City continues to benefit from slag fund

With a mining history, the City of Grand Forks is still able to make a profit, and in turn benefit from its Slag Sales Reserve Fund.

The slag pile fund is a reserve fund that collects royalties from the sale of slag by Pacific Abrasives, the company that now operates the site.

Slag is the remnants of copper that was mined at the Granby Mining site by the Granby Mining Company Ltd. since the early 1900s.

When the copper was removed from the mines, it was then refined and made into a product that could be utilized in various industrial operations.

During the smelting process, a byproduct that is produced is a black slag, caused because it has a strong iron component.

“There’s all kinds of mining slag around the world and this is one of the few slags that we would call inert,” explained Lynne Burch, Chief Administrative Officer. “There is no arsenic in it and therefore it can go right into the water, which is why the U.S. Navy likes to use it to clean their ships.”

The slate is crushed into a granular state and shipped by rail from Grand Forks to the U.S. Navy in San Diego, Calif.

There are two types of slag created by Pacific Abrasives.

“There’s the granulated slag, which are the smaller bits, seen in the large piles off Granby Road, and the blocks underneath called the ladle slag,” Burch described.
“The ladle slag, when the smelting process of the copper was underway near the bank of the water, becomes hard rock when it touches the cold water.”

The slag becomes diamond hard and has a thermal quality to it that makes it a good product for insulation, she stated.

“The city bought the rights to the slag pile in the 1960s and we have an exclusive agreement with Pacific Abrasives that allows them to utilize the slag and sell it,” stated Burch. “In return, the city gets a royalty, which is a payment per ton. Right now its $2.50 per ton.”

Depending on the market, some years are better than others, but Burch believes there is around 20 years left of slag material to be crushed and sold. “We make money off of that and all the money that we make goes into what we call a reserve fund, like a savings account. We’ve been spending money out of the slag fund for the city since 1977.”

The fund has been used to update buildings and facilities like roads, the aquatic centre, City Park irrigation line and campground, and James Donaldson Park, as well as upgrades and renovations to equipment and furniture such as the fire hall completion, and airport upgrades.

City Chief Financial Officer Cecile Arnott stated, “We’ve spent more than $12 million from January 1977 for projects in the city.”

As of December 2010, the Slag Sales Reserve Fund has a balance of just over $1 million. Figures for 2011 will be released sometime next month.

“Council decides when to use the slag fund, and different councils have different priorities for the slag fund,” explained Burch. “The last five to seven years, council has been reluctant to use the slag fund because it’s going down. It’s not a written policy, but they have determined that they want to use it for things that they consider to be determined a legacy.”

Burch explained that in other words, ‘legacy’ is things that will be a lasting benefit for the community.

Mayor Brian Taylor noted the Slag Fund is used for important matters, which is fairly open to council interpretation on how it’s used.

“Recently, projects are more regional and have a lasting legacy to it, like the trail system,” Taylor said. “It’s been instrumental in a lot of projects including the library, the arena and swimming pool. The Slag Fund has gone into a lot of major projects over the years.”

Burch added, “The city is very lucky and unique to have to slag fund.”

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