Clifford Frame Hits the Coals
Westray Boss Heads Back to Coal Mining
by Charlie Angus
HighGrader Magazine
September/October 1997

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Clifford Frame is a busy man. Just last month his bid to escape testifying at the Westray inquiry was squashed by an Ontario court. Mr. Frame brought the case to Ontario after being ordered to testify by the Nova Scotia Supreme Court. Not surprisingly, he has made it clear he will now take the matter to the Ontario Supreme Court. For families of the Westray victims, the process has been frustrating. It has been five years since the disaster and officials are still waiting to speak with the man who held the final authority at the Westray Coal Mine.
With the Westray Inquiry stalled out, Clifford Frame has set his sights on getting back into the coal mining business. As the president of an aggressive little company, he is trying to wrest control of a coal project in West Virginia from its Australian owners. Frame is mounting a hostile takeover bid of Australian listed Greenfields Coal Company. Greenfields' executives say they only recently became aware about Frame's involvement at Westray. Now the accusations are flying and the situation has gotten nasty enough to attract the attention of the Australian Securities Commission and regulators of the Toronto Stock Exchange.

Westray
When Curragh Resources' mining boss Clifford Frame started talking about opening a mine in the economically depressed area of Stellarton, Nova Scotia, in the late 1980s, politicians flocked to him like seagulls at the beach. The Foord coal Seam had been mined intermittently since the 1830s. With its high levels of methane and poor ground conditions, the Foord Seam had already claimed 244 lives.
Curragh talked brightly of using new technology to make the operation safe and viable. Politicians predicted the mine would bring steady development to the region for decades. The only stumbling block was that in order to make the plan viable lots of government grants and concessions would have to be forthcoming. Premier Donald Cameron tied his own political aspirations to the success of the mine and the regulatory green light was given at every step of the way. The Feds and the Provincial government sank almost $100 million in getting Westray off the ground.
Publicly, the Westray operation was a model of safety and mining ingenuity, an example of what government and industry could do when they worked together. Inside the mine, however, life was far from rosy. Curragh had signed contracts with Nova Scotia Power but was finding that delivering the coal was harder than it seemed. A review of the mine plan by Canmet concluded that the company and the Provincial Government hadn't taken into account the complex nature of the Foord Seam that would stretch the limits of known technology. The review concluded that in order to make a profitable and safe mine, much more study and planning was needed. But Curragh had deadlines to meet.
Shaun Comish was a miner with 12-years experience when he went to Westray. "They were way behind in their production quotas and were changing their plans all the time trying to find ways to get at the coal quicker. They didn't seem to know coal mining. The attitude seemed to be never look back and you just can't run a mine like that."
Bob Burchill is with the United Mine Workers in Sydney. He believes that the company had set up an unreasonably optimistic production schedule and then began to arbitrarily change plans once problems began to occur. "Legally before you start development you have to file plans that have to be approved by the Department of Mines. Curragh were having a hard time meeting their contract so they started taking shortcuts, making changes and then letting the Department know once they were halfway into the new direction. It was a game of Russian Roulette. If everything works out, fine, we'll go back and fix the damage later when we're making big bucks from the coal. It didn't work out of course."
Kenton Teasdale lost his son-in law, Myles Gillis, in the explosion. He says that the miners were worried about conditions in the mine, but that many lacked the experience to be able to stand up to management. "The miners were bullied. They were young in years and very young in experience. Some of them had no mining experience. Some of them had hard rock mining experience but they didn't have any experience in coal or methane. Young, inexperienced men were taught to be macho and those who feared for their lives were ridiculed. They were told to go look for a job at minimum wage if they didn't like the conditions. You tow the line or you get ridiculed and fired." Shaun Comish says that miners working a 12 hour shift were afraid to stop for lunch.
From the beginning, the mine was plagued by numerous cave-ins and very high levels of coal dust and methane. Shaun Comish states that methane meters were sometimes removed from diesel loaders because the high methane levels would otherwise cause the machines to shut off.
Due to the combustible nature of coal dust anything that might cause a spark or an open flame cannot be allowed underground. Shaun Comish says that fire safety standards were incredibly lax; diesel machines were refueled with the engines still running, cases full of grease cartridges were dumped along with rags in the drifts, fires broke out on machine engines and cutting torches were often used underground.
Ample amount of crushed rock was needed to keep the coal dust levels down, but only 210 tonnes were ordered through the whole life of the mine (20 bags of rock dust will only cover about 50 feet of a drift).
A mere five months into production it was all over. On May 9, 1992, coal dust ignited underground killing all 26 miners on the night shift. For over a week, every television in the country was tuned into the tragedy that was unfolding as mine rescue teams searched through the wreckage, at first in the hope of finding survivors, and then in the attempt to retrieve the bodies.
Throughout the ordeal, Clifford Frame kept a low profile at head office in Toronto. Colin Benner, Curragh's second in command, handled the damage control - reassuring the media that everything that could be done was being done. Westray officials were at the same time telling family members not to break ranks and start speaking with the media. Let the company handle this and we will look after you. In the end, the company couldn't. Conditions were so dangerous underground that mine rescue efforts had to be suspended and 11 bodies left underground.
Kenton Teasdale says Clifford Frame only made contact with the families on two occasions; once indirectly when there was still hope some men might still be found alive and once at a face to face meeting six months later.
"During the recovery attempt he indicated that if the family members would bear with him and support his attempt to open an open pit mine on the property he would consider settings aside a levy of so much per ton to go to the widows. Here we were grieving, scared stiff, some knowing the worst already, others still hoping for some kind of miraculous recovery of some of the people alive and he was in another Ôframe' of mind. One of the widows referred to this offer as emotional blackmail."
The second meeting took place in January 1993 when it looked like Curragh Resources was going to be stripped of its mining leases. "He made a pitch to the families of those whose bodies were still entombed in the mine that perhaps their best bet of ever recovering the bodies of their loved ones would be if they gave support for his new mining plan. He suggested that he could use the rehabilitation of the mine as a possible means of recovering the 11 bodies entombed. He had no plan or specifics how he was going to get the bodies. We were supposed to just give support and then go on faith."
According to Teasdale, the families wanted to know how a future mine would be any safer than Westray. "He gave us his assurance that he knew mining. He stressed that he was a hands on kind of person, that he worked his way up through the ranks, he had been a miner, he had been an engineer and could personally assure that this was a good plan that he was going to submit. It is ironic that now he is appealing the subpoena on the grounds that he had no direct involvement or direct knowledge of the day-to-day operations. And yet in his quest to have the families approval so government might approve his mine license he stressed the very opposite."
This second meeting with the families came at a time when the company was on the verge of bankruptcy, losing the mining rights in Stellarton and at their lead/zinc operation in Faro, Yukon. Outrage over Westray had brought about a criminal investigation and a major public inquiry.
The Westray Inquiry has been a long sad story of neglect and collusion as all the players, from the former Premier Donald Cameron to the safety inspectors at the mine, have been forced to testify. Everyone that is, but Cliff Frame and Westray Coal President Marvin Pelley.
David Roberts is the Council for the Steelworkers at the Inquiry: "Mr. Frame has said that it was a simple accident. This is in the context of him refusing to testify. If it was a simple accident why has he gone to three levels of court to try and prevent himself from being forced to testify. I think obvious conclusions can be drawn from this."

Greenfields Coal
Mineral Resource Corporation (MRC) is hardly a tiger of Canadian mining. Last September it listed cash assets of $28,000 and a liability of $4.1 million. Its only claim to fame is that it is the vehicle Clifford Frame is using to get back into the industry. Since assuming control of this paper company he has moved quickly.
MRC started with an issue of 450 million penny shares. Working with longtime associate Australian John Byrne (he headed up First Toronto Mining Co. that went bankrupt in 1993), Frame began looking around for a cheap but viable project to give MRC a cash flow.
First choice was the Faro Mine which had been run by Frame during the Curragh days. The mine has fallen on hard times. The main ore body is depleted and low mineral prices have crippled present owners Anvil Range. MRC made a big public splash about rescuing Anvil Range and getting the mine back in operation. Despite his notoriety and the fact that Curragh left behind a million dollar clean-up bill at Faro (plus millions owed to unpaid creditors), Frame was presenting MRC as the company to go with. He told skepitical Yukoners that one of his associates is former Prime Minister John Turner. Much to Frame's chagrin, Anvil Range ran from the MRC bid and jumped into the arms of mining giant Cominco.
MRC then decided to reorganize its finances, recalling the 450 million shares in a 50 to one swap. These 9 million new shares then looked much more solid, trading on the Toronto Stock Exchange for around 70 cents (still 1.5 cents on the old shares). In its company report MRC claimed to be in control of a tailings project in Britsh Columbia with a takeover of BC Chrysotile Corporation.
Armed with this seemingly stronger stock base, MRC decided to go after a struggling Australian outfit, Greenfields Coal Company (GCC), which has been trying to get a mining reclamation project off the ground at the old Gary #2 Mine in Gary, West Virginia. With the promise of guaranteed contracts for $21 US a ton, once the coal is reprocessed from the tailings dumps, Greenfields stands to cash in on an additional $31 per ton in tax credits.
Frame initially tried to get himself nominated to GCC's board of directors. When this failed, a letter was issued at midnight July 3rd demanding that Frame, Byrne and compatriot Jeremy Lees be named as directors to the company or MRC would proceed with a hostile takeover bid. The company was given 2.5 hours to respond.
When this failed, MRC went ahead with its announced hostile takeover offering one MRC share for every eight Greenfields shares. Peter Mathews, secretary for GCC points to the fact that MRC owes GCC $500,000 dollars and is trying to take over the company with a paper play. "We have instructed our lawyers to prepare the documentation to take steps to wind Mineral Resources Corporation up if the amount is not paid. We don't know if they have the ability to repay. If we look at their last quarterly report they don't have the sufficient cash to be able to do that. You have to look at what their assets are. A large proportion of their assets are their share in Greenfields. I gather they are desperate to find a company that will give them a cash flow."
GCC maintain that they were not made aware of Frame's involvement at Westray until a web search brought up the submission made by the United Steelworkers to the Westray Inquiry. Says Peter Mathews, "Mr. Frame's CV only seems to go up to 1988. We asked him to update it for us but he never got back to us." Frame's CV does not mention Westray or Quintette Coal. The CV makes reference to Curragh but does not point out that the company Curragh is presently facing charges of manslaughter and criminal negligence relating to the accident at Westray.
When Greenfields found out about the Westray connection, they sent an objection to Frame pointing out that his involvement with a new coal mining project could serve to damage delicate relationships between the company and organized labour. In a letter obtained by HighGrader Magazine, Clifford Frame challenged the possibility that his invovlement would upset organized labour:
"My relationship with the Steelworkers has been excellent even through the difficult changes in worker standards which occurred when I headed up the largest underground mine in the world. In any event, the miners in West Virginia could not care less what happened in Nova Scotia. They know I had no personal responsibility for the Westray accident."
C.A. Phillips is the UMWA negotiator for the Alpheus Project in Gary West Virginia. He disagrees with Frame's assessment of the attitude of lack of interest in West Virginia. "Mr. Frame certainly doesn't know UMWA miners in West Virginia, does he? Because UMWA miners in West Virginia feel just the same as miners in Nova Scotia."
The Steelworkers Union in Canada has sent a strongly worded letter to Greenfields warning Frame's potential involvement in a new mining venture. The UMW have made it clear they do not want Frame involved in the Alpheus project.

The attempted takeover bid by Frame and Byrne has also garnered the interest of the Australian Securities Exchange. Peter Mathews explains, "There has been an investigation by the Securities Commission and the Australian Stock Exchange into alleged share manipulation, improper trading in shares and improper use of confidential information. There has been a writ that has been issued by the Federal Court of Australia which has been directed to Mineral Resources, its Australian subsidiary Pacific Resources Corporation and Mr. John Byrne who is a director of Mineral and Pacific." The results of the investigation are not yet known.
In a MRC company report, Frame promises to "respond vigourously" to Greenfields' court action. "Greenfields is intent on wasting money on litigation rather than addressing important business issues."
GCC has also been in touch with the Toronto Stock Exchange asking that MRC be delisted because it claimed to have 100% ownership of BC Chrysotile when in fact it did not. (GCC is a 20% owner). GCC feels that since BC Chrysotile is the only cash asset MRC can claim, "the false and misleading conduct presented by MRC to the Toronto Sock Exchange is material and is likely to have a significant effect on the value of shares traded by MRS on the TSX." The TSE regulators have been in touch with MRC and John Byrne has promised that MRC will correct the misstatement, It is not yet known whether a further investigation will be held.

Five years after the Westray accident, Shaun Comish is still waiting for the Westray Inquiry to provide some concrete answers. He finds it surprising that Frame is attempting to go back into mining. "I'm flabbergasted that he's trying to get back into the coal business. Twenty six lives were lost. If you ask me I'd say mismanagement of that mine was 98% responsible for what happened. I don't think any of them should be allowed to have anything to do with coal mining until they are cleared, if they are ever cleared."