No end in sight for Fort McMurray's looming gravel crisis
But contractor says potential shortage may not affect gravel prices in Wood Buffalo region
Delays in opening a new aggregate mine could mean an area-wide gravel shortage for oilsands companies in the Wood Buffalo region.
The current gravel pit, Susan Lake, 85 kilometres north of Fort McMurray, is near-depleted and was scheduled to close in April.
A new gravel operation at Coffey Lake, 105 kilometres north Fort McMurray, was slated to replace the previous mine but it isn't running because of permitting issues.
Both the industry group and the province could not say when the new mine would open.
The industry group, the Fort McMurray Aggregate Users Group, warned Wood Buffalo municipal council in February about a looming shortage of the base material used in everything from oilsands construction to municipal infrastructure.
"This crisis is going to have a negative effect on all infrastructure development," chairman Dan Fouts told council. "A crisis which could have been avoided."
The group would not do an interview other than to say talks were still continuing with senior government officials.
Shannon Phillips, Alberta's minister of environment and parks, said in an emailed statement the government has worked with Athabasca Minerals to keep its Susan Lake open.
She said the government is continuing discussions with Mikisew North to work through issues related to permits for Coffey Lake.
Phillips said she hopes to resolve the issue in the coming months.
Mikisew North, Coffey Lake's operator, declined to comment.
Hoarding gravel
Local contractor Paul McLeod, owner and operator of Vancon Services, said many suppliers have been hoarding gravel in yards should the government not come to a speedy resolution.
"You started seeing stockpiles pop up all over the place, where even small trucking companies and construction companies were stockpiling gravel to make sure they don't run out," McLeod said Friday.
"Unfortunately, that has increased cost because it costs money to move the gravel, and then it costs money to pick up the gravel and move it to wherever the construction is."
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McLeod said suppliers have absorbed those extra costs. He hasn't seen an increase in the price of gravel. He typically pays almost $50 a tonne, but he said that could change.
"I think the issue isn't the supply of gravel," McLeod said. "The issue is more one of regulatory certainty, where people know the supply of aggregate products is going to be consistent and keep the volatility out of the price."
But McLeod said needs for gravel have likely stabilized. Most oilsands companies aren't building new projects that require gravel and more than half of the 2,579 structures destroyed by the wildfire already have their foundations laid.
Connect with David Thurton, CBC's Fort McMurray correspondent, on Facebook, Twitter, LinkedIn or email him at [email protected]
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