Glencore's massive Canadian Donkin coal mine sold to U.S. firm
Glencore’s (LON:GLEN) Donkin coal project in Canada’s Cape Breton Island has been officially acquired by U.S.-based Cline Group, feeding long-standing hopes of a mine reopening.
Donkin, which involves the development of one of the largest undeveloped coal deposits in North America, could employ about 300 and produce close to three million tonnes of coking and thermal coal per year. This, if Cline and Canadian junior Morien Resources (TSX-V:MOX), which owns the 25% remaining in the project, bring the mine back to life.
Glencore and Morien have invested $43 million in the fully permitted Donkin project since 2006.The reopening of the project, located less than 30 km from the deep water port of Sydney, has been in the works for eight years, since the Nova Scotia government granted permission to get the site ready for coal production.
Devco, a former federal Crown corporation, even dug the necessary tunnels in Donkin in the 1980s. But the project was abandoned before the mine opened because of a drop in coal prices.
Morien has said it would work with Cline to advance discussions with the Nova Scotia government with the goal of gaining final approval and move project, estimated to have reserves of at least 480 million tonnes of coal, towards commercial production.
Coal has been mined in the Sydney coal basin since the early 1860s.