DELTA, CANADA - APRIL 23: A train containing a load of coal is delivered to Westshore Terminals in Delta, B.C. April 23, 2013.Jeff Vinnick/The Globe and Mail
Vancouver billionaire Jim Pattison has boosted his bet on a shipping terminal that has been rocked by the threat of an export ban on thermal coal.
Mr. Pattison is already the largest shareholder in Westshore Terminals Investment Corp., which runs the coal-export facility located south of Vancouver. He acquired another 724,600 Westshore shares over the course of four business days from May 4 to the May 9 provincial election date, according to regulatory filings.
The legendary businessman has nearly doubled his stake in Westshore over the past five years, steadily acquiring shares during a roller-coaster period in coal markets. Thermal-coal prices have declined again in recent months.
Mr. Pattison has raised his stake in Westshore even as other investors flee amid worries about the potential ban on thermal coal exports. He owns nearly 21.6-million shares valued at $418-million, or a 29.5-per-cent interest in Vancouver-based Westshore.
During the election campaign, B.C. Premier Christy Clark wrote a letter to Prime Minister Justin Trudeau on April 26, asking him to prohibit exports of thermal coal from B.C. ports. The commodity, which goes into coal-fired plants to generate electricity, is shipped from British Columbia to electric-utility companies in Asia.
On May 2, Ms. Clark said if Ottawa doesn't take action, her BC Liberals will slap a hefty carbon levy on thermal-coal exports from the province.
Westshore shares have fallen sharply on the news of Ms. Clark's opposition to exports of thermal coal, which is produced from mines in both the United States and Canada. She announced her position in retaliation for the Trump administration's decision to slap punitive tariffs on Canadian softwood-lumber shipments into the United States.
On April 25, Westshore shares closed at $26.11, but they have tumbled 26 per cent since then. The stock gained 27 cents to finish at $19.36 on Friday.
Mr. Pattison made his stock purchases from May 4 to May 9, at prices ranging from $22.70 to $23.12. The 88-year-old billionaire also picked up 5,000 Westshore shares at $20.71 apiece on May 12, undaunted by political turmoil in British Columbia.
The Liberals won 43 seats in the provincial election, outpacing the NDP's 41 seats, while potentially leaving the BC Green Party holding the balance of power with victories in three ridings. The final seat count is set to be determined soon, with the BC Liberals hoping to wrest one seat from the BC NDP in the closely contested Courtenay-Comox riding, where absentee ballots will be tallied this week.
BC Green Party Leader Andrew Weaver hopes Ms. Clark and Ottawa will clamp down on thermal-coal exports, saying action is long overdue.
Federally owned Ridley Terminals Inc., located in the Port of Prince Rupert in northwestern British Columbia, handled 2.2 million tonnes of Alberta thermal coal last year, accounting for 55 per cent of the coal facility's total exports.
In 2015, Westshore saw 9.1 million tonnes of thermal coal (predominantly from Montana) go through its Roberts Bank facility, accounting for 32 per cent of the site's exports. Last year, exports of thermal coal through Westshore fell to 6.3 million tonnes, or one-quarter of the terminal's total volume.
Westshore has sent a letter to Mr. Trudeau, urging him to reject Ms. Clark's request for the ban.
"We have handled our customers' coal in a safe and environmentally responsible manner for more than 47 years and today provide more than 300 family-supporting, unionized jobs," said the letter, signed by Westshore chairman William Stinson and vice-president Glenn Dudar.
Environmentalists point out that Washington state and Oregon don't have coal-export sites, forcing U.S. producers to look to Canada.
Proposals to ship thermal coal to Asia from the U.S. Pacific Northwest have hit a dead end, said Clark Williams-Derry, director of energy finance at the Sightline Institute, a Seattle-based environmental think tank. "Intense local opposition, combined with lousy economics, has essentially ended the industry's hopes of building coal terminals in Washington and Oregon," he said.
Westshore has issued a statement titled Facts About Coal. "The 9.1 million tonnes of thermal coal shipped through Westshore in 2015 represents less than one per cent of global thermal-coal exports," Westshore said. "Banning U.S. coal through B.C. ports will have no impact on thermal-coal consumption globally. Power plants will source the coal elsewhere and Canada will lose the economic benefits to other countries."
Westshore added that shipments of U.S. thermal coal aren't squeezing out Canadian metallurgical (or coking) coal, which is a key ingredient for making steel.
Vancouver-based Teck Resources Ltd. is the largest customer at Westshore, exporting B.C. metallurgical coal to steel producers in Asia.
"Canadian customers continue to have access to terminal capacity through Westshore and other alternative ports, and there remains excess port capacity for Canadian mines to export coal," Westshore said in its statement.
Brent Jang