Gordon Loverin has waited decades to see something, anything, kick-start the economy in northwest B.C.
Like many others in the northwest, Loverin has watched investment drive development elsewhere in B.C while businesses in the northwest shut down mills and plants against the ebbing tide of a dwindling forest industry.
That is, until now.
Last month, the province approved the $404 million Northwest Transmission Line (NTL). The 344-kilometre line, which would extend north along Highway 37 from Terrace to Bob Quinn Lake, would not only bring a number of off-grid communities onto the grid, but also provide the power needed to drive a new era for the region’s resource industries.
Proponents say the project is a catalyst for development.
Loverin, co-chairman of the Northwest Powerline Coalition, believes it will drive business opportunities in the region for decades.
Investment begins with the construction of the line, which, proponents say, would accelerate development of mines and power projects.
That, in turn, would generate opportunities for service companies to supply everything from trucks, cranes and tires to beds and food to accommodate workers. Once the snowball begins to roll, Loverin believes it will cascade into other industries as well.
“You’ll see an increase in the development of new highway lodges serving the tourism industry,” said Loverin. “One of the most prohibitive expenses has always been generating your own electricity because there’s no power line in the region, so I think there’s an opportunity for tourism … created by First Nations and local residents.”
Although the NTL awaits a final green light from Ottawa, businesses across the province wasted no time last month lauding its provincial approval.
In separate releases, Imperial Metals (TSX:III), Copper Fox Metals (TSX-V:CUU), Hard Creek Nickel (TSX:HNC), Columbia Yukon Explorations (TSX-V:CYU) and Firesteel Resources (TSX-V:FTR) welcomed news the project was proceeding.
If there was any question as to what industry was likely to benefit most from the transmission line, the mining sector long ago answered it.
A 2009 report by the coalition outlined 11 potential mining projects near the power line route.
The report said the NTL could attract more than $15 billion in investment, create 10,000 jobs and generate $300 million in tax revenue for governments. Although the power line won’t generate juice before 2013, businesses have already noticed a change in the region.
Valerie Gauvin, business manager at Terrace-based contractor Progressive Ventures, said the mining industry is ramping up in the area.
“There’s at least one or two four- and five-hundred-man camps there being built as we speak … they’re coming to Terrace and getting quotes on everything from the construction to the beds they need,” Gauvin said.
Calgary-based AltaGas (TSX:ALA) confirmed 30 people were already on the ground at its Forrest Kerr project.
The $700 million run-of-river hydroelectric project will deliver power to the grid via the NTL and is expected to employ 350 to 400 people at peak construction.
Despite the activity, a lot of people in the region still wonder if the NTL is big enough to support all of the development proposed in the region.
“A lot of the talk out there is that this line is possibly too small,” said Mark Lindsay, manager at Rain Coast Cranes in Terrace.
Thanks to its vast mineral wealth, prospectors and explorers have for years referred to the area as the Golden Triangle.
According to a 2010 provincial map, there are 20 major exploration projects active in the vicinity of the NTL.
The aggregate potential power demand for the 11 projects outlined in the 2009 coalition report topped 700 megawatts.
Greg Reimer, executive vice-president, transmission and distribution, at BC Hydro, said the normal capacity of the NTL would be 260 megawatts. That’s less than half the power needed to support the 11 mining projects, but Reimer said the power line would be able to support the expected development in the area. “The capacity will depend on a number of factors such as where loads are, where power sources are located along the circuit … the work we have done so far indicates we will be able to support development.”
Pierre Gratton, president and CEO of MABC, said it all depends on how many projects come online and at what speed.
Then again, development in the region might not take off as quickly as some think.
The mining industry is welcoming only its first new major metal mine in the last decade this year, and most of the projects in northwest B.C. are in early development stages.
Although many of the projects are quite large, they’re also low-grade, meaning they’re more susceptible to the dangers of low metal prices. Galore Creek, a joint venture between NovaGold Resources (TSX:NG) and Teck Resources (TSX:TCK.B), is considered one of the region’s more valuable projects but has yet to release an updated pre-feasibility study. Interestingly, the province halted the original construction of the NTL in 2007 after the cost to build Galore Creek ballooned forcing the companies to shut down the project.
But one company that isn’t holding back on its development is Imperial Metals.
The Vancouver company’s Red Chris project has most of its permits and is only 23 kilometres from the proposed power line. Chairman Pierre Lebel believes the only two “actionable” projects in the region today are Forrest Kerr and Red Chris, and he hopes to have his mine built in time for the power line’s completion. “I’ve had no trouble telling people we’ll be the first customer,” Lebel said.
Even if only a few projects are built, Gratton said the economic multipliers generated from Red Chris, Galore Creek and Copper Fox’s nearby Schaft Creek project are enough to justify the price of the power line.
“The other thing, too, is it will attract more exploration because it’s now real,” Gratton said. “The so-called Golden Triangle has never been fully explored.”
More exploration and development activity also means more work for engineering, environmental and law firms in Vancouver. Up north, more mining activity means business for helicopter companies, restaurants and hotels that support exploration teams.
Other companies such as Bandstra Transportation in Smithers and Jock’s Excavating in Terrace told Business in Vancouver the power line means more business for them.
And even though Rain Coast’s Lindsay believes the line should be extended for future development, he, too, is keen to see the local economy rejuvenate as new investment flows into the northwest for the first time in years.
“Every year we’re optimistic here that next year is going to be a better year,” Lindsay said. “But this year we’re finally seeing that better year, even if it’s 15 years late.”
Next week: BIV focuses on how the transmission line will affect business at B.C.’s ports, and how Alaska plans to get in on the action.