Metinvest adds new coal operations in the U.S.

Lower levels of sales in 2011 in the Coke and Coal segment of Metinvest BV, which were down by 1.8%, had to do with higher prices not making up for lower sales volumes, the company said in an April 17 preliminary statement on its 2011 results.

Metinvest is an international, vertically-integrated steel and mining group of companies that controls Blountville, Tennessee-based coal producer United Coal. United Coal has coal mining operations in eastern Kentucky (including Sapphire Coal), southern West Virginia (including Pocahontas Coal, Affinity Coal and Carter Roag Coal) and Virginia/West Virginia/Kentucky (Wellmore Coal).

“In 2011, the primary markets for the Coke and Coal segment were Ukraine (52.5%) and North America (33.9%), with the share of coal concentrate sold to these markets decreasing by 6.8%, and increasing by 2.8% respectively,” the company said. “The reduction in share of sales to the Ukrainian market was due to the increased consumption at Ilyich Steel, while the share of sales to the US market increased due to a number of factors: a surge in the mining of coking coal at the Carter Roag mine due to improved geological conditions; the opening of the new Affinity mine; the opening of the new site at the Pocahontas mines and increased productivity of mining equipment; and the launch of a new site at Wellmore.”

At the same time, sales volumes of steam coal concentrate at U.S. operations declined by 20.3% to 1,386 thousand tonnes as a result of two mines remaining idle on the back of low demand for steam coal, Metinvest said, without identifying the mines.

Metinvest CEO Igor Syry said: “In a strong year for our operations, crude steel production increased by 64.4% to 14,375 thousand tonnes, boosted by the consolidation of Ilyich Iron and Steel Works, and we increased the share of finished products in our total sales portfolio to almost 80.0% in 2011. Similarly, production of coking coal saw an increase of 12.3% to 11,339 thousand tonnes, and we are undertaking measures to secure the supply of and improve the quality of our raw materials, which has resulted in the launch of a capacity expansion project at the Affinity mine in the US. This should provide us with an additional source of high grade coking coal, which should help to restore the normal margin distribution in the total value chain of Metinvest.”

New, revived mines added to production portfolio

Affinity Coal controls a long-shut deep mine in Raleigh County, W.Va., that went back into production in 2011 and turned out 8,071 tons that year, according to U.S. Mine Safety and Health Administration data. The Pocahontas Coal operations, which feature a mix of deep and highwall mining, are located nearby.

The West Virginia Department of Environmental Protection said in an April 16 public notice that is has gotten a permit application from Pocahontas Coal covering a face up and operation of a deep mine in the Pocahontas No. 6 coal seam. This will be a room-and-pillar job with pillar extraction located in Wyoming County.

The most recent mine permit issued to Pocahontas Coal came out on Feb. 13 for the 238-acre Tommy Creek Highwall No. 1-Devil’s Trace strip mine, where auger, contour and highwall miner methods will be used to work the Pocahontas No. 6 and Beckley coal seams. The DEP database shows this newly-permitted operation, located near Rhodell in Raleigh County, as “active, moving coal.”

The highwall mines of Pocahontas Coal are listed with the U.S. Mine Safety and Health Administration as one collective operation, with the registration for those operations transferred March 12 from United Coal’s North Star One LLC unit to directly being in the name of Pocahontas Coal.

Carter Roag is located in Randolph County, W.Va., with MSHA data showing that the long-established Pleasant Hill deep mine produced 606,361 tons in 2011, up from 491,336 tons in 2010. MSHA also shows Carter Roag with the Left Fork No. 7 and Morgan Camp deep mines, which are listed as new operations with no recorded production yet.

United Coal also got the permits in 2011 from the DEP, at a site located near Mabie in Randolph County, for the new Roaring Creek Coal underground mining and prep plant complex. The DEP website shows the deep mine, which works the Sewell seam, as “active, moving coal possible.” MSHA classifies the mine as “nonproducing.”

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.