Robert Dunsmuir - Coal

Coal

Further information: List of Coal Mines and Landmarks in Nanaimo area

The lease from the crown that gave the HBC the rights to all of the coal found on Vancouver Island ran out in 1859, requiring the company to purchase the 6,193 acres (25 km2) that made up its Nanaimo operation. With the new pit operational, the HBC sold its entire Nanaimo operation to the Vancouver Coal Mining and Land Company in September 1862 for $200,000. Dunsmuir worked from time to time as Superintendent of that company and, as well, for the Harewood Coal Company of his friend Dr Alfred Benson, which failed to raise the capital it needed to exploit its claim.

Once the crown lease the HBC held expired in 1859, it had become possible for claims to be staked by others. In October 1869 Dunsmuir was fishing for trout at Diver Lake, a few miles north and west of Nanaimo, when he found a coal outcrop. He staked a claim to 1,600 acres (6 km2) in a band 1,000 yards (1,000 m) wide and 4 miles (6 km) long including the north half of Diver Lake and running right to Departure Bay in the area known as Wellington. In order to stake a claim of this size, he was required to form a company, to be known as Dunsmuir, Diggle & Company. His sons James and Alexander and some others were partners but signed off once the legal requirement of partners in the venture had been met. Wadham Diggle, commander of the naval vessel Boxer, one of the first to use Dunsmuir's coal, invested $8,000 in the venture. Rear Admiral Arthur Farquhar, Commander in Chief of the Pacific Fleet invested a further $12,000. The two investors left the operation of the company to Dunsmuir. By 1873 the Wellington colliery was producing 16,000 of the 40,000 tons produced on Vancouver Island. By the end of 1875, Dunsmuir was producing 50,000 tons per year. Its two principal markets were San Francisco and the Royal Navy. The company bought out Farquhar in 1879 and in 1883 Diggle was paid $600,000 for his half share of the business, then producing a profit of $500,000 per year.