Montana regulators approve air permit change for Decker coal mine

The Montana Department of Environmental Quality on July 11 proposed to issue an administrative amendment to an air permit for the Decker surface coal mine, with the changes related in part to resumption of mining in the East pits at the mine.

The DEQ noted that Decker Coal can appeal this decision to the Board of Environmental Review. A request for hearing must be filed by July 26. The permit will become final on July 27, unless the board orders a stay on the permit.

On April 26, the department received a letter from Decker requesting the administrative amendment. “Decker has resumed mining activities at the East pits, and Decker proposes to reinstate a Hi-Volume sampler at site 30-003-0021,” the agency added. “Inter-Mountain Labs (IML) Air Science will provide inspection, maintenance, and calibration services for this sampler prior to start up. The sampler will be operated in accordance with Decker’s approved Quality Assurance Project Plan (QAPP).”

Under this air permit, the maximum annual coal production of the mine is limited to 16 million tons per year. Any increase above this level may require a permit alteration. Decker is a Powder River Basin coal mine located about 2 miles north of Decker, Mont., and includes the West, North, and East Decker mining areas. One interesting point is that a little of this coal is sold to the public at large, which is unusual in the modern coal business. “Decker has established a retail coal sales area within the existing Decker Coal Mine Permitted Facilities Area,” said the DEQ. “Activities include crushing, sizing, stockpiling, loading, weighing, and selling coal to the general public.”

The Decker mine is 50-50 owned by Australia’s Ambre Energy (the operating partner) and Cloud Peak Energy (NYSE: CLD). Cloud Peak Energy, during its IPO process a couple of years ago, indicated that Decker might close soon due to high costs and limited reserves. But that closure has been something of a moving target, with Ambre, which bought its half of the mine last year, indicating the mine should have a long life ahead of it.

U.S. Mine Safety and Health Administration data shows that Decker produced 1.15 million tons in the first half of this year and 3.1 million tons in all of 2011. The mine’s peak annual production in the 2000-2011 period came in 2002, when it turned out 10 million tons. The mine has struggled since losing long-time, high-priced contract business years ago with Commonwealth Edison at Illinois power plants ComEd no longer owns.

Ambre targets export market for Decker

“Coals such as those at Ambre Energy’s newly acquired Decker coal mine based in Montana are the best suited coals for the Asian export market,” said the Ambre website. “In addition to the state’s geographical advantage to the US west coast, the Montana coals have higher energy levels compared to the southern PRB in Wyoming.”

The website said Ambre looked for a long time at getting into the U.S. coal business. “Large coal deposits with low ash content and low to moderate moisture content located close to rail infrastructure have been the target. In particular, Ambre Energy conducted technical due diligence and market assessments over two operating coal mines – the Decker Coal Mine (Decker) and the Black Butte Coal Mine (Black Butte), and two non-operating coal deposits known as the Big Horn Deposit (Big Horn) and the Rosebud Deposit (Rosebud) in Montana and Wyoming. Successful negotiations during 2010/11 resulted in Ambre Energy acquiring a stake in these assets previously held by Level 3 Communications, which includes 50% ownership of the Decker and Black Butte mines and 100% ownership of the Big Horn and Rosebud deposits. With these acquisitions complete, Ambre Energy is on track to becoming a major supplier of US thermal coal to the international market.”

The company said the Decker mine, as of a May 2010 study, had coal resources of 204.6 million tons measured, 126 million tons indicated and 85 million tons inferred.

As part of the mine acquisition transaction completed in November 2011 with Level 3, Ambre Energy also assumed 100% ownership of the Big Horn coal deposit and the Rosebud coal deposit in Wyoming.

  • The Big Horn coal deposit acquired by Ambre is located in Sheridan County, about 15 miles southwest of Decker. A mine was operated at the site from 1944 until 2000, producing up to 4.5 million tons of coal per year at the height of its productivity. Today the mine is fully reclaimed with the exception of some infrastructure and a solid waste disposal site, the Ambre website noted. MSHA data shows an abandoned Big Horn strip mine in Sheridan County under Big Horn Coal that last produced coal in 2000.
  • The Rosebud coal deposit is located in the Hanna Basin in Carbon County, which is an area of bituminous coal reserves, not the subbituminous coal found in the PRB. The Rosebud mine was opened in 1955 and operated until the early 1990s. The mine produced approximately 3 million tons per year at the height of its productivity in the 1970s. Today, the mine is nearly fully reclaimed and no coal production occurs, the website said. The MSHA database shows an abandoned Rosebud strip mine in Carbon County under Rosebud Coal Sales that last produced coal in 1992.
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.