Pennsylvania board leases coal to two producers

The Pennsylvania Board of Game Commissioners on Sept. 25 approved a coal mining lease for P&N Coal Co. Inc., of Punxsutawney involving a 120-acre portion of State Game Land 174 in Indiana County.

P&N Coal currently is surface mining on private lands adjacent to State Game Land 174 and wants extend its mining operations onto the state land, the commission noted. The game commission does not own the coal, but is the owner of the surface support rights on this tract of land.

Under the lease, P&N Coal will surface mine and remove about 221,000 tons of coal from a portion of State Game Land 174. This re-mining and reclamation operation will have a total surface impact of 120 acres for the actual coal removal, erosion and sedimentation controls and operational support. The proposed surface mine area has been previously deep and surface mined resulting in a scarred landscape that will be reclaimed after this new mining. 

In exchange for the lease, P&N Coal will make an initial advanced surface support payment totaling $250,000 to be deposited into an interest-bearing escrow account for the future purchase of wildlife habitats, lands or other uses incidental to hunting, furtaking and wildlife resource management. Once P&N Coal recoups its advance royalty payments, it will pay the commission on a monthly basis at a royalty rate of $2.50 per ton or 6% of the then current F.O.B. pit price, whichever is greater, for each marketable ton of coal mined and removed from the lease area. All of these subsequent royalty payments will be deposited into the Game Fund.

U.S. Mine Safety and Health Administration data shows P&N Coal as controlled by Prushnok Coal Co. Inc., and that it has three surface mines and a facility in Pennsylvania listed with that agency.

Also, the board approved a surface mining lease with Targe Coal Energy LLC, also known as Bedrock Mines LP, of Pittsburgh, involving State Game Land 320 in Jefferson County. Bedrock currently is surface-mining a 95-acre site on private lands adjacent to State Game Land 320 and wants to extend its operations onto that property. 

Under the lease, Bedrock will surface mine and remove about 14,000 tons of coal from a 4.8-acre portion of State Game Land 320. The proposed mining operation will have a surface impact of about four acres for the coal removal and operational support on the State Game Land. The proposed site has undergone previous surface mining.

In exchange for the lease, Targe Energy will make an initial advanced surface support payment of $25,000 to be deposited into an interest-bearing escrow account for the future purchase of wildlife habitats, lands or other uses incidental to hunting, furtaking and wildlife resource management. Once Bedrock recoups its initial advance royalty payment, it will pay the commission on a monthly basis at a royalty rate of $2.50 per ton or 12% of the then current F.O.B. pit price, whichever is greater, for each marketable ton of coal mined and removed from the lease area. All of these subsequent royalty payments will be deposited into the Game Fund.

MSHA data shows Bedrock Mines, controlled by William Spence, with two coal strip mines in Pennsylvania.

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.