The North Dakota Public Service Commission on March 12 approved an initial mining permit for the Coyote Creek Mining Co. LLC affiliate of North American Coal that will allow early development work on a major new lignite mine.
The total area covered by this permit is 84.24 acres. Land disturbances are planned to construct the mine’s shop/office facility, a pad to erect a dragline, a sedimentation pond, and other support features including soil stockpiles, diversions and access road. The facilities will support the actual mining activities proposed in another, still-pending permit application until the expected completion of mining in 2040.
The still-pending permit application, filed in November 2013 at the commission, covers 8,092 acres of mining area.
This is one of several new mines being developed by North American Coal. Coyote Creek Mining is developing a lignite mine in Mercer County, N.D., from which it expects to deliver approximately 2.5 million tons of coal annually beginning in May 2016, said North American Coal parent NACCO Industries (NYSE: NC). In May 2016, the Coyote Creek mine is expected to begin coal deliveries to the Coyote Station owned by Otter Tail Power, Northern Municipal Power Agency, Montana-Dakota Utilities and Northwestern Corp.
Westmoreland Coal‘s (NasdaqGM: WLB) website said about its Beulah mine, which currently supplies this power plant: “Coal from this operation supplies the fuel requirements for the adjacent 427 megawatt Coyote Generating Station. Coyote is a low-cost, base-load generation facility that utilizes emission control technologies and purchases all of its lignite from the Beulah Mine. Dakota Westmoreland also owns and controls a four-mile rail spur that connects the mine and plant to the Burlington Northern Santa Fe Railroad’s Stanton line, which it uses to supply the two-unit 75 megawatt Heskett Station, located 74 miles away.”
Said Westmoreland’s Feb. 28 annual Form 10-K report: “The Beulah Mine supplies approximately 2.1 million tons per year to the adjacent Coyote Electric Generating Plant via conveyor belt under an agreement that expires in May 2016. It also supplies approximately 0.4 million tons per year via rail to the Heskett Power Station under an agreement that expires in 2016. Prices under these agreements are based upon certain actual mine costs and certain inflation indices for such items as diesel fuel.”