Kentucky-based Ramacao LLC has laid out plants to open a new coal mine northwest of Sheridan, Wyoming, in 2016.
The timing of Ramaco’s announcement could be seen as perilous. Wyoming coal production fell from 443 million t in 2010 to 388 million t in 2013. Meanwhile, three of the four publicly traded coal companies operating in the Powder River Basin (PRB) have already recorded Q1 2014 losses. Further, Cloud Peak Energy recently announced plans to cut production at its Cordero Rojo mine in 2015 by 10 million tpa if market conditions continue on their downward trend.
Executives at Ramaco, however, believe they have something that will buck the trend. The proposed Brooks mine lies on 14,500 acres of private and state-owned land between Sheridan and Ranchester, meaning that the company will not be required to make federal bonus payments like its counterparts mining government land in the basin.
The property is further aided by a BNSF rail line that intersects the land, thereby providing an invaluable transit link.
The mine boasts 100 million t of recoverable coal with a higher Btu value than much of the coal found in the PRB, according to Ramaco’s CEO, Randall Atkins. The mine will produce coal of 9100 Btu, compared to an average PRB coal of 8800 Btu.
New mines a rarity
New coal mines are something of a rarity in Wyoming. A mine planned in Uinta County is on hold due to sage grouse concerns, while Cloud Peak is pursuing plans to open its Youngs Creek mine north of Sheridan, said Travis Deti, associate director of the Wyoming Mining Association, an industry group.
"Coal companies want to keep doing business," Deti said. "Regretfully, in this environment there is just a lot of regulatory uncertainty."
Small is beautiful
In comparison to some of the other mines in the region, however, Ramaco’s plans are admittedly somewhat modest. While the Brooks mine would produce a maximum of 8 million tpa, Arch Coal’s Black Thunder mine and Peabody Energy’s North Antelope Rochelle complex both produce over 100 million tpa.
"Sometimes small is beautiful," Atkins said. "We’ll do 8 million tons. We can find a market for this amount of coal. If you’re trying to start a 50-million-ton-a-year mine, that will be harder to place."
Atkins declined to name the company's financial investment in the mine but noted it would be in the "hundreds of millions." The facility is projected to employ around 200 people. The company has not yet decided whether it will bring in other partners to operate the Brooks mine or operate it independently.
Ramaco will complete a year's worth of air and water quality testing at its Brooks mine next month. The company plans to submit its permit application to the Wyoming Department of Environmental Quality by August. The company's plans call on using a high-wall mining technique. Unlike the surface mines in the PRB, which remove the topsoil to access the coal, high-wall mining sees a trench dug into the ground. From there, the operator then drills sideways into the earth in order to remove the coal. The method requires less labour and is consequently cheaper than other forms of mining, Atkins said.
Edited from various sources by Sam Dodson
Read the article online at: https://www.worldcoal.com/coal/29052014/plans_to_open_new_coal_mine_in_wyoming_913/