Environmental protection key to northwest BC coal mine plan

Coal mine plan in the Klappan will provide jobs, economic benefits

Dear Sir:

Fortune Minerals wishes to provide clarity with respect to the proposed Arctos Anthracite Project in response to the guest column published on April 24, 2013 (“Fortune Needs to abandon its mine plan”).

The Arctos Anthracite Project is one of the world’s premier metallurgical coal projects and is owned by the Arctos Anthracite Joint Venture (AAJV), a partnership between Fortune Minerals Limited, a Canadian company based in London, Ontario, and POSCO Canada Limited, a subsidiary of South Korea’s POSCO, one of the world’s largest steel producers.

Anthracite coal is an organic, non-toxic material derived from plants that existed millions of years ago that has undergone a transformation to coal after burial. Anthracite is the highest quality coal – ideal for use in steel production and metal processing, but also diverse uses including carbon filters for water purification and gasification for the production of synthetic fuels, plastics and fertilizers.

The AAJV recently submitted a revised project description for the proposed development of Canada’s first anthracite mine. This revised project description is based on a development scenario that, in addition to the mine and wash plant, involves extension of the existing Dease Lake railway line through a transportation corridor that was constructed by the B.C. government in the 1970’s.

The submission formally restarts the Environmental Assessment (EA) process that is designed to assess the merits and impacts of the project from a balanced perspective that addresses environmental, social and economic considerations. An essential part of this process is the interaction with the communities to understand and address concerns and issues surrounding the project. These concerns can then be addressed through project design or mitigation practices to eliminate or minimize potential project impacts.

There are many important distinctions between coal mining and base and precious metal mining that are noteworthy. Arctos will not produce slurry tailings and therefore the project will not have a tailings pond. The Company plans to move large volumes of rock, but the industry has a record of progressive rehabilitation and reclamation that will be part of a closure plan required for development. At mine closure the land will be re-contoured and revegetated in consultation with aboriginal groups and regulators to look very much like the condition of the land before the commencement of operations.

The aforesaid column implies that there will be harm to rivers and fish near the proposed development. Environmental impacts were incurred in the 1970’s when the B.C. government constructed the existing railway roadbed. However, environmental standards at that time were not as rigorous as today and there is an opportunity to improve the fishery by replacing some perched culverts that are now interfering with fish migration.

The AAJV will operate within all environmental regulations to ensure no significant impacts on water quality. The mine is being designed to minimize environmental impacts and includes a coal wash plant that recycles 95% of the process water. Water quality in nearby Didene Creek will be protected. Additionally, because of a natural waterfall barrier, the creek in the vicinity of the mine development is not fish bearing. No part of the mine will affect the Skeena River; only the railway passes through this valley. Neither the mine nor the railway impacts the Nass River or its watershed.

The column referenced Shell’s former coal bed methane (CBM) project and B.C. government’s recent restriction on petroleum and natural gas development in the Klappan area. Coal mining is specifically not included in this ban, which recognizes the smaller footprint of coal mining, the significant economic importance of coal mining to the B.C. economy, different economic and environmental impacts, and the significant investment that the AAJV has already made in its proposed development.

The AAJV is committed to the sustainable development of Arctos for the benefit of nearby aboriginal communities and for all stakeholders. This translates into jobs and revenue for the area. When up and running, the project will create more than 500 high-paying jobs and another 1,000 secondary employment jobs in supporting businesses and services.

While the column noted that, “community members turned down jobs,” Arctos has actually received hundreds of resumes from members of the Tahltan and Gitxsan communities seeking employment. Over the anticipated a 25-year mine life Arctos will generate more than $10 billion in revenues and $900 million in combined federal and provincial taxes. In addition, completion of the Dease Lake railway line to the mine site will provide lasting legacy infrastructure that will benefit communities, other businesses and British Columbians long after the Arctos project is completed.

Substantial engineering, feasibility and environmental work have already been completed for the proposed development, with expenditures to date totalling approximately $100 million. An additional investment of around $800 million is required to develop Arctos and establish it as a model of cooperation and an environmentally sustainable development.

We encourage anyone in the community with questions or concerns to contact Carl Kottmeier, Project Manager, at ckottmeier@fortuneminerals.com

Troy Nazarewicz,

Fortune Minerals Limited,

London, Ontario, CANADA