Arch Coal (NYSE: ACI) announced Dec. 9 that its new Leer mine in northern West Virginia has begun operating its longwall mining system, representing a major milestone in the development of the overall mining complex.
The Leer mine, located in Taylor County, is expected to ramp up production during the first quarter of 2014, and to produce more than 3 million tons of coal on an annualized basis thereafter from the Lower Kittanning coal seam. The majority of the output will be sold into domestic and international metallurgical coal markets for use in the production of steel.
The mine is listed with the U.S. Mine Safety and Health Administration under ACI Tygart Valley. It got a production start in the fourth quarter of 2011 and produced 55,526 tons in all of 2012, ramping up to 321,909 tons in the first nine months of this year.
Arch bought this in-development mine, plus nearby properties that may host at least two more deep mines, in a June 2011 purchase of International Coal Group. West Virginia Department of Environmental Protection records show that mine permits were issued this year to Arch’s Shelby Run Mining unit for two additional deep mines in Taylor County, called Shelby Run (permit issued on Jan. 30) and Tucker Run (issued Nov. 19). These two mines would also work the Lower Kittanning seam.
“With the start-up of the longwall, the Leer mine is poised to become a world-class supplier of metallurgical coal and a cornerstone of Arch’s Appalachian operations for many years to come,” said John Eaves, Arch’s president and chief executive officer. “We applaud the great work of the Leer team in completing this significant step, and we look forward to a safe, productive and profitable future for this important new mine.”
Arch has invested more than $400m to develop the Leer mine, which produces a high-quality, high-volatile “A” coking coal product that is attracting significant interest in world metallurgical markets. With its talented 400-person workforce and highly efficient longwall system, the mine will benefit from a very competitive cost structure once it scales up to full production, Arch said.
“Our investment in the Leer mine underscores our commitment to West Virginia and our focus on producing the highest quality metallurgical coals to meet the needs of global steelmakers,” said Eaves. “With the addition of Leer, we are advancing our long-term, strategic objective of increasing our penetration into domestic and seaborne coking coal markets.”
West Virginia Governor Earl Ray Tomblin said: “Coal continues to be an important foundation for the economic growth of our state and the nation’s primary source of energy. Arch Coal’s investment in the Mountain State not only strengthens our coal industry, it helps create good paying jobs for hardworking West Virginians.”
Arch now operates six metallurgical and PCI-grade mines in Appalachia, including four in West Virginia. Arch also has significant undeveloped metallurgical coal reserves in the region that can support additional mine development in the years ahead.
St. Louis-based Arch Coal is one of the world’s top coal producers for the global steel and power generation industries, serving customers on five continents.