On Sept. 17, the Illinois Environmental Protection Agency approved a new NPDES water discharge permit for Prairie Coal Co. LLC, a unit of Arch Coal (NYSE: ACI) that plans to develop the new Lost Prairie room-and-pillar mine, located in Perry County, 6.6 miles northwest of Pinckneyville, Ill.
The NPDES permit covers the above-ground facilities for the new mine. The facility will contain a processing plant, coal stockpiles, refuse disposal areas, railroad loop, and support areas. The permitted area of the above-ground facilities will be 848 acres of which 399.3 will be disturbed and 448.7 will remain undisturbed. The proposed water discharge is to an unnamed tributary of Wolf Creek. The prep plant rejects pond is not designed to discharge; it will be operated as part of a closed circuit system, the IEPA noted.
A mine permit for the project was issued last year by the Illinois Office of Mines and Minerals. The OMM permit shows this as a room-and-pillar operation that would work the Herrin No. 6 coal seam at a depth underground ranging from 146 to 237 vertical feet within a 3,605-acre “shadow area.” A shadow area is the underground coal reserve area of the mine and is much larger than the surface area impacted by the operation.
An Arch Coal official said at a March 21 IEPA hearing on the draft NPDES permit that the company was in discussion with several unnamed possible steam coal customers for this coal. James Kliche, a mining engineer at Arch Coal, gave an opening statement at the hearing that described the project and Arch’s past as a good neighbor when it had operated now-shut coal mining operations in this same area. Arch Coal presently owns a 49% equity interest in Illinois producer Knight Hawk Coal and owns and operates the Viper deep mine in central Illinois, Kliche noted. Arch got Viper in a June 2011 buy of International Coal Group.
“We see market opportunities continue to develop for this coal as more power plants install scrubbers,” Kliche told hearing attenders.
Kliche later added at the March 21 hearing: “We are currently discussing coal supply contracts with several utilities, which would enable the initiation of construction of the mine. The future Lost Prairie mine would infuse Perry County with new jobs and spur economic development. The mine is to be developed once coal commitments are secured in the next one to three years. Mine construction costs will be about $250 [million] to $300 million. Annual coal production will be about three and a half million tons a year. Ultimate mine employment would be 240 to 260 people, with the majority recruited locally from the vicinity in Perry County. Payroll and benefits are anticipated to be about $25 [million] to $30 million a year.”
An Arch spokesperson noted Sept. 19 that the Lost Prairie project still needs two more permits and that a mine development timeline depends on the sales efforts for this coal.