Coal Age

FEB 2012

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u.s. longwall census continued average of 167 miners worked with care over 300,000 hours producing more than 2.5 million raw tons of coal without a sin- gle reported lost time accident. This is only the second time in the mine's 29- year history that workers completed 365 days with no lost time injuries, the last during the years 2002-2003. At a celebration held during October 24, 2011, CMA President Stuart Sanderson read a proclamation commending the company, its management and employees for the successful creation of a culture of mine safety. And the company sweetened the pot with bonuses including $365 for working an entire year injury free. "Our safety record begins with the support of top management, including the board of directors, and works its way through our whole team of miners," said Al Hillard, mine manager, Deserado mine. "We have great people that not only look out for themselves, but for the other guy as well." Peabody Energy operates only one U.S. longwall, the Twentymile mine, but it's one of the best. The company recently announced the mine received a 40-million- ton long-term coal supply agreement for a planned extension. The Twentymile exten- sion is being developed to supply coal to power plants, industrial and export cus- tomers, including a 16-year agreement with the nearby Hayden Generating Station. The project involves developing the new Twentymile Sage Creek portal in the existing Wadge coal seam and moving the longwall. The new portal will access an additional 105 million ton northern reserve block of high-Btu, low-sulfur coal. Permits are in place for develop- ment of the longwall panel, with devel- opment work expected to begin in May 2012. Longwall production is anticipated in the second half of 2015. The capital investment for the extension is expected to total approximately $200 million. CONSOL continues permitting and development of its planned Bailey mine expansion (BMX) longwall mine in Western Pennsylvania. This mine would add a fifth longwall to the Bailey/Enlow Fork complex, which is currently the largest underground complex in the United States. A single development sec- tion is presently driving main entries and full production is expected to be 5 mil- lion tons per year beginning in late 2013. February 2012 Table 1—Longwall Installations, by Parent Company (2011-2012). Company Ala. Colo. Ill. Mont. N.M. Ohio Pa. Alliance Resource Partners Alpha Natural Resources AmCoal American Energy Arch Coal BHP Billiton Blue Mountain Energy Bowie Resources Ltd. Cliffs Natural Resources 1 CONSOL Energy Drummond Energy West FMC Corp. 1 1 1 Foresight Energy Ohio Valley Coal Oxbow Mining Pacific Minerals Patriot Coal Peabody Energy Signal Peak Energy Solvay Chemicals UtahAmerican Energy Inc. Walter Energy Total 4 65 41 1 27 5 Signal Peak Energy had a rough year. After starting its second longwall panel at the Bull Mountain mine in Montana, the mine experienced several roof falls that interrupted production. The mine was then idled in December due to high car- bon monoxide (CO) concentrations and had to declare force majeure. The com- pany lifted the force majeure in January and is hoping for a better 2012. When it reaches full capacity, the mine, one of America's newest longwall installations, is expected to produce as much as 12.5 million tons per year. Cliffs Natural Resources reported high production volumes from America's only plow longwall at the Pinnacle mine in West Virginia. Cliffs brought the Pinnacle mine back online during October. It had suspended operations in May when the mine noticed elevated CO levels. The company's Oak Grove mine was com- pleting repairs to surface structure that was damaged by the deadly tornadoes that struck Alabama early last year. Arch Coal's Canyon Fuel subsidiary announced last fall it would scale back 1 13 2 1 1 1 2 1 1 1 1 1 1 4 1 1 6 1 1 3 2 1 3 1 Utah Va. W.Va. Wyo. Total 2 1 2 4 2 1 5 1 1 1 2 11 1 1 1 2 1 1 1 2 1 1 1 1 4 3 48 production at the Dugout Canyon mine near Wellington, Utah, in response to continuing weakness in coal demand in the region. The company will suspend longwall operations at the end of the cur- rent panel, currently planned for the first half of 2012. Coal sales from Dugout Canyon totaled 2.3 million tons in 2010. Arch Coal also brought the Mountain Laurel longwall back online. It had been idled due to geologic challenges. During 2011, Arch Coal acquired ICG and its plans to develop the Tygart River longwall mine in West Virginia. It recently said it was accelerating Tygart Valley's longwall start- up by six months to mid-2013. Looking toward the future, if Foresight Energy's plans come to fruition, the industry could see at least two more longwalls come online. At least one addi- tional longwall could be installed at the company's Sugar Camp mine. The com- pany's Patton Mining division is also opening the Hilsboro mine which will operate at least one longwall. The num- ber of U.S. longwalls could once again climb comfortably above 50 by 2013. www.coalage.com 23

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