Cabot to develop Texas lignite mine for activated carbon feedstock

Cabot Corp. (NYSE: CBT) said March 19 that Cabot Norit Activated Carbon has received operating permits for its new lignite coal mine near Marshall, Tex., which will provide feedstock for an activated carbon plant.

As part of Cabot’s strategic plan to meet the anticipated quadrupling of demand for activated carbon for use in the coal-fired utility emissions control market, this mine is expected to begin production in 2014 and produce lignite for approximately 50 years. Securing this long-term raw material source enables Cabot to deliver unmatched supply assurance and consistent product performance.

The U.S. Environmental Protection Agency’s new Mercury and Air Toxics Standards (MATS) that are scheduled to take effect April 2015 are a key factor in this growth market for activated carbon.

As a leading supplier of activated carbon, Cabot said it is well positioned to be a strategic partner to coal-fired power plant owners and operators in mercury emission control today and in the future. To support this leadership position, and in addition to these operating permits for the new mine, Cabot has also secured permits and developed plans for seven new manufacturing lines in North America that give Cabot the ability to significantly increase current production capacity of their mercury control products.

Utilizing the latest construction management techniques, each new line can be installed in a modular fashion in less than one year in order to support supply contracts as demand develops. In preparation for the new mine, Cabot has purchased and relocated a dragline to the new mine site.

“The new mine and dragline represent Cabot’s commitment to support and extend our market leadership position in the mercury emission control market,” said Bart Kalkstein, vice president and general manager, Global Emission Control Solutions. “As demand accelerates, having access to a long-term raw material supply is critical for our support of our customers. The new mine will help ensure that we have an uninterrupted supply of lignite well into the future and can meet the quadrupling of market demand.”

Cabot is a global specialty chemicals and performance materials company, headquartered in Boston, Mass. In July 31 2012, Cabot completed the acquisition of all the issued and outstanding shares of Norit N.V. for about $1.1bn in cash. Norit develops, manufactures and sells activated carbon products and related delivery systems used in a range of applications, including air and water purification, food and beverages, pharmaceuticals and catalysts.

Norit had shortly before that takeover abandoned a plan for an IPO. In a prospectus filing made with the SEC while the IPO was still in the works, the company said that it acquired all of a former joint venture partner’s interest in existing leases to lignite reserves near Marshall, Tex., where it was developing its own lignite mine. “We expect the new lignite mine, which we expect will begin operations in 2014, will help ensure a reliable, cost-effective supply of one of the most important raw materials for our mercury removal activated carbons and hence reduce our reliance on external suppliers going forward,” the March 2012 Form F-1 filing said.

Norit expanded production capacity at its largest activated carbon facility in Marshall by about 37% with the addition of a new production line in 2009 to meet rising demand for mercury removal solutions. The production capacity increased by about 27% in 2011 with the addition of another new production line in Marshall. In addition, four additional production lines for the Marshall facility have received permitting approvals, Norit said at the time. In total, Norit estimated that these four new lines would approximately double production capacity at the Marshall facility.

The U.S. Mine Safety and Health Administration database shows Norit N.V. as the parent of Norit Americas Inc., which has listed under it the abandoned Darco strip lignite mine in Harrison County, with an office address in Marshall, Tex. The mine was first listed with MSHA under Norit Americas in 1985, and was listed before that under ICI Americas Inc. The Darco mine last produced coal in 2001, when it turned out 228,371 tons, according to MSHA data.

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.