HD Mining chief makes his case for hiring temporary foreign workers

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In a downtown office, Penggui Yan is sketching on a white board, using pictures to illustrate mining techniques and back his claim that he needs to hire Chinese workers to determine whether the Murray River project near Tumbler Ridge can be a viable mine.

The proposed project would use a technique known as longwall mining, which extracts coal in long seams rather than the so-called room-and-pillar model used in existing coal mines in Canada. To make the method work, you need employees that understand the equipment, methods and dangers – including potentially explosive gases – of working in such an environment, Mr. Yan insists.

"You have to have that continuity," Mr. Yan said on Monday. "You have to allow me to prove this mine is mineable. For the time being, I don't know if it's mineable. I am taking $150-million out of my own pocket to prove this will be a mine." Exploration and bulk sampling would amount to $150-million of a projected $300-million cost to build the mine, Mr. Yan said.

For Mr. Yan, the chair of Vancouver-based HD Mining International Ltd., the logic behind hiring foreign workers is unassailable. Others, however, have questioned the company's rationale. Two unions have launched a court case to challenge the process that cleared the way for HD Mining to hire 200 foreign workers at Murray River. Spurred by the controversy over the company's plans, Human Resources Minister Diane Finley last November said she would review the Temporary Foreign Worker Program.

HD Mining, meanwhile, has become a lightning rod for concerns that reach far beyond Tumbler Ridge, including the increasing numbers of temporary foreign workers in Canada. As of the end of 2011, more than 300,000 workers were in Canada under the program, up from fewer than 200,000 in 2007. Labour groups and academics have raised concerns that the country's increasing reliance on foreign workers could result in depressed wages and put vulnerable employees at risk of abuse.

HD Mining's court case remains under way. B.C. locals of the International Union of Operating Engineers and the Construction and Specialized Workers' Union are seeking a judicial review of the workers' permits granted to the company.

The unions allege that HD Mining could have hired Canadians for the jobs and recently released a document outlining the experience of applicants that were turned down for positions at the project.

If the mine is built, HD Mining would hire and train Canadians, Mr. Yan said.

"I understand the concern of Canadians. This is a Canadian resource and it belongs to Canadians," he said. "If a foreign company wants to come here and take the resources and mine them, that's fine … but Canadians must be hired. I understand that. And I intend to do that in an open, transparent way."

He also maintains that it is not any cheaper to hire foreign workers than Canadians, saying that the workers at the Murray River project would not only be paid the prevailing market wage but would also be provided housing, transportation and meals.

Sixteen workers arrived in Tumbler Ridge last fall. The company recently sent them home, citing the cost and uncertainty of the litigation.

Mr. Yan would not go into detail about HD Mining's ownership.

A private, B.C.-registered company, HD Mining says it is owned by Huiyong Holdings (BC), with a 55-per-cent stake, and Canadian Dehua Lvliang Ltd., with a 40-per-cent stake, and a third shareholder. Huiyong Holdings (B.C.) is said to be owned by Huiyong Holdings China, described as a "respected international leader in coal-mining safety," with nine mines. Mr. Yan is chair of both companies.

Huiyong Holdings China does not have a website. HD Mining has for months declined to provide the names or locations of its parent company's operating mines.

Mr. Yan – who worked with the Chinese government as a senior official in the 1990s – declined to name the mines but said that B.C. officials have visited some of the sites.

"Who says I have to have my operation on the Internet? I am just a miner. An economist who has an interest in the mining business. Who says I must do that?"

The temporary workers HD Mining wants to hire would come from Huiyong's mines in China. "I can claim for the nine years continuous operation of my nine mines, I have had no fatal accident."

In a rare moment of levity, he referred to mines in China as his 'babies' and said Murray River, if it goes ahead, would be his 10th.

"If this mine is ever to proceed and sustain itself, it is in my own interest to phase out the temporary foreign workers and convert Canadians into underground miners," he said. "It is really more costly to use the temporary foreign workers."