Oxbow Mining readies Colorado coal reserve exploration

The U.S. Bureau of Land Management office in Colorado has granted a final approval to Oxbow Mining LLC to explore a 13,873-acre federal coal reserve as part of the company’s planning for an eventual replacement for its Elk Creek longwall mine nearby.

On May 6, 2011, Oxbow Mining filed the exploration application with BLM. Oxbow plans, under a final approval issued Sept. 11, to drill 43 exploration drill holes on private and federal lands into federal subsurface holdings. The drill holes would be completed from small (0.5-acre) drill pads, and would be drilled to a depth of 220 to 2,249 feet, depending on the location of each drill hole. The entire exploration area covers about 13,873 acres, and mostly temporary surface disturbances from road and pad construction would occur on about 33.5 acres.

“Coal exploration drilling is needed to determine seam reserve availability for possible leasing and development of a new underground coal mine in Delta County,” BLM noted in a final environmental assessment document. “The proposed Oak Mesa exploration area is located in Delta County to the west of the Orchard Valley Mine, a.k.a. the Bowie No. 1 Mine. The exploration drilling is proposed to confirm the quality, quantity, and extent of the coal within this area. The proposed Oak Mesa project extends from the western edge of the Bowie Mine holdings westward across the mesa to the Leroux Creek area, encompassing about 13,873 acres, north of Hotchkiss. The area does not reach into the Grand Mesa National Forest. The Oak Mesa Project is adjacent to existing coal leases in an area of known coal reserves.”

Oxbow operates one of three existing mines in the area

BLM’s Uncompahgre Field Office currently manages several active federal coal leases related to three nearby coal mines located in the valley of the North Fork of the Gunnison River near Paonia, Colo. The Bowie No. 2 longwall mine of Bowie Resources, the West Elk longwall mine of Arch Coal (NYSE: ACI) and Elk Creek mine of Oxbow Mining are actively producing mines, with a total annual output of nearly 15 million tons, BLM noted. While each mining operation controls coal reserves with a mix of federal and fee and/or state coal, about 90% of local production is federal.

General access to the proposed exploration area is from two directions—from the west off of 3100 Road (Leroux Creek Road) and Oak Mesa Road, and from the east off of Steven’s Gulch Road (FS Rd 701). Primary access to the project area is on private lands and private ranch roads. There is no existing public access to the exploration area, other than Oak Mesa Rd. There is an extensive network of private roads within the exploration area that is used for ranching and other private access.

The North Fork Branch of the Union Pacific Railroad operates exclusively to serve the three existing coal mines. This line branches from the main line in Grand Junction and passes through Delta, Hotchkiss, Paonia and Somerset. The line actually goes near the Oak Creek exploration area first, then continues on to serve Bowie No. 2 and then Elk Creek, with a terminus at West Elk.

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.