Last September, when Ann Marie Hann became president of the Coal Association of Canada (CAC), she took the lead in an industry that faces an uncertain future. By the numbers, the Canadian coal industry is in good health: production is expected to keep growing, as nine new projects are in the pipeline, and exports increased by 22 per cent in 2010 to meet the Asian market’s growing demand. Within Canada though, the prospects for coal are less clear, as the federal government is targetting the emission levels of coal-fired power plants across the country in an effort to reduce greenhouse gas emissions. An ex-deputy minister in the government of Newfoundland Labrador and past-president of the Propane Gas Association of Canada, Hann has been busy in her new role, setting the course for the CAC and leading the discussion about coal.
CIM: What are the top three goals you want to achieve as CAC president? How are you going to do this?
Hann: The first thing I did when I arrived was develop a three-year strategic plan, which had four goals. A very critical one is positioning the association to be the source for relevant information about coal. We launched a website earlier this year, and are about to finish the first economic study done for the industry in a considerable period of time. Another important goal is making sure that we have an effective voice on issues that affect us, and to make sure that when the government works on regulations that affect coal, it automatically reaches out to the industry, as opposed to the industry not being involved in the up-front development and ending up caught in a reaction mode. Having worked in government for many years at the senior level, that knowledge of how government works will be very helpful in government relations and advocacy work.
CIM: In 2010, Canada produced 40 million tonnes of thermal coal, mostly for its own domestic use, and 28 million tonnes of steel-making coal, mostly for export markets. How will global growth affect each of these? Should we expect a shift in their relative importance?
Hann: The medium- to long-term forecast is quite strong, particularly in the Asian marketplace. There are significant plans by Canadian producers to increase their metallurgical and thermal coal output, and considerable capital investment plans are underway by the transportation chain, i.e. railways, ports and terminals, to ship increasing amounts of products.
The domestic challenge is that Environment Canada has a regulatory proposal which, if implemented, would come into effect on July 2015 and substantially tighten emissions standards for coal-fired electricity generation. Currently, no Canadian power plant using coal can meet the standards, because the technology is not yet commercially proven or available worldwide. If thermal coal is to continue being used, there will have to be substantial efforts in terms of technology development. Failing that, you will probably see more interest in coal being exported. The challenge will then be: can miners economically change from supplying domestic power plants to shipping that coal to port? For some of the mines, that won’t be an economical option.