Another step forward for Donkin mine project

The developers exploring the Donkin coal lease in Cape Breton are moving ahead with a study to determine whether the mine is worth opening.

Project manager Val Istomin said the Donkin Coal Alliance approved the $3-million feasibility study to assess the quality of the coal and explore potential markets.

"It's eliminating or reducing the risks of unexpected problems," said Istomin.

The study is expected to be completed by the end of the year. If the company likes what it sees, the mine could be in production by the end of 2009 or early 2010.

"Obviously, these studies we'll currently be doing, they will finetune that and give us much more defined timelines," Istomin said.

Devco, the former federal Crown corporation, developed the Donkin mine through the 1980s, drilling tunnels at a cost of about $100 million. But the tunnels were flooded after the price of coal fell.

The Donkin Coal Alliance, a partnership between Xstrata and Erdene Gold, has already spent millions pumping water out of the old mine and performing preliminary tests on the coal.