CONSOL Energy (NYSE: CNX) said in an April 16 update on its operations for the first quarter of this year that its coal division produced 15.7 million tons of coal, including 1 million tons of high-priced, low-vol metallurgical coal from its Buchanan longwall mine in southwest Virginia.
“CONSOL’s mines and gas operations continued to run well during the quarter,” said CONSOL Chairman and CEO J. Brett Harvey. “We have stated many times that our top value is safety. In the first quarter we saw significant progress company-wide in our relentless drive towards Absolute Zero accidents. At the same time we were enjoying this progress, we also suffered a crushing setback when a member of the CONSOL family was fatally injured in January. This progress and setback the past quarter illustrate how far we have come on safety performance and how we are not content with where we are currently at. We can and we will do better.”
Harvey was referring to a Jan. 11 accident at the Buchanan mine where a utility/diesel tram operator suffered injuries, and later died from those injuries on Jan. 18. The miner was repairing a damaged water outlet (fire valve manifold) when a 1.5 inch bronze ball valve (quarter turn valve) catastrophically failed, propelling the steel manifold into the miner’s face/head, said a preliminary U.S. Mine Safety and Health Administration accident report called a “Fatalgram.” This was the first fatality in the U.S. coal industry in 2012.
CONSOL Energy said it is suspending second quarter and calendar 2012 coal production forecasts until the idled longwalls at its Blacksville mine in Northern Appalachia and the Buchanan mine have been re-started.
In March, CONSOL Energy began production of coal from the re-started Amonate Mining Complex in southern West Virginia, with some spillover of operations into nearby Virginia. With permits in hand, CONSOL is currently producing coal from three mines: Squire Jim 2, Squire Jim 4 and Pocahontas 3.
The Amonate complex is now expected to produce about 300,000 tons of mid-vol met coal in 2012. This reduction from prior guidance of 400,000 tons was due to delays in receiving state and federal plan approvals as well as initial yields, which have been lower than expected. Squire Jim 2 in McDowell County, W.Va., is listed with MSHA under new contractor GEMCO Energy.
The Blacksville mine in Monongalia County, W.Va., works the high-sulfur Pittsburgh coal seam. The recent idling of the longwall, due to soft market conditions caused by a mild winter and low competing natural gas prices in the power generation market, has enabled the company to shift labor to complete a major sealing project. About one-third of the old workings have now been sealed, thereby increasing safety, reducing ventilation needs and eliminating the need to maintain old mine areas. Since the continuous miner sections continued to operate after the longwall was idled, the number of lead days has increased by at least 20. This means that when the longwall is re-started, the mine will be able to quickly respond to market needs. Blacksville produced 4.3 million tons last year.
At the Buchanan mine in Buchanan County, Va., the continuous miner sections have continued to run while the longwall is idle due to soft market conditions, which has also added at least another 20 days of lead time. The mine produced nearly 5.7 million tons in 2011.
CONSOL announced in February that various improvements are underway at Buchanan, including the construction of a new portal to be located on Horn Mountain. The new portal will reduce travel times underground to active sections by 14 miles round trip, augmenting safety and saving time in getting miners and supplies in and out of the mine. The new portal project is expected to be complete in September. Once the new portal is opened, the existing portal at Contrary will still be used to move equipment in and out of the mine and the office building on site will be used as a warehouse. CONSOL will also continue to use the Page portal service hoist.
CONSOL’s total coal inventory increased during the first quarter by 0.4 million tons to 2.2 million tons as of March 31. Thermal coal inventory increased by 0.4 million tons during the quarter, as sales lagged production. Low-vol Buchanan inventory was unchanged from the end of 2011 at 0.2 million tons.