Alberta coal mine to close; 220 jobs lost

The logo for Grande Cache Coal Corporation, which is shutting down its mine (The Canadian Press)

GRANDE CACHE, Alta. -- People in a remote, small town in northwestern Alberta are in shock after learning the Grande Cache Coal underground mine is to shut down on Christmas Eve.

More than 220 people are to lose their jobs at a time when the community is already trying to deal with about 250 layoffs at the company's strip mine and coal-cleaning plant earlier this year.

"It is devastating for us and we are still in shock as we figure out how this is going to play out," Grande Cache Mayor Herb Castle said Tuesday.

"It translates to paycheques to workers to families to homeowners to the grocery stores to the gas stations. Everyone is going to be affected here in some way."

Grande Cache Coal cited deteriorating market conditions for its decision to "temporarily suspend" operations on Dec. 24, but noted it does not have a timeline for when production might resume.

The company was taken over in September by Up Energy Development Group Ltd. after it purchased a controlling interest last fall for just $2 from Marubeni of Japan and Winsway Coking Coal Holdings Ltd.

The two firms had paid $1 billion for the mine in 2012 when coal prices were booming.

The metallurgical coal mine is one of the few major businesses in the area. Once the layoffs take effect, the town's largest employer will be the Grande Cache Institution, a federal medium-security prison.

Grande Cache Coal said it is considering building a new mine in the region sometime in the future.

"Our technical team will continue to work on developing mining plans and preparing applications for new mining permits and licences," the company said in an emailed statement. "We will prepare GCC for bigger future operations when the market returns."

Gary Taje, a spokesman for the United Mine Workers of America Local 2009, said workers have been told the layoffs are indefinite.

He said the company told the union that work on a new mine could perhaps begin in about six months, but he said his members can't pay a mortgage or feed a family on speculation.

"My members are basically all unemployed now," Taje said.

"People are leaving, looking for greener pastures. They will not be able to sit in Grande Cache and wait."

There are no job prospects for coal miners in Western Canada right now, he said, and some of his members are considering applying for jobs at a new coal mine that is to open next year in the Cape Breton area of Nova Scotia.

Castle said the community will do what it can to hang on during the economic downturn. He noted the Grande Cache area has other employers, including a forestry mill and oil and natural gas companies.

"This just may be a blip and we are hoping that coal prices will recover. We are hoping that this company will get some traction and go forward.

"This is very much out of our control."