Arch Coal unit permits big surface mine in Kentucky

The ICG Hazard LLC unit of Arch Coal Inc. (NYSE:ACI) is seeking a wastewater permit from the Kentucky Department for Environmental Protection (DEP) for a major surface mine that will produce over 7.3 million tons of coal during a five-year mine life.

The DEP put the application out for public comment on Feb. 22, including a June 2010 socioeconomic report on the project written by the company. ICG Hazard is one of the operations that Arch picked up in its June 2011 buy of International Coal Group.

This project, located on Sam Campbell Branch in Perry County, would also be covered by Kentucky Department for Natural Resources mine permit No. 897‐0507. The project would involve a combination of contour, area, and auger/highwall surface mining in the Hazard #5A, Hazard #7, Hazard #8, and Hazard #9 coal seams. The site is located near the junction of Clear Fork Road and Sam Campbell Branch Road in Perry County near Dunraven. The operation would provide employment for an estimated 65 workers.

“Recovery of the Hazard #5A, Hazard #7, Hazard #8, and Hazard #9 coal seams over the five year life of the project will produce approximately 7,306,900 tons of coal,” said the socioeconomic report. “This will generate approximately $22.2 million in severance taxes, of which the surrounding counties will receive a total of over $3.3 million dollars (15 percent).”

A total of 7.3 million tons of production, over a five-year period, works out to nearly 1.5 million tons per year, making this a very large mine by eastern Kentucky standards.

Portions of this area have been previously disturbed by mining, logging and other activities. ICG Hazard proposes to utilize four embankment and 28 dug‐out structures as part of the mining operation. In addition, the area will be re‐graded to prevent additional erosion from the previous activities in the watershed.

Said International Coal Group’s February 2011 Form 10-K filing about ICG Hazard’s operations: “Hazard currently operates four surface mines, a unit train loadout (Kentucky River Loading) and other support facilities in eastern Kentucky, near Hazard. Hazard’s four surface mines include East Mac & Nellie, Rowdy Gap, Bearville and Thunder Ridge. The coal from these mines is being extracted from the Hazard 10, Hazard 9, Hazard 8, Hazard 7 and Hazard 5A seams. Nearly all of the coal is marketed as a blend of run-of-mine product with the remainder being washed. Overburden is removed by front-end loaders, end dumps, bulldozers and cast blasting. East Mac & Nellie also utilizes a large capacity hydraulic shovel. Coal is transported by on-highway trucks from the mines to the Kentucky River Loading rail loadout, which is served by CSX. Some coal is direct shipped to the customer by truck from the mine pits.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.