VANCOUVER - The legal and political troubles that have overshadowed a plan to bring 201 Chinese workers to a proposed coal mine in northern British Columbia have prompted one of the companies involved to shut down a separate coal project nearby.

Canadian Dehua International Mines Group Inc. announced Saturday it has decided to wind down work at its Wapiti River coal project, located southeast of Tumbler Ridge.

Dehua owns a minority stake in HD Mining, which has generated headlines in recent months over its plan to bring Chinese miners to another proposed mine at Murray River, also near Tumbler Ridge. Two unions have asked Federal Court to throw out HD Mining's temporary foreign worker permits, and the case has prompted the federal government to announce a review of the entire temporary foreign worker program, including HD Mining's permits.

Dehua issued a statement early Saturday morning announcing it had filed a notice to shut down its Wapiti River project. The shut-down order is effective Sunday at midnight, the statement said.

"The decision has been forced upon Dehua following a deluge of calls from investors in Dehua's mining operations in Canada," said the statement, distributed by company lawyer Darryl Larson.

"Investors have expressed reluctance to proceed with funding in the aftermath of the (court) challenge" of HD Mining's foreign worker permits.

The Wapiti River project won't restart unless Dehua can secure investors, the company said.

Dehua said it planned to comment on the closure of Wapiti River project on Monday.

The Wapiti River coal project is a proposal for an underground mine on a 15,000-hectare property located about 45 kilometres southeast of Tumbler Ridge. It had been in the exploration phase, with construction expected to be finished by 2014, according to reports posted to the B.C. government's website.

B.C.'s minister of energy, mines and natural gas, Rich Coleman, issued a statement that attempted to downplay the closure, suggesting Dehua was only shutting down "temporarily," though he didn't elaborate on that point.

Coleman's statement also said "many exploration projects shut down for the winter season," but he didn't say how that fact relates to the Wapiti River project. Dehua's announcement made it clear the closure was prompted by problems with its investors, not the weather.

It's not clear whether Dehua's decision to close the Wapiti River project will affect its participation in HD Mining and the Murray River mine. Dehua owns a minority stake in that project, with China-based Huiyong Holding Group holding 55 per cent.

HD Mining has said it needs to bring in foreign workers because of a lack of qualified miners (The Canadian Press)in Canada.

Last week, a Federal Court judge ruled that two unions can proceed with a legal challenge of HD Mining's temporary foreign worker permits. The unions are arguing the company didn't attempt to train and hire Canadians before it applied for foreign worker permits.

HD Mining has since filed an appeal challenging the unions' standing.

Earlier this month, federal Human Resources Minister Diane Finley said she wasn't satisfied the company made adequate efforts to hire Canadians, though she has not elaborated.

Tumbler Ridge, the nearest community to the mine, is a town of about 2,700 that was only incorporated in 1981 to support nearby coal mines.

Mayor Darwin Wren said he was disappointed by Dehua's decision to shut down Wapiti River, but he said he remained optimistic the Murray River mine and other proposed mines in the area will still go ahead.

"There was a lot of local investment happening from that company, so from a community perspective, any time different industries or businesses are going to close down, it has an impact," Wren said in an interview Saturday.

"The history of Tumbler Ridge is coal mining, and there's a future for underground coal mining in Tumbler Ridge. I'm hoping that HD Mining can be successful."

Wren pointed out the Murray River project isn't just creating jobs for foreign workers, but also local contractors. He also noted HD Mining is working on a $15 million housing project linked to the mine.

Seventeen Chinese workers have already arrived at the mine and another 60 are slated to arrive in mid-December, according to HD Mining. The company's 201 temporary foreign worker visas are good for two years.

HD Mining has insisted its long-term plan is to train and hire Canadians.

Last week, the company announced it had signed a memorandum of understanding with a college to train Canadians to work at the mine. It plans to work with Northern Lights College to develop a curriculum for training people in the specialized, long-wall underground mining technique that will be used at Murray River.

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