CONSOL Energy (NYSE: CNX), which idled its Emery deep mine in Utah in December 2010 due to poor market conditions, has decided to shift the mine from a “warm idling” status to a more long-term shutdown, said a recent letter from the U.S. Bureau of Land Management to the company.
The letter was stamped as having been received by the Utah Division of Oil, Gas & Mining on July 23. On June 26, BLM received from CNX Land Resources (Consol) a formal notice of change in the level of operations at the mine. The mine has a Logical Mining Unit (LMU) that consists of a majority of private coal lands and two federal coal leases. There is also a stand-alone federal lease that is not in the LMU.
Consol ceased coal production in December 2010 due to market conditions which resulted in a “warm idling” status for the mine, the BLM letter noted. The BLM approved this status based on changing an existing resource recovery and protection plan (R2P2). Shutting down production of federal coal due to negative market conditions is an acceptable reason to modify the R2P2.
“Consol’s proposed change in operations under resource protection: Since economic and market conditions have not improved over time, Consol proposes to block access with stoppings at the portal and suspend all maintenance activities in the mine,” said the BLM letter. “All mobile equipment will be removed from underground and power to the mine workings will be shut off which will suspend ventilation, communication and underground water pumping systems.”
In order for Consol to be in compliance with R2P2 needs, a plan must be submitted to the BLM showing how the remaining federal resources will be protected. The plan will require BLM approval before the company implements any sealing plan. The plan needs to consider various things, including: location of the stoppings (block walls) proposed for sealing the mine; stoppings construction material and deployment methodology; a water pumping and monitoring plan; and a “Resumption of Operations” plan containing a schedule for notifying government authorities of a start-up in advance including a map showing current face locations and which section(s) are currently projected to begin mining first.
The Emery mine, listed with the U.S. Mine Safety and Health Administration under Consolidation Coal, produced 999,421 tons in 2010 and 1.2 million tons in 2009. MSHA shows the mine with an average of 33 employees in the first quarter of this year and 26 in the second quarter of this year. That is a lot of employees for a mine producing no coal and no revenue, with this change in shutdown plan apparently designed to reduce those employee numbers.