The Ohio Division of Mineral Resources Management issued three coal mine permits in the month of September, with one of them covering a brand-new strip mine of Rosebud Mining.
A list of issued permits, updated by the division to Oct. 1, shows three permits issued last month, including two that involved additions to existing permits and one for a new mine.
- Rosebud Mining, based in Pennsylvania and controlled by J. Clifford Forrest, got a permit on Sept. 28 for the 200-acre Smith Evergreen strip mine. This mine would work the #6A and #7 coal seams at a site in Carroll County. This mine is not listed in the U.S. Mine Safety and Health Administration database, at least under that name.
- A permit was issued Sept. 26 to Oxford Mining Co. LLC, a unit of Oxford Resource Partners LP (NYSE: OXF), for a 47-acre addition to the New Lex North strip mine in Perry County. This permit covers mining of the #6 coal seam. The last permit addition for this mine, covering 380 acres, came out in 2010, the list shows. New Lex North is not listed with MSHA under that name.
- Harrison Resources LLC got a permit on Sept. 17 for a 542-acre addition to the Sexton 2 strip mine in Harrison County. The permit covers mining in the #8, #8A and #9 coal seams. The list shows that the last permit addition for this mine was issued in 2008 and covered 555 acres. MSHA data shows Harrison Resources as controlled by Charles Ungurean and that Sexton 2, the company’s only mine listed with MSHA, produced 332,597 tons in the first half of this year and 791,060 tons in all of 2011.
Incidentally, the MSHA designation of Ungurean as the controlling party for Harrison Resources is a bit simplistic. Ungurean is a founder of Oxford Resources Partners, and Harrison Resources is an Oxford joint venture with CONSOL Energy (NYSE: CNX).
Said Oxford’s March 14 Form 10-K annual report: “The Harrison mining complex is located in Harrison County, Ohio, and currently consists of the Harrison mine. Mining operations at this mining complex began in 2007. The Harrison mining complex is owned by Harrison Resources. We own 51% of Harrison Resources and CONSOL Energy owns the remaining 49% of Harrison Resources indirectly through one of its subsidiaries. We entered into this joint venture in 2007 to mine coal reserves purchased from CONSOL Energy. We manage all of the operations of, and perform all of the contract mining and marketing services for, Harrison Resources.”
Since its formation in 2007, Harrison Resources has acquired 6.9 million tons of proven and probable coal reserves from CONSOL, the Form 10-K said. “We believe that CONSOL Energy controls additional reserves in Harrison County, Ohio that could be acquired by Harrison Resources in the future,” it added. “However, CONSOL Energy has no obligation to sell those reserves to Harrison Resources, and we have no assurance that Harrison Resources will be able to acquire those reserves from CONSOL Energy on acceptable terms.”
Operations at the Harrison complex target the Pittsburgh #8, Redstone #8A and Meigs Creek #9 coal seams. As of Dec. 31, 2011, the Harrison complex included 4.3 million tons of proven and probable coal reserves. The infrastructure at this mining complex includes a coal crusher and a truck scale. Coal is trucked to the Bellaire river terminal, the Cadiz rail loadout facility or directly to the customer. This complex uses the area method of surface mining and produced 0.8 million tons of coal in 2011.