Coal and the Job Market

Research Source

With rather disappointing jobs information continuing to flow from south of our border, it was a pleasant surprise to beat employment growth estimates in Canada. Canada's economy is resource based and the energy and mining industries are doing well. I've been around long enough to have seen three of these cycles, starting in the early 80's and now working on the fourth cycle.

With energy and mining in again overdrive, I recall some the good fortune that I have had from a variety of experiences in the coal business.  A few examples.

1990, 5 yr and 25 yr conservation and reclamation planning for TransAlta mine mouth operations - I asked the question - why would you spend $20k/ac to create the tabletop landscape that generates $800/ac land value? I suggested that an undulating landscape (a function of the mining process), a potential wildland landscape with diversity in terrain, soils and cover, aspect, drainage, etc. might well have significant 'value' in the long term.

1992, Electricity Generating Authority of Thailand, mine mouth operations and reclamation planning that included the alternative of designing the end use landscape to be favourable for replanting to a rubber plantation and thus a contributor to the local economy.

2005, End Pit lake Development at TransAlta's Centralia operations in Olympia, WA State. A very deep hole.  A challenge with circulation and highly stratified chemical, temperature, nutrient, and light isopleths.  Discharge water to important breeding stream for steelhead trout and a need for wetland compensation.  Complex regulatory discussions were the highlights of the day.

2006, Lodgepole Project in the Flathead Valley, SE BC (Map Insert Above). Located within what is considered some of the best Grizzly habitat in the Rockies, featuring enviable redd counts for Bull Trout and westslope cutthroat trout - both threatened species, and a transitory mountain goat population with an important mineral lick in the mineable area, the challenges were many.

Dow Jones US Coal Index (Chart Source)

The coal business continues to look promising - though it is certainly linked to the productive capacity of the growing economies, wherever that might be in the world today. Canada's coal quality is much sought after and prices have been encouraging over the last weeks.

What does the future look like?  There are many opinions on where the global economy might be going in the next 3-5 years. Some opinions believe the commodities bull has had its run and is set for a break, others are saying China has maybe two years left in their (unsustainable) growth model. Can good single digit growth across Brazil, India and China make up for the more sluggish developed economies? Throw in Europe just for fun. Nothing more need be said. Yields on Greek gov't 5yr bonds is over 20% again with Portugal, Spain and Ireland not too far behind, again. The overall global economic picture has become so complex - the more I learn, the more fascinated I become - but at times, also rather frightened as well.

So, is this the 'right' time to enter the market and place your bet on the continued strength of the commodity bull?  The coal business is hiring.  Is now the time to take advantage of this next surge in resource profits?  The center of Canada's mining business is in Vancouver.  Vancouver is an expensive place to live.  It rains way to much for my liking, or is that just a contrived perception?  The mountains are so close for .... well just about everything mountains are and do.  Living by the ocean would be fabulous, particularly for the cooking ingredients.  I suppose that might be until the first tsunami, but for Vancouver, the Island would likely be the real casualty.  But then earthquakes along the west coast are a risk in an of themselves.  Lots to consider and explore.  And lots to watch and learn in the coal market as well.