Arch unit adds to coal mine in eastern Kentucky

The ICG Hazard LLC unit of Arch Coal (NYSE: ACI) is seeking a wastewater permit covering an expanded area, called Bearville West, for an existing coal mine in Knott County, Ky.

The Kentucky Department for Environmental Protection put out for comment on Sept. 26 a socioeconomic report on the project written by the company. The project is also covered under an amendment to an existing surface mine operation (covered under KDNR Permit No. 860-0454, Amendment No. 1). The site is located on Balls Fork of Troublesome Creek in Knott County. The nearest community is Bearville, which is located about 0.67 miles southeast of the mine area to be added under Amendment 1.

This permit amendment will allow for the continuation of about 30 higher wage permanent jobs in the area work force, the report said. Using the 2011 coal average price of $80/ton and the estimated lifetime coal production for the mine of about 3.5 million tons, ICG anticipates that the proposed amendment to the Bearville West mine will generated the following tax revenue: Federal Excise Tax at $1.10/ton = $ 3.85m; Reclamation Tax at $0.35/ton = $ 1.23m; and KY Severance Tax at 4.5% sales = $ 12.6m.

ICG Hazard is one of the operations that Arch picked up in a June 2011 purchase of International Coal Group. Arch said about this operation in its Feb. 29 Form 10-K annual report: “Hazard/Flint Ridge is a mining complex that consists of four surface mines, an underground mining complex, a preparation plant, a unit train loadout and other support facilities located on approximately 115,000 acres in eastern Kentucky. The coal from Hazard’s mines is being extracted from the Hazard 10, Hazard 9, Hazard 8, Hazard 7 and Hazard 5A seams. Nearly all of the surface-mined coal is marketed as a blend of shipped direct product with the remainder being processed at the Flint Ridge preparation plant. The underground coal is all processed. Coal is transported by on-highway trucks from the mines to the rail loadout, which is served by CSX. Some coal is direct shipped to the customer by truck. A majority of the coal reserves are owned; the remainder are held through private leases. The mining complex had approximately 65.2 million tons of proven and probable reserves at December 31, 2011, which could sustain current production levels until at least 2030. The loadout facility can load a 12,500-ton train in less than 4 hours.”

The U.S. Mine Safety and Health Administration database shows that the existing Bearville strip mine of ICG Hazard got a production start in the first quarter of 2010 and turned out 550,895 tons in all of 2011 and 181,201 tons in the first half of this year.

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.