DANA POINT, Calif. — Canadian National coal traffic, already up sharply this year, will continue to grow this fall and winter as export coal production ramps up at mines in Western Canada.
“Coal is a huge opportunity for us,” Paul Butcher, CN’s vice president of investor relations, told an investor conference this week.
Conuma Coal’s Willow Creek mine near Chetwynd, British Columbia, and CST Coal’s mine in Grande Cache, Alberta, both reopened recently and will begin shipping metallurgical coal soon.
Willow Creek will have an annual capacity of 1.7 million tons, while CST will have an annual capacity of 2 million tons, with the potential to reach 4 million tons. Their combined output will boost CN’s metallurgical coal export traffic in Western Canada by more than 75 percent.
Coalspur’s new Vista mine, near Hinton, Alta., is expected to open early next year. The mine has the potential to be one of the largest export thermal coal mines in North America, Coalspur says.
The Vista mine’s annual initial production will be 6 million tons, a figure that could eventually double, CN says.
“We’re all very excited about this,” CN Chief Financial Officer Ghislain Houle told the conference.
Most of the coal produced in Western Canadian mines is exported to Asian markets via the Port of Prince Rupert, B.C.
To support growing intermodal and bulk traffic at the port, this year CN is adding or extending five sidings on its single-track route to Prince Rupert. One siding is in service now, with the remaining four due to be completed this fall.
CN’s coal volume is up 17 percent so far this year, according to the latest data from the Association of American Railroads.
CN’s U.S. export coal business also is taking off amid strong global demand.
CN handles unit trains of thermal coal mined in Southern Illinois for export via Convent, La., and Mobile, Ala. It’s moving the coal at a pace to hit 10 million tons this year, up from four or five million tons a few years ago, Houle says.
The coal is primarily bound for Western Europe, but the Convent terminal is expanding into emerging markets in North Africa, India, and Turkey, CN says.
Houle and Butcher spoke at the Morgan Stanley Sixth Annual Laguna Conference on Sept. 12.
