Cline Mining (TSX: CMK) said April 2 that effective on May 1, New Elk Coal Co. LLC senior management will take full management control of all mining operations at the New Elk coal mine located near Trinidad, Colo.
No changes are expected because of this in the status of miners and mine staff, all of whom are expected to remain and continue in place on the New Elk team with no changes in their personal employment terms or arrangements. The responsibility for the mining operations for the opening and initial development of the mine was provided by TK Mining Services LLC under a mining services agreement.
New Elk is a long-shut deep mine that Cline recently reopened to serve the metallurgical coal market. The U.S. Mine Safety and Health Administration database shows that the registration for the New Elk mine was transferred on Feb. 16 from TK Mining Services to New Elk Coal. MSHA data shows the mine producing 17,701 tons in 2011 as it went through its early restart phase.
The New Elk mine was first opened in 1951 by CF&I Steel to provide metallurgical coking coal for its blast furnace iron and steel production plant at Pueblo, Colorado. The CF&I plant was converted to direct electrolytic reduction of steel in 1981 eliminating its need for coking coal and the mine was sold to Wyoming Fuels, which continued operation of the mine through 1989.
Cline Mining wants to ramp up production to 2.75 million tons of saleable metallurgical coal produced in 2012 with 3 million tons per year of coal produced in 2013 and thereafter. A longwall is being looked at to further expand production beyond what is possible in the current room-and-pillar mode.
This is described as low-sulfur, medium-to-high fluidity, high-volatile B bituminous metallurgical coking coal. The high grade specification that can be delivered on “as received” basis is: FSI 7.0-8.0; ash 8.5%; moisture 8.5%; volatiles 35%; fluidity 25,000 ddpm; reflectance 0.9%; sulfur 0.5%; and 13,500-14,000 Btu/lb.