental and Regulatory Affairs for HD Mining. "The safety records at the highly sophisticated mines are excellent. Our company owns and operates nine mines in China and they use the most sophisticated safety and technology available."

    (Murray River will use Chinese technology, but here's a demonstration of longwall mining using American equipment.)

    She says Murray River will pay Canadian wages and follow Canadian and provincial standards. "And mining is probably one of the most regulated industrial sectors."

    HD Mining has a long-term goal to teach longwall mining to Canadians, she says. But the company expects to rely on Chinese miners for the project's first 10 years of operation. "I'm not aware of any longwall mining in Canada, definitely not in B.C. The mining sector as a whole has a shortage of skilled labour right now. It's going to take some time to work with the local communities, the training institutions and the provincial government to get a program in place that will allow us to transfer the skill set."

    But will it really take all that time? And why hasn't training begun already?

    "There's only so much we can do," Shimkus replies. "We've been focused on trying to get the permits to approve a bulk sample and get ready for the environmental assessment process [now underway]…. HD Mining was just formed in June of last year. I wouldn't say we had a ton of time to work on this."

    The plan to train Canadians, gradual as it is, wasn't even a government requirement, she says. "We've been proactive in developing a strategy to transfer that skill set."

    But Canadian Dehua has been around a lot longer than HD Mining, which is developing only one of Canadian Dehua's four B.C. coal projects. As far back as May 29, 2007, the Vancouver Sun reported that Canadian Dehua's China-born president, Naishun Liu, wanted to bring 400 Chinese underground workers to B.C. The B.C. government knew about it. The newspaper found out from a project description filed with B.C.'s Environmental Assessment Office.

    Strong reassurances from HD Mining notwithstanding, the question remains whether hundreds of people from the same foreign culture, living and working together in a remote part of B.C., could overwhelm efforts to impose Canadian standards. Questions also remain about the other three Canadian Dehua projects which HD Mining is not involved in.

    The extent to which Canadian Dehua has acculturated to Canada might also be questioned. The Vancouver-headquartered company's Web site is riddled with garbled English, like the following account of its Murray River Project:

    Proved and inferred reserves the coal seam area is 17 square kilometers. And then, cooperate with to start the second stage of exploration. Planed 21 drilling holes and the total depth deigned is 17,890 meters. There are 12 drilling hole has been achieve the task, 6 holes is still drilling, and 3 hole is in the planning. The total footage is 14145.45 meters.

    An attempt to interview Canadian Dehua CEO John Cavanagh was blocked by a receptionist who informed ResourceClips that no one at the company talks to media. She then abruptly hung up.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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