A new unit of Arch Coal (NYSE: ACI), Shelby Run Mining Co. LLC, applied April 27 at the West Virginia Department of Environmental Protection for a permit on the new Shelby Run room-and-pillar mine, the latest piece of a planned new metallurgical coal mine complex in Taylor County.
The application covers 41 surface acres of support area, the deep mine and a loading facility to be located near Wendel in Taylor County. The mine would work the Lower Kittanning coal seam. Based on past DEP permitting for mines like this, it could be two years or more before the agency issues this permit. The first mine at this complex, now in production, ran into lengthy permitting delays due to protests by local citizens.
Shelby Run Mining was listed in the U.S. Office of Surface Mining database on Feb. 10, with several top Arch executives shown as officers of the company.
Arch Coal acquired this property in a June 2011 buy of International Coal Group. The complex currently consists of the Tygart Valley No. 1 deep mine (recently renamed the Leer mine) that is in pre-longwall development production. U.S. Mine Safety and Health Administration data shows that this first mine, under ICG Tygart Valley LLC, produced 4,008 tons in the first quarter of this year and 9,761 tons in the fourth quarter of 2011, its first quarter of production.
Said Arch about this property in its Feb. 29 Form 10-K annual report: “The Tygart Valley property, located in Taylor County, West Virginia included approximately 165.9 million tons of deep coal reserves as of December 31, 2011 of both steam and metallurgical quality coal in the Lower Kittanning seam, covering approximately 68,300 acres. Construction of the Tygart Valley mining complex began in June 2010 and initial coal production commenced in November, 2011. At full output, Tygart Valley is designed to have 3.5 million tons of capacity per year of high quality coal that is well suited to both the utility market and the high volatile metallurgical market.”
Arch Coal said in a Feb. 2 conference presentation that it plans to develop a multiple-mine complex producing high-vol A met coal at this site. A map in the presentation, that didn’t have details on the mines themselves, shows Tygart Valley, with the Shelby Run property just to the west of it. To the northwest of Tygart Valley, and to the north of Shelby Run, is the Tucker Run property. To the northwest of Tucker Run is the Tygart No. 3 property. To the southwest of Shelby Run is the Rosemont property. Rosemont merges into the existing Sentinel complex of Arch on its southeast side. Sentinel is an operation also acquired in the ICG deal.
Arch had said earlier this year that it is in the preliminary stages of developing the new Shelby Run mine. The initial mining plan utilizes continuous miners with a run rate of about 1 million tons per year starting in mid 2015. Shelby Run would produce a high-vol A coal, like Tygart No. 1, and also like Tygart No. 1, could produce up to 3.5 million tons per year if it eventually becomes a longwall operation. Notable is that the Shelby Run permit application from April 27 covers only room-and-pillar mining, but the permit could be altered later to also cover a longwall.
Arch’s Ark Land unit on April 23 filed separately at the DEP for an exploration permit on the Tucker-Shelby Run #1 area in Taylor County.