Patriot Coal (OTC Pink: PATCA), up to now a producer in the Illinois Basin only in western Kentucky, is looking at mining in Clay County, Ind., at the planned Mustang strip mine.
Indiana Department of Natural Resources records show that in 2012, a permit for the 1,608-acre Mustang strip mine was issued to White Stallion Coal LLC. U.S. Mine Safety and Health Administration data shows that this mine was registered in 2012, that it hasn’t started yet, and that it is jointly controlled by Patriot Coal and American Patriot Holdings LLC. One source said this property has a very high-sulfur coal that might be difficult to market, even to scrubber-equipped power plants.
U.S. Office of Surface Mining data shows that the President of White Stallion is Steven Chancellor, and the Vice President is Daniel Hermann, both of whom are former executives of Illinois Basin coal producer Black Beauty Coal. OSM records also show that Chancellor and Hermann each own 41% of American Patriot Holdings, with no party or parties shown for the other 18% of ownership.
Patriot, when it was spun off from Peabody Energy (NYSE: BTU) late last decade, only got producing mines in the Illinois Basin in western Kentucky. But Peabody did include in that spinoff undeveloped reserves in other parts of the Illinois Basin. Notable is that Peabody several years ago bought Black Beauty Coal in a series of transactions.
Said the Patriot Coal website: “In the Illinois Basin, we have two complexes located in Union and Henderson counties in western Kentucky. We sold 3.8 million tons of coal in the Illinois Basin in 2013 and control 596 million tons of proven and probable coal reserves in the Illinois Basin, of which 106 million tons are assigned to current operations.”