Mechel Bluestone Inc., a unit of Russia’s Mechel OAO, applied Dec. 31 at the West Virginia Public Service Commission for a temporary waiver of certain coal trucking weight rules so that it can work around operational issues related to a new prep plant.
“Taggart Global, LLC is constructing a new coal washing facility, including a railroad car flood load out facility which is fed by a conveyor belt system at Bishop, WV,” said the application. “As a result we must relocate our Bishop Loadout certified truck scale, PSC Site ID (COO00768 1R) which is receiving coal from Red Fox Surface Mine, PSC Site ID (S00007282A). Mechel Bluestone, Inc. will use certified weights from the Red Fox site for coal shipped to the Bishop Loadout during the relocation of the Bishop Loadout truck scale.”
Mechel Bluestone is requesting relief for 90 days starting on Jan. 2, 2013, due to the relocation of the certified truck scales. Commission Rule 4.7.b requires receivers of coal to weigh coal shipments on certified truck scales.
Notable is that the Red Fox strip mine, listed with the U.S. Mine Safety and Health Administration under Mechel’s Justice Energy unit, is currently classified by that agency as “nonproducing,” with output of 416,522 tons in the first nine months of 2011 and 765,855 tons in all of 2011.
Mechel reported Oct. 22 that it has temporarily halted most of the mining facilities of Mechel Bluestone. Mechel decided to temporarily suspend mining at some facilities of Mechel Bluestone’s mining complexes, which are Keystone, Justice Energy and Dynamic Energy. The Frontier mine in Wyoming County, which is part of Dynamic Energy, as well as the K-2, Red Fox and Coal Mountain wash plants, will continue operating, the company said at the time.
The Bluestone mining business sold 3.4 million tonnes of coking and steam coal in 2011, 71% of which was sold to the export market, said Mechel in an annual Form 20-F report filed May 10 at the SEC. The Bluestone operations produced 4.9 million tonnes of run-of-mine (raw) coking coal in 2011, up from 4.1 million tonnes in 2010. Bluestone produced 0.5 million tonnes of run-of-mine steam coal in 2011, down from 0.7 million tonnes in 2010.
Substantially all of the Bluestone coal was sold on the spot market. A major portion of production is shipped via the Norfolk Southern railroad. These shipments either go directly to coking plants in North America or to port facilities for transloading into ships.
The Bluestone mines, bought in May 2009 from coal operator Jim Justice II, are located in McDowell and Wyoming counties in southern West Virginia, near Beckley. The mines are organized around three mining complexes: Keystone No. 1 and No. 2 (collectively called Keystone), Justice Energy and Dynamic Energy, all of which are located in close proximity to each other.
- The mines in the Keystone complex produce premium low-vol coking coal. The complex includes two active surface mines and three active deep mines. Coal is hauled by truck directly to the complex’s prep plant for washing and is then sent to its rail loadout, which is served by the Norfolk Southern.
- The mines in the Justice Energy complex produce mid-vol coking coal. Coal is hauled by truck directly to the complex’s prep plant (which is leased from coal landholder Natural Resource Partners) for washing and is then dispatched to its rail loadout, which is served by the Norfolk Southern.
- The mines in the Dynamic Energy complex produce high-vol coking coal. Coal from the mines is hauled by truck directly to the complex’s prep plant (which is leased from Natural Resource Partners) for washing and then moves to the NS-served loadout.