Oxford permits two coal mines in western Kentucky

Oxford Mining Co.-Kentucky LLC, a unit of Ohio-based Oxford Resource Partners LP (NYSE:OXF), is seeking a Section 404 Clean Water Act permit from the U.S. Army Corps of Engineers for a strip mine project in Muhlenberg County, Ky.

The Corps office in Louisville, Ky., is taking public comment, which is an early stage of the Corps review process, on this application until March 5.

The mine site is on unnamed tributaries of Cypress Creek and associated wetlands, located at the Wendell Ford National Guard Training Center, west of Central City in Muhlenberg County. The proposed project would result in discharges of fill and/or dredged material into “waters of the United States” within the 156-acre permit area for the Star surface mine, which has been approved under Kentucky Division of Mining Permits permit #889-0159.

The permit area includes a mix of land uses including pre-law mining, post 1977 Surface Mining Control and Reclamation Act (SMCRA) reclaimed areas, agriculture and forest. The area would be returned to approximate original contours, covered with stockpiled soil material, revegetated, and returned to an approved post-mine land use through the SMCRA process, the Corps said in a public notice.

Also, the Kentucky Department for Environmental Protection (DEP) went out for public comment on Jan. 25 on a wastewater permit application for another project of Oxford Mining Co.- Kentucky, this one under mining permit #889-0130. The site is located near the intersection of US 62 and KY 189 in Muhlenberg County. Affected indirectly by this project are the nearby communities of Greenville and Central City.

The proposed project will directly facilitate the continued employment of 32 people. There is an estimated 1.6 million tons of recoverable coal remaining within the permitted boundary, said a July 2011 socioeconomic report about the project submitted to the DEP. “The current coal spot market price for Illinois Basin coal as of July 15, 2011 has been estimated at $47.80 per short ton,” said the report. “The severance tax rate for coal in Kentucky is 4.5% of the gross market value. The proposed project will produce approximately $3,441,600 in tax dollars at current coal spot market prices over the life of the mine (1,600,000*47.80*0.045).”

“The Muhlenberg County mining complex is located in Muhlenberg and McClean Counties, in western Kentucky, and consists of the Schoate, Highway 431, KO and Rose France mines,” said the March 2011 Form 10-K filing of Oxford Resource Partners. “We began our mining operations at this mining complex in October 2009. Operations at the Muhlenberg County mining complex target the #5, #6, #9, #10, #11, #12 and #13 coal seams of the Illinois Basin. As of December 31, 2010, the Muhlenberg County mining complex included 23.5 million tons of proven and probable coal reserves. The infrastructure at this mining complex includes the Schoate wash plant, the KO coal crusher, the Rose France coal crusher and our Island river terminal. … This mining complex uses the area method of surface mining. This mining complex produced 1.7 million tons of steam coal during the year ended December 31, 2010.”

A December 2011 conference presentation by Oxford said this complex currently has four mines and production of over 2 million tons per year. Major customers for these operations include Kentucky Utilities, Louisville Gas and Electric and Big Rivers Electric.

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.