Walter Energy permits new Blue Creek deep mine in Alabama

A new subsidiary of Walter Energy (NYSE: WLT), called Blue Creek Energy, has started the permitting process for a new underground mine called Blue Creek Energy No. 1 that would work the Blue Creek coal seam in northern Tuscaloosa County, Ala., near the town of Whitson.

A permit application filed by the company in February with the Alabama Surface Mining Commission covers only 321 acres of above-ground support facilities. “This operation will be an underground mine,” said the application. “This permit is only for the development of the underground mine facilities which includes roads, ponds, office and equipment storage areas, bath house, freshwater impoundments, prep plant, etc. A subsequent permit application addressing the mining operation will be submitted while construction and development is ongoing. The proposed mine site will occupy approximately three hundred twenty one (321) acres.”

No other applications for this operation were pending at the commission as of April 10.

The mine will work the Blue Creek seam, which averages 3.8 feet in thickness in this area and 0.61% raw dry sulfur content, the February application said.

“Three vertical shafts (portal, air intake, and fan) are proposed,” the application noted. “Initially the site will be graded using the material on site for the construction of the Portal and Fan shafts. These shafts will be ‘blind shafts’ meaning the shafts will be constructed from the surface down to the coal seam. All material from the shaft will be transported from the shaft to the surface via a hoist and used as fill material to complete the construction of the portal site. This site will eventually serve as a portion of the portal site, buildings, parking and storage. The Auxiliary Intake Shaft will be a raise bore shaft meaning the shaft will be constructed by drilling a pilot hole, assembling a cutter head in the mine and pulling the cutter to the surface. All material will fall to the mine floor and be discarded in the mine or brought to the surface via the hoist.”

Mining will be performed using continuous miners and shuttle cars, the application said. Coal from the development mining will be removed from the mine at the portal shaft via the hoist and placed in a temporary stockpile on site. It will be transported to another permitted coal preparation plant or remain on site until a preparation plant at the site is built.

“The development phase of the proposed mine will take 24 to 36 months,” said the application. “During that time, site location or slurry ponds, refuse disposal sites and related mine facilities will be finalized and a new permit application will be submitted to address the mining and operation phase.”

Blue Creek Energy is a subsidiary of Walter Energy’s Walter Minerals unit, said the U.S. Office of Surface Mining database. Blue Creek Energy was first listed with OSM at the end of 2011.

Walter Energy’s mining operations in Alabama include two longwall-equipped metallurgical coal mines in the Blue Creek seam; the No. 7 mine (which includes No. 7 East) and the No. 4 mine. It also includes one recently-acquired thermal coal longwall mine, North River, which is nearing the end of its operational life in 2013. Walter also has: one surface met coal mine, Reid School; one surface met and thermal coal mine, Swann’s Crossing; and one surface thermal coal mine, Choctaw. The coal from the No. 4 and 7 mines is currently sold as a high quality low- and mid-vol met coal.

Blue Creek Energy No. 1 is listed in a table of mines in Walter Energy’s Feb. 29 annual Form 10-K report. It is shown as being in the pre-feasibility stage. It has 81.9 million tonnes of recoverable reserves within 20,406 acres. The table shows the mine as working both the Blue Creek and Mary Lee coal seams. Another table shows this coal can be sold on the met and steam markets and that typical specs (wet basis) include 9% ash, 0.69% sulfur and 13,791 Btu/lb.

Notable is that Walter Energy started reporting things in tonnes after it acquired Canada-based Western Coal in April 2011.

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.