Arch’s ICG Hazard unit pursues new coal mine permitting

The ICG Hazard LLC unit of Arch Coal (NYSE: ACI) is pursuing a wastewater permit from the Kentucky Department for Environmental Protection for a surface coal mining project in Leslie County.

The DEP on May 25 put out for comment a June 2011 socioeconomic report on the project written by the company. The new wastewater permit is needed related to a revision of a Kentucky Department for Natural Resources mine permit, #866-0281, for the Thunder Ridge mining operation. This operation is near Hyden in Leslie County and this permitting will allow continued employment for 73 people.

“There is an estimated 4,900,000 recoverable tons remaining within the permitted boundary,” the report noted. “Current coal spot market prices as of April 2011 have been estimated at 78.85 per short ton. The severance tax rate for coal in Kentucky is 4.5% of the gross market value. The proposed project will produce approximately $17,386,425 in tax dollars at current coal spot market prices over the life of the mine.”

Previous logging and mining operations have affected the immediate watershed and surrounding communities through the introduction of sediment-laden water to the local and regional watersheds, the report noted. To remedy these problems and prevent any further influx of sediment-laden water to the local and regional watersheds, the proposed project will create large pond structures to improve the quality of the discharged water.

Arch, which picked up ICG Hazard in a June 2011 buy of International Coal Group, said about this operation in its Feb. 29 annual Form 10-K report: “Hazard/Flint Ridge is a mining complex that consists of four surface mines, an underground mining complex, a preparation plant, a unit train loadout and other support facilities located on approximately 115,000 acres in eastern Kentucky. The coal from Hazard’s mines is being extracted from the Hazard 10, Hazard 9, Hazard 8, Hazard 7 and Hazard 5A seams. Nearly all of the surface-mined coal is marketed as a blend of shipped direct product with the remainder being processed at the Flint Ridge preparation plant. The underground coal is all processed. Coal is transported by on-highway trucks from the mines to the rail loadout, which is served by CSX. Some coal is direct shipped to the customer by truck. A majority of the coal reserves are owned; the remainder are held through private leases. The mining complex had approximately 65.2 million tons of proven and probable reserves at December 31, 2011, which could sustain current production levels until at least 2030. The loadout facility can load a 12,500-ton train in less than 4 hours.”

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.