The U.S. Bureau of Land Management (BLM) said in a notice to be published in the Jan. 17 Federal Register that it plans to prepare an Environmental Impact Statement (EIS) on the key coal reserve for a long-stalled longwall mine project of Kentucky-based Rhino Resource Partners LP (NYSE: RNO).
The planned EIS will analyze the Book Cliffs lease by application (LBA) for approximately 14,160 acres of federal coal reserves in Garfield County, Colo. The Book Cliffs LBA Tract includes about 78 million tons of in-place federal coal.
Rhino subsidiary CAM-Colorado LLC filed the LBA in 2006, with a draft EIS then issued by BLM on the application in 2009. But BLM has now decided, based on public comments, that a further EIS is needed.
The proposed Red Cliff longwall mine project area is located approximately 11 miles north of the towns of Mack and Loma in Colorado, near CAM-Colorado’s existing and much smaller McClane Canyon deep mine. The Red Cliff coal could be sold to power plants in the eastern and western portions of the country, outside of the traditional and very limited truck-delivered market for McClane Canyon. The washed coal for this planned mine is high-quality, low-sulfur coal with a heating value of 11,000 to 11,500 Btu/lb.
For the Red Cliff mine, CAM-Colorado is proposing to construct new mine entries and associated facilities, including a waste rock disposal area, railroad loop, unit train loadout, and a conveyor system to move the coal and waste rock. The railroad would be located on BLM and private lands, with the railroad connecting to the existing Union Pacific Railroad line near Mack.
The production from the Red Cliff mine would be up to 8 million tons per year of clean coal, with an estimated mine life of 30 years.
Said the Rhino website about McClane Canyon: “The McClane Canyon mine is located near Loma, Colorado and is on property leased from Bureau of Land Management. As of December 31, 2012, the McClane Canyon complex included an estimated 6.4 million tons of proven and probable coal reserves and an estimated 26.1 million tons of non-reserve coal deposits. We temporarily idled production at this mine at the end of 2010 and the mine remained idle at the end of 2012. We have received a conditional permit to build a rail loadout at this location and plan to restart production when market conditions are favorable.”
The U.S. Mine Safety and Health Administration database currently counts McClane Canyon as “temporarily idled,” with no production since 2010. The mine shutdown was forced by the retirement in 2010 of the nearby Cameo power plant of Public Service Co. of Colorado, the mine’s major customer.
The Rhino website added about Red Cliff: “In addition to the McClane Canyon mine, we currently control three nearby federal leases consisting of approximately 7,600 acres, two of which have the potential to support a future underground coal mining operation with procurement of an adjacent federal leasehold. We began the permitting process and leasehold procurement in 2005 and expect the process to last approximately one to three more years. We are currently in an exploration process to define the volume, quality and mineability of the coal reserves.”