The U.S. Bureau of Land Management said in a July 10 Federal Register notice that it is looking for parties to share exploration expenses with Kiewit Mining Properties on a coal reserve area in the Wyoming end of the Powder River Basin next to Kiewit’s Buckskin strip mine.
The 2,045-acre tract is in Campbell County. “Kiewit Mining Properties, Inc., has applied to the BLM for a coal exploration license on public land adjacent to their Buckskin Mine,” said the notice. “The purpose of the exploration program is to obtain structural and quality information of the coal.”
Buckskin is in a group of low-Btu mines north of Gillette that are captive to the BNSF Railway, well north of the terminus of the Union Pacific/BNSF Joint Line. These mines have a tough time competing against the high-Btu PRB mines to the south, like Peabody Energy’s (NYSE: BTU) North Antelope Rochelle mine, the biggest coal mine in the U.S. at over 100 million tons per year of production. Buckskin is the northernmost Wyoming PRB mine, so it has no mine bounding it on the north, while Peabody’s low-Btu Rawhide mine hugs its south border.
“One of the most productive mines in the United States, the Buckskin Mine produces more than 27 million tons of coal per year from the Anderson and Canyon geologic formations,” said the Kiewit Mining Group website. “Since 1981, Buckskin has shipped more than 406 million tons of high-quality, low sulfur coal from the Southern Powder River Basin. Buckskin Mining Company, a subsidiary of Kiewit Mining Group Inc., moves more than 70 million cu. yd. of overburden annually to uncover the 110-ft.-thick coal seam. The use of multiple silos, in-pit crushing and an on-line quality analyzer allow crews to complete sophisticated blending techniques and produce a ‘super compliant’ fuel that meets customers’ exact specifications.”
U.S. Mine Safety and Health Administration data shows that Buckskin produced 4.9 million tons in the first quarter of this year, off a pace that saw it produce nearly 25 million tons in all of 2011.