The U.S. Bureau of Land Management on Aug. 14, through a final “finding of no significant impact,” approved Colorado coal producer Bowie Resources LLC to add over 500 acres of new coal reserves to its Bowie No. 2 longwall mine.
The Bowie No. 2 mine has been in operation since November 1997 and is capable of producing approximately 5 million tons of coal annually, BLM noted. What it didn’t mention is that in recent years the company shifted mining out of the geologically-challenged northeast part of the coal reserve, into the better southwest area, allowing the mine as of about mid 2011 to start working its way back up to the old 5-million-tons per year production level.
U.S. Mine Safety and Health Administration data shows that Bowie No. 2 produced 1.5 million tons in the first half of this year, following production of 2.2 million tons in all of 2011 and only 1.3 million tons in all of 2010.
An application was filed by Bowie with the BLM Colorado State Office to modify two existing federal coal leases by adding a combined total of about 502.43 acres. BLM on April 30 had released a preliminary environmental assessment (EA) and unsigned finding of no significant impact for public comment on these proposed coal lease modifications. It issued a final EA in August.
The Bowie final EA noted that the lease modifications would provide the opportunity for a logical extension of the Bowie B coal seam workings beyond the current mine plan. Bowie Resources holds approximately 11,228 federal lease acres and approximately 1,696 acres of fee coal at this operation, the final EA added.
“The lease modifications would allow Bowie to continue operations by providing a logical extension to the mine’s current B-Seam workings,” said the final EA. “Bowie is currently mining the first of nine longwall panels west of Terror Creek. The longwall panels run in a north-south direction. Following the nine longwall panels, Bowie plans to mine four longwall panels, which run in an east-west direction. The four east-west panels are located north of the nine north-south panels. The lease modifications would allow three of the four east-west longwall panels to be lengthened by a total of nearly 8,000 feet. Without the lease modifications, approximately 8,000 feet of longwall coal would be permanently by-passed. Therefore, the modifications avoid bypassing approximately 3.25 million enhanced recoverable tons (1.20 million on existing leases and 2.05 million on the modification tracts).”
Within the lease modification areas, overburden depth is greater than 1,000 feet, but less than 2,300 feet. The coal would arrive at the surface to be handled by the existing coal handling facilities at the Bowie No. 2 mine and loaded primarily on Union Pacific trains for delivery. The same UP branch line, located along the North Fork of the Gunnison River, that serves Bowie No. 2 also serves the Elk Creek longwall mine of Oxbow Mining LLC and the West Elk longwall mine of Arch Coal (NYSE: ACI).
Bowie No. 2 is a supplier of steam coal, with a major customer since its inception being the Tennessee Valley Authority.
In looking at past and possible future coal activity in the area, the BLM final EA on the Bowie leasing mentions the fact that Oxbow Mining last year applied with BLM to explore a new area west of the Bowie reserves called the Oak Mesa area. Oak Mesa would be a possible new longwall mine to replace Elk Creek when it runs out of coal. Elk Creek is to the east of Bowie No. 2 (and the shut Bowie No. 1 mine), so the Elk Creek and Oak Mesa reserves don’t adjoin.
Said the final EA: “Oxbow Mining, LLC (Oak Mesa Project – coal exploration license) – a proposal to drill 43 exploration drill holes on private and federal lands into federal subsurface holdings. The entire exploration area covers about 13,873 acres, and temporary surface disturbances from road and pad construction would occur on about 32.86 acres.”