Company behind proposed Manitoba frack sand mine says project delayed by 'terrible market,' but not dead - Action News
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Manitoba

Company behind proposed Manitoba frack sand mine says project delayed by 'terrible market,' but not dead

A controversial Manitoba developmentthat would extractsand for use in major fracking operations has been delayed because it would cost too much money, says the company working on the proposed sand mine.

'Isn't a market in this world anymore' for projects like Canadian Premium Sand mine: Wilderness Committee

A frack sand mine slated to begin production this year near Hollow Water First Nation has been delayed until 2022, after the company behind the mine said the price of the development became too high. (Matthew Brown/Associated Press)

A controversial Manitoba developmentthat would extract silica sand for use in major fracking operations has been delayed after costs became too high.

The company behindthe proposed massive frack sand mine near Hollow Water First Nation, along the east shore of Lake Winnipeg, is now holding off after the expected $120-million price tag for the project ballooned to $220 million, Canadian Premium Sand saidin a news release this week.

The head of the companyiswondering if the companycould even find thatmoney currently, asthefossil fuel industryis under fire over environmental concerns.

"Inall honesty, it's such a terrible market to raise money right now particularly for anything related to Western Canada, and more specifically anything related to oil and gasthat weprobably couldn't raise the money anyway," Glenn Leroux, president and CEO of Canadian Premium Sand, said in an interview with CBC News.

Production was slated to begin this year, but Canadian Premium Sand now says it is being delayed until 2022.

The firm was originally counting on business fromAlberta oil sandcompanies, which have in past purchased fracking sandfromexisting deposits in Wisconsin.

Leroux says he still has confidence the project will proceed, though.He says the company has settled on a newdesign at $120 million that it can afford.

He's also says the market is stabilizing, and he's bullish on the price of silica sand bouncingbackoncethe U.S. market recovers.

Fossil fuels still needed: CEO

"With somepipelines built and with a little more rational thinking in the sector, the finance world [will] see that energy is going to be required, whether there's a transition away from carbon or not. It's not a light switch," Leroux said.

"That reality is starting to set in. People are having more rational thoughts and conversationsabout the energy sector and how long it's going to take to transition."

The development willdig for high-purity quartz sand that drillers need to frackfor oil and gas. Silica sand can also be used forglassmaking, metal casting and chemical production.

Critics say the proposed mine would create health and water quality problems, such as exposure to tiny sand particles described as a cancer risk.

The company has rights to more than2,700 acres of land with an estimated resource of 600 million tonnes.

The development has divided people in Hollow Water, the community adjacent to the future mine site.

The First Nation's leadership has previously said it was in favour of the project, with Chief Larry Barker signing an economic agreement with Canadian Premium Sand in late 2018 that would bringemployment, contracting and trainingto communitymembers. Itwas previously estimated that the mine would create150 jobsfor the next half-century.

Meanwhile, community members in oppositionstarted a small peace camp Camp Morningstar which will mark its one-year anniversary onFeb. 15.

'Ecological devastation': critic

While the project received itsenvironmental licensing from the Manitoba government last year, environmental groups have also slammed it.

The Wilderness Committee of Manitoba is calling the project's delay a victory.

"It's a real relief to knock one more bad fossil fuel idea off our desks so that we don't have to worry about it," said Eric Reder, a wilderness and water campaigner with the group.

The organization's complaints are wide-ranging, but major issues include concerns over the mine's effects onwater and the vitality of endangeredspecies, as well asthe firm's ability to meet theenvironmental conditions the province has set.

Rederarguesit's foolish to pursue this project when the world isturning away from fossil fuels.

"We would go through this tremendous amount of energy and ecological devastation for a project that they said was going to make money for 52 years, butwithin a couple of years most of the oil and gas companies will be in financial ruin," he said.

"There's just simply isn't a market in this world,an appetite in this world, for this type of development anymore."

In its original plan for the mine, Canadian Premium Sand said it expected to restorefive hectares of land each year whichhad been processed the year before.