Westshore B.C. coal port hit by strike threat

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Westshore Terminals [WTE-TSX] said its Westshore Terminals LP unit has received a 72-hour strike notice from Local 502 of the International Longshore and Warehouse Union (ILWU), related to Westshore’s coal export terminal at Roberts Bank, British Columbia

The strike notice states that members of Local 502 will commence strike action against Westshore, starting on September 16, 2022. The stoppage would result in the complete suspension of operations at the terminal.

Westshore has been in negotiations since October, 2021, with local 502 for a new collective agreement. The previous collective agreement and those of two other ILWU locals at the terminal expired on January 31, 2022.

Westshore Terminals is Canada’s premier coal export terminal and handles over 33 million tonnes of coal annually. The Westshore Terminals Ltd. partnership is owned by Westshore Terminals Investment Corp.

Negotiations have involved conciliation/mediation under the Federal Labour Code since March 29, 2022. While strike notice has been served, the parties remain in contact and continue to have the assistance of the mediator.

On September 13 ,2022 Westshore Terminals shares closed at $29.76 and currently trade in a 52-week range of $37.70 and $23.56.

Westshore recently entered into a conditional agreement to provide services that triggered BHP Billiton Ltd. [BHP-NYSE, BHPLF-OTCPK] final investment decision to proceed with the $7.5 billion Jansen Stage 1 potash project in Saskatchewan.

The Jansen S1 project is expected to produce approximately 4.35 million tonnes of potash annually and has a basin position with the potential for further expansion. First ore is targeted for the 2027 calendar year, with construction expected to take approximately six years, followed by a ramp up period of two years.

Jansen S1 includes the design, engineering and construction of an underground potash mine and surface infrastructure, including a processing facility, a product storage building and continuous automated rail loading system.

Product will be shipped through Westshore in Delta, B.C. and the project includes funding for the required port infrastructure to support the Jansen operation for a term to 2051, subject to extension.

Westshore is designing and will construct the necessary infrastructure to handle potash, including a potash dumper, storage building and associated conveying system. In addition, certain existing infrastructure at Westshore terminal will be modified to support handling potash.

Potash will be loaded only at the terminal’s Berth 2, which will continue to be available for loading coal. Coal operations are expected to continue without undue disruption through the construction phase.

Westshore said BHP will substantially fund the construction, with Westshore being responsible for construction costs in excess of the agreed budget. Westshore will also contribute up to an aggregate $33 million to costs related to specific infrastructure or unexpected permitting conditions that are encountered. The agreement provides that potash infrastructure must be available by mid 2026.

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