Xinergy unit permits coal mine in eastern Kentucky

Xinergy Corp., a unit of Canada-listed Xinergy Ltd., is permitting a coal mine project in Bell County, Ky., that would produce a total of over 590,000 tons of coal.

On March 8, the Kentucky Department for Environmental Protection put a wastewater permit application for the project up for public comment. That includes a December 2011 socioeconomic report on the project signed by company Chief Engineer John Ledington.

The proposed project is a contour, point removal and highwall mining operation (under Kentucky Department for Natural Resources mine permit No. 807-0401 NW). The project will be recovering coal reserves from the Hazard No. 8 coal seam. The site is located near the junction of Big Run Road and Highway 221 (Stoney Fork Road) in Bell County.

This mining operation would provide employment for an estimated 40 employees. The recovery of the Hazard No. 8 coal seam over the life of the project will produce over 590,000 tons of coal. “Portions of this area in Bell County have been previously disturbed by coal mining operations, logging and timber harvest, urban and residential development, and agricultural practices,” said the socioeconomic report. “Xinergy Corporation proposes 96.6 acres of contour and point removal of the Hazard No. 8 coal seam, 121.70 acres of highwall mining of the Hazard No. 8 coals seam, 148.00 acres of highwall support area, the overlap of the pertinent portion of Road-1 (KDNR No. 807-5226) the construction of 27 sediment structures, and the utilization of two existing sediment structures (KDNR Permit No. 807-0360).”

Xinergy Ltd. noted in a March 8 financial filing in Canada that its property in Kentucky includes the Straight Creek thermal coal mining operations in Bell, Harlan and Leslie counties. Straight Creek consists of about 48,000 acres and includes three company-operated surface mines, one company-operated highwall miner and one contractor-operated underground mine. Xinergy also operates a preparation plant and a CSX unit train loading facility. In December 2011 the company executed an asset purchase agreement to acquire coal assets in Bell, Clay and Leslie counties that effectively expanded the reserve profile of the Straight Creek mining complex.

In addition to idling thermal mines at the Straight Creek operations in February in order to meet soft thermal coal demand, Xinergy said it also idled the Brier Creek underground thermal mine in West Virginia and delayed ongoing construction of the Brier Creek coal prep plant. In 2012, Xinergy expects to produce approximately 700,000 to 900,000 tons from all thermal mining operations. “Currently, we have committed sales in 2012 at all thermal operations of 900,000 tons at an average sales price of approximately $70 per ton which we expect to fulfill from production and inventory at our Raven Crest [in West Virginia] and Straight Creek surface mines,” the filing said. “We are working to substantially reduce our thermal coal inventory levels which could continue to increase our 2012 sales as well as generate considerable cash.”

The revised sales estimate for Straight Creek in 2012 is 600,000 to 800,000 tons, down from prior guidance of 1.5 million to 1.8 million tons.

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.