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Hundreds of coal mining jobs to end as power company switches to natural gas

Peak workforce at TransAlta was approximately 1,500


CALGARY — Alberta power producer TransAlta Corp. says it will end operations at its Highvale thermal coal mine west of Edmonton by the end of 2021 as it switches to natural gas at all of its operated coal-fired plants in Canada four years earlier than previously planned.

The announcement will result in hundreds of mine job losses as employment drops to 40 to 50 people involved in reclamation work, expected to take about 20 years, from a peak workforce of around 1,500, said CEO Dawn Farrell on a conference call on Wednesday.

TransAlta confirmed last week it had closed a $400-million second tranche of a $750-million investment by an affiliate of Brookfield Asset Management, with the proceeds to be used to advance its coal-to-gas conversion program and other corporate purposes.

But on the call, Farrell said Brookfield’s purchase of convertible securities wasn’t responsible for the board’s decision to accelerate its coal-to-gas conversions.

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“It’s really related to, overall, the economics of producing power in Alberta on coal with the carbon tax,” she said on the call.

“We’ve currently got a $30 (per tonne) carbon tax, it’ll be $40 by next year, $50 the year after. Coal plants get less economic and they’re less flexible in a merchant market.”

The percentage of power in Alberta generated from coal has fallen from more than 80 per cent in the 1980s to less than one-third now, in part due to rising provincial government prices on carbon that began in 2007. The electricity market was deregulated in 1996, which means prices are set through competition.

“It’s good news for GHG reduction and the health of Albertans to have coal being phased out earlier,” said Binnu Jeyakumar, director of clean energy for the environmental Pembina Institute, adding coal power profitability is becoming less attractive as the costs of renewable power fall.