Morien Resources, which already controls a 25% interest in the Donkin coal project, is looking to buy the remain-ing 75%
from Xstrata Coal and bring coal mining back to Nova Scotia.

Morien already controls a 25% interest in Donkin that it acquired from Erdene, based in Dartmouth, Nova Scotia, just across a bay from Halifax, the largest city in Atlantic Canada. Purchasing Xstrata’s share would give Morien full control over the fate of Donkin, an underground mine that would produce about 3.6 million tons of high-quality steam and coking coal annually after it begins commercial operation in 2015.

Xstrata announced plans about a year ago to sell its portion of Donkin, saying, in essence, that the project was not large enough to suit its business strategy. At the time, Xstrata said it expected to announce a transaction by the end of 2012. But last year came and went with no Donkin sale. Now, more than a quarter of the way through 2013, Morien, eager to move the coal mine project along, has decided to step up and fill any sales void Xstrata may be encountering.

“Morien continues to stand ready to take on a more active role with its potential part-ners should the Xstrata sale process fail to proceed in a favorable conclusion,” Morien CEO John Budreski said in late March.

That “active role” includes negotiations with Xstrata to buy Donkin, according to Kenneth MacDonald, vice president of business strategy and CFO for Erdene and a Morien executive. “From the beginning, we have been looking at a strategy to cover all options, including acting on our own or acquiring the interest” of Xstrata.

Morien is not going in totally alone, however. Sources close to the project said Morien is working with a number of coal purchasers and financiers to assemble a group that would actually enter into a sale agreement with Xstrata. Whether that is Morien’s first preference is uncertain. But clearly Morien is getting impatient while waiting on Xstrata to find a buyer.

After unofficially launching the sale process in April 2012, Xstrata is believed to have talked to several potential pur-chasers. Still, no deal had been reached by late March. “Somebody could come back in,” a source said. “Any sale process always leaves the door open.”

So far, Xstrata’s lingering sale process has not affected Donkin’s timetable, MacDonald said. “No, I don’t think any-thing is insurmountable yet,” he said. “You can always expedite things later on.”

Morien is anxious to have a final answer on Donkin. “Right now, it’s a work in progress,” MacDonald said. “Our timetable is as soon as possible but, unfortunately, we’re at [Xstrata’s] mercy.”

Most likely, Morien would look to sell Donkin’s coking coal overseas, probably in Europe. The steam coal would be market-ed domestically, possibly to NB Power, for-merly New Brunswick Power, or Nova Scotia Power.

Once a major coal producer, most min-ing in Nova Scotia these days is done by Pioneer Coal, with headquarters in Anti-gonish, about 30 miles from Cape Breton. Donkin would change that, in a big way.