May 19, 2020

Why Atrum Coal's Groundhog Anthracite project in Canada is so profitable

Canada
British Columbia
mining
Finance
Eric Harding
3 min
Why Atrum Coal's Groundhog Anthracite project in Canada is so profitable

A new US$600 million anthracite coal mine has been developed in northwest British Columbia by Australian miner Atrum Coal, which invested US$40 million into the project.

As was reported in our sister site Business Review Australia, Atrum’s Groundhog anthracite project has resources of over 1.5 billion tonnes of ultra-high grade anthracite, which is the commodity used in making steel, ferro-alloys and specialty industrial markets.

While the majority of metallurgical coal is first turned into coke before being used in making steel, Anthracite is the highest grade coal in the world because it doesn’t need to be transformed into coke first. Unlike regular metallurgical coal, anthracite coal prices have remained twice the price of regular met coal through the struggles of the industry.

RELATED TOPIC: What the top 5 mining companies in Canada are doing differently

Because of this, Atrum expects a strong demand for the low-ash, low-volatile anthracite. The commodity has already received strong interest in Brazil and North America from potential consumers of high-grade anthracite.

Atrum vice president of marketing and business development Peter Doyle believes the deposit in and around the Groundhog mine is the largest undeveloped anthracite deposit in the world, and has the potential to become multiple underground mines.

In addition, Canada’s investment climate for mining is admittedly better than it is in Australia.

“Why do we as Australians believe Canada has the advantage? Basically, there is great coal here, there is great infrastructure here, but moreover, the government supports us here,” said Doyle.

RELATED TOPIC: An outlook on the current state of Canadian mining

The project includes a 5.4 million tonnes per annum (Mtpa) run –of-mine (ROM) underground operation, and is believed to have a mine life of 38 years. Site preparation work began in July 2014 with the goal of clearing the site to allow movement of the heavy equipment. Commercial production is anticipated to begin in the second half of 2016.

Atrum Coal signed a binding equipment finance agreement with China Coal Technology & Engineering for the supply and finance of mining equipment for the project. Under the agreement, CCTE will provide US$100 million for the first stage of production finances in addition to supplying the mining equipment.

It also proposed to provide US$250 million to expand the underground mine to 5.4Mtpa steady state production beyond 2017 production rates, and finance further mine expansions in the Groundhog North zone.

RELATED TOPIC: The top 5 mining companies in Canada who are doing it right

Atrum has long-term plans of developing several underground anthracite coal mines, and intends to complete the process by transporting the coal through the Port of Stewart. The company has already signed a memorandum of understanding (MOU) with the Stewart World Port to move five million tonnes of shipping capacity each year.

Stewart is located just 150 kilometres frm the mining site, but there is a plan in place to build a railway link to allow the coal to be transported by rail to an existing road before being moved by truck since there is no direct connection between the two.

Anthracite sells for US$175 a tonne in Europe, while the met coal price of US$90 per tonne is less than a third of what the price was four years ago.

Let's Connect!

 

Read the latest edition of Business Review Canada!

 

Share article

Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Tax
Compliance
financeleaders
Deloitte
Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

Share article