Western Coal has signed a new agreement with Ridley Terminals in Prince Rupert to ensure it can ship coal from its expanding operations in Northern B.C.
The agreement will also help Ridley Terminals, a federal Crown corporation, make a case to expand capacity at its facility.
Coal production in northeastern B.C. has emerged as a major economic driver in the past several years with spinoff benefits to Prince George, considered a service and supply centre for the mining sector in Northern B.C.
There are already more than 900 people working for Western Coal at its operations in the Tumbler Ridge area, including 50 who live in Prince George.
The new agreement with Ridley Terminal amends one that was set to expire in 2015, extending it to 2020 with a five-year renewal to 2025.
Western Coal plans to increase shipments to six million tonnes by 2012, and has further expansion plans beyond that date.
Western Coal expects to ship four million tonnes of coal through Ridley Terminals this year, double its shipments in 2010.
"Western Coal's engine room of growth is in northeast British Columbia, where we continue to fuel regional economic activity through expansion of our operations including the recently reopened Willow Creek mine," said Western Coal president and CEO Keith Calder.
The amended agreement provides stability to underpin Western Coal's growth plans, he said.
"We look forward to the continuation of our strong working relationship we have with Ridley and the provincial and federal governments as we all work together to grow Ridley in support of B.C.'s economy," said Calder.
Ridley Terminals president George Dorsey said, "Western Coal continues to be Ridley Terminal's highest volume customer, and this amended long-term agreement is significant support for Ridley's expansion plans."
The issue of a potential bottleneck at Ridley Terminals came to light last month when St. Louis-based Arch Coal signed a five-year agreement to ship two million tonnes of coal this year and 2.5 million tonnes in the following four.
The latest contract would tap out Ridley's 12-million-tonnes-a-year capacity, a concern to Teck Resources which is examining a plan to re-open its Quintette mine in the Tumbler Ridge area, 150 kilometres north of Prince George.
The mine, should it re-open, would employ 350 people.
Initiatives Prince George, the city's economic development agency, has already said that expanding coal capacity at Ridley Terminals is a priority.
