Australian company wants to explore Alaskan coal reserves

The Alaska Department of Natural Resources said June 7 that it has extended the public comment period for the Chickaloon coal exploration permit being sought by Riversdale Alaska LLC.

The deadline to submit written comment now closes on June 18. The DNR’s Division of Mining, Land and Water (DMLW) has received a request from Riversdale Alaska, a subsidiary of Riversdale Resources Pty Ltd. out of New South Wales, Australia, to review a coal exploration application. This exploration permit would be issued for a period of two years.

The proposed exploration activities are located about three miles northwest of Chickaloon. A total of 9,927.60 acres of land are within the Chickaloon exploration area in which Alaska Mental Health Trust Authority is the owner of subsurface rights and the state of Alaska is the owner of surface rights.

The proposed exploration activities will consist of drilling up to 25 exploration holes. In order to acquire data on the groundwater resources within the exploration area some of these drillholes may be retained as hydrologic monitoring wells. All drill sites will be reclaimed and all drillholes not retained as monitoring wells would be sealed immediately upon completion of work at the site. All equipment used on site will be removed upon completion of the exploration program, the DNR noted.

Usibelli Coal Mine Inc. has for many years been Alaska’s only coal producer. But various parties over the years have shown an interest in developing coal reserves in the state, which, compared to the mainland U.S., is closer to some Pacific Rim coal markets like Japan.

The state Trust Land Office in January announced that Riversdale was the highest bidder on this 9,927.6 acres of state-controlled coal reserves around Chickaloon. This is a low-sulfur bituminous coal, higher in quality than Usibelli’s current sub-bituminous production. The office said it got competing bids for this tract from Usibelli, Alaska Mining and Energy Co., and Arctic Coal LLC.

“Riversdale Resources is searching for marketable coking coal deposits on the coal lease in Chickaloon,” said its exploration permit application. “The purpose of the exploration program is to determine if there are sufficient coal resources to support a coal mine. Consequently, prior to evaluating the results from the exploration program, it is premature to project if a surface mine, underground mine or a combination of the two will be developed. Any future mine development decisions will be made after a thorough evaluation of the area is complete and the required environmental baseline data has been collected and reviewed.”

The Phase 1 summer 2012 exploration drilling program will focus on an area along the Castle Mountain Mine Road to get a better understanding of the coal geology and subsurface structure in the center portion of the coal lease. From this initial round of drilling, samples will also be taken and the extent of the coal-bearing portion of the Chickaloon Formation along the road will be identified. Phase 2 and Phase 3 exploratory drilling programs are necessary to adequately map and identify the coal resource and geology over the entire lease area, the application noted. “The scope and extent of the later phase exploration program cannot be fully determined until the results of Phase 1 drilling have been analyzed. It can be anticipated that 10 to 15 boreholes will be completed in each future exploration phase.”

A Riversdale investor presentation said one of the advantages of the Chickaloon project is that it is near existing export terminal capacity at Port MacKenzie and Port Seward. The company said it is targeting a stock IPO prior to December 2013, after it has further advanced the Chickaloon project.

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.