The Prince Mine sits deserted in the fog at Point Aconi, N.S., near Sydney on Wednesday, Nov. 13, 2002, a year after the coal mines on Cape Breton were closed.(CP Photo/Andrew Vaughan)
INDEPTH: CAPE BRETON|
Cape Breton Coal
CBC News Online | December 14, 2005
The first mention of coal in Cape Breton came in 1672. French explorer, colonizer and Governor of Acadia Nicholas Denys declared "there is a mountain of very good coal four leagues up the river" at Sydney Harbour. He was granted the right to levy a duty of 20 sous per ton on coal extracted from Cape Breton.
In the late 1600s records show the French military mined coal from "crop openings". They literally pried coal from outcroppings on the cliffs along the shoreline using crowbars. It wasn't until the late 1700s that something was actually done to systematically exploit the resource.
Cape Breton coal made Canadian history when the first commercial coal mine in the country opened at Cow Bay or Port Morien in 1720. The first recorded export of minerals from Canada was in 1724 when coal was shipped from Cape Breton to Boston.
The first lieutenant-governor of Cape Breton, J.F.W. DesBarres, considered the mines an "inexhaustible source of revenue" for the colony. It was not to be. In 1784 he leased the mineral rights to a Thomas Moxley. For the next 50 years those rights were transferred back and forth between the Crown and various operators.
It was not a particularly profitable business. Surveys showed the mines were in bad shape because of poor mining practices dating back to the days at the fortress in Louisbourg. British law prohibited the export of coal to the United States and Cape Breton coal was twice as expensive as British coal.
The rights were finally passed on to the General Mining Association in 1826. It was a London firm that got the leases through the bad debts of a well-known member of the Royal Family.
Frederick, Duke of York, was the favourite son of King George III. He had been handed the rights by his father in 1788, but never exercised the claim. However, the Duke liked the good life and had accumulated quite a few debts. So in 1825 he went after the leases and promptly handed them over to one of his major debtors, a London jewellery firm, which set up the GMA to operate the mines.
The GMA brought better mining practices to the island, but was really only interested in the Sydney coalfield. So it surrendered much of its lease in 1857, opening coal mining to other companies. During the next four decades more than 30 mines were opened, but few were successful. The GMA held on to the Sydney coalfield until the turn of the century.
By 1875, most of the Nova Scotia colliery owners were complaining it was impossible to make money because of transportation costs and competition from lower priced American and British coal. The federal government stepped in with what was called the National Policy in 1879. It sheltered Canadian companies from foreign products and stimulated new manufacturing industries. The policy saved the mines. Through the years, federal and provincial governments continued to step in to save the Cape Breton coal industry with protective tariffs and subsidies.
The owners also decided the only way to stay in operation was to join forces and formed the Dominion Coal Company at the turn of the century. It was taken over by the British Empire Steel Corporation in 1920.
Besco lasted only eight years. It was in constant financial trouble mainly because it needed a profit of eight million dollars a year to stay in operation. In 1928 a new holding and operating company was formed called Dominion Steel and Coal Corporation. Dosco was able to bring some stability to the industry for the next 30 years.
By 1965, Dosco estimated the Sydney mines had just another 15 years of life. It concluded that opening any new mines on the existing deposits would cost too much and wouldn't be profitable. So it went to Ottawa and said it wanted out of Cape Breton coal. In 1965 and 1966 a Royal Commission headed by J.R. Donald took a look at the Cape Breton coal industry. It recommended setting up a Crown corporation to acquire and manage Dosco's coal operations.
The Donald Commission report stated "Future planning should be based on the assumption that the Sydney mines will not operate beyond 1981." On July 7, 1967, the Cape Breton Development Corporation was established to phase out the coal mines and find new employment opportunities.
On March 30, 1968, Ottawa expropriated the Dosco coal mines and later
settled with the former operator for almost $12 million. In 30 years
the federal government spent hundreds of millions of dollars more
keeping the mines in operation.
From the beginning Devco was supposed to pay its own way, but that
wasn't the case. There were numerous government bailouts with the
company promising to stay on budget and within business plans. Those
promises never seemed to work out, something got in the way.
There were roof falls that shut down a mine, extra money needed to replace old equipment or just the lack of production. It seemed things were looking up with the energy crisis of the early 1970s. Nova Scotia Power cut its dependency on foreign oil by converting to Cape Breton coal. Here was a huge local customer, but by the 1990s Devco was having trouble meeting the demands of the contract.
During some periods Nova Scotia Power had to import coal to maintain
its electrical generation.
The peak production of Cape Breton coal came during the 1940s, but
production steadily dropped after the end of the war. By the 1960s only
half the original mines were still producing. In all, roughly 100 mines
have operated in the Sydney coalfield through the past two-and-a-half
centuries, an astounding span in mining terms.
In the 1980s, Devco spent $100 million developing the Donkin coal mine near Glace Bay. It abandoned the project before any actual mining began when coal prices fell. But by the new millennium, prices had rebounded. In December 2005, a Swiss company won the right to develop the Donkin mine – a project that could result in hundreds of new mining jobs.