TECO Coal unit adds to surface mine in Pike County, Ky.

Premier Elkhorn Coal, which is a unit of TECO Coal, is pursuing a wastewater permit from the Kentucky Department for Environmental Protection for a strip mining project located about 0.7 miles south of Burke Branch in Pike County.

The project also involved Kentucky Department for Natural Resources mine permit #898-0468 A2 and R9, said a socioeconomic report on the project, written by the company, and released by the DEP for comment on July 27. Both of these projects will be facilitating the removal of coal reserves from the Taylor, Hamlin, Whitesburg and Fireclay seams. The Fireclay Rider, due to its sparse presence and limited thickness within the proposed areas, will be removed in the Fireclay cut.

Amendment #2 will add 57.38 acres of surface disturbance and will not add any underground/auger acreage making a total permit area of 363.75 acres within the amended permit boundary. Revision 9 will add 13.18 acres of surface disturbance and will not add any underground/auger acreage making a total permit area of 376.93 acres within the revised permit boundary.

Assuming there are 40 workers employed at a given mine site, and assuming the median miner makes approximately $50,000 a year for five years, then this equates to $10m of taxable income into the general tax base and local economy.

“The proposed operations would result in $1,165,054 of coal severance tax revenue that could be utilized and returned back into the local community,” the report noted. “This amount is based upon approximately 1,035,605 tons of coal being mined at an average of $2.25 per ton with 50% severance tax money being returned to the community.”

The Feb. 24 Form 10-K annual report of TECO Coal parent TECO Energy (NYSE: TE) said about this operation: “Located near Myra, in Pike County, Kentucky, Premier Elkhorn Coal Company is supplied by production from eight underground mines and five surface mines. Principal products include metallurgical and PCI coal for the steel mills, high-quality steam coal for utilities and specialty stoker products for ferro-silicon and industrial customers. Facilities include a unit train load-out with a 200 car siding capable of loading at 6,000 tons per hour as well as a single car siding. Products from this location are shipped via CSXT Railroad and trucking contractors to destinations in North America and internationally. … In total, Premier Elkhorn Coal produced 2.2 million tons of coal in 2011 leaving a reserve base of 136.0 million recoverable tons, including the Burke Branch development reserves described below.”

Notable is that this new permitting is near Burke Branch, but it isn’t clear if this permitting is associated with the Burke Branch project mentioned in the Form 10-K.

The Form 10-K added: “Marshall Miller & Associates, Inc. (MM&A) has completed an audit of the Glamorgan and Lower Banner coal deposits associated with the New Frontier Project-Burke Branch Development, which is controlled by TECO Coal at its Premier Elkhorn Coal operating subsidiary. The subject property is located in Pike and Letcher Counties in eastern Kentucky and a substantial portion of the mineral rights for the subject coal deposits is owned by TECO Coal’s subsidiary, Pike-Letcher Land. The remainder of the mineral is leased from other entities under long-term lease agreements. … TECO Coal estimates that it controls 65.0 million recoverable tons of demonstrated coal reserves within the Burke Branch Development, as of Aug. 31, 2011. Of these TECO Coal total demonstrated reserves, an estimated 56.6 million recoverable tons (87%) are owned and 8.4 million tons (13%) are leased. An additional 23.4 million tons have been estimated by TECO Coal and classified as non-reserve coal deposits (resources). … TECO Coal has received an amendment to an existing permit to allow surface excavation and development as well as slope access to a portion of these reserves and will apply for an amendment to a second permit in 2012 to allow slope access to the remainder of the reserves.”

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.