How an investment banker helped usher in a new age of coal mining in Cape Breton
I was working in Toronto as an investment banker and one of my clients was Peter Akerley and this company he built, Erdene Resource Development, which had different assets in it. Two of the assets were the Black Point granite project and 25 per cent of the Donkin coal mine. I sat down with Peter and told him he had this collection of assets that didn’t really go together. You don’t typically have companies that have precious metals and bulk commodities in the same company. I said what he should do is spin them out into two companies and I wanted to run the bulk commodities part. Peter agreed and picked the name for the company, Morien Resources Corp.
In mining, a good deal of expense is getting to the ore. The federal government had done that by putting those two tunnels in.
What attracted me to the Donkin asset was it was a mine ready to go. In the 1980s the federal government had drilled two tunnels into those coal deposits and then stopped. In mining, a good deal of the expense is getting to the ore. The federal government had done that by putting those two tunnels in. It was those two tunnels and the deposit that had been leased by Glencore and an earlier predecessor of Morien. They were 75 per cent owners. We were 25 per cent.
The challenge was it became a non-priority for Glencore. Their plan was to sell coal to Nova Scotia Power, but they would sell it coal they had mined in Colombia. But they didn’t want anyone else to have Donkin because a competitor would come and sell coal to Nova Scotia Power. What it did was go really slow on the permitting. Our challenge at Morien was to speed them up. We told Glencore it should either develop this thing or sell it because it’s not fair to the people of Nova Scotia for them to stall this project out.
They put Donkin up for sale. I was concerned they wouldn’t have a sincere sale. So, I got on an airplane and visited about a half a dozen coal mining companies in the U.S. and said, ‘Guys, I don’t know if you’re aware of this but there is this coal project in Nova Scotia that is a mine ready to go.’ One of the groups was the Chris Cline Mining Corporation. They said it looked real interesting but they weren’t going to do it because it had other things on the go. About two years later I got call from them saying, ‘We are now engaged in this project and we are going to buy out Glencore.’
We’ve taken what was an abandoned project and were part of a process that’s creating 100 $70,000-a-year jobs in Cape Breton. This mine is going to last for 25 or 30 years. You can take a look at the parking lot at the Donkin mine and there are a bunch of shiny F150 trucks. We’re creating an awful lot of prosperity. I’m intensely proud of what we’ve done. My grandfather was a coal miner. He came from Lithuania in 1910 and was a coal miner in Pictou County. Maybe it’s in my blood.