Coal Age

JAN-FEB 2017

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January-February 2017 www.coalage.com 9 news continued tions to prevent discharges of polluted wastewater from their mines in Appalachia. The estimated cost of these measures is $5 million. The settlement also requires the establishment of a $4.5 mil- lion letter of credit and a standby trust that will guarantee suffi- cient funding for, and a mechanism to accomplish, compliance with the Clean Water Act and the work the companies have agreed to perform under the settlement, should the companies fail to do so. The $900,000 civil penalty will be divided among the federal government and the four state co-plaintiffs, Alabama, Kentucky, Tennessee and Virginia. The settlement resolves alleged violations of state-issued Clean Water Act National Pollutant Discharge Elimination Sys- tem (NPDES) permits by illegally discharging various pollutants at the companies' mining and processing operations in Alabama, Kentucky, Tennessee, Virginia, and West Virginia and violations of the companies' legal responsibilities to sample the quality of their discharges to rivers and streams. The estimated annual pollutant reductions through implementation of the settlement is approxi- mately 5 million pounds. Under the settlement, Southern Coal Corp. and its affiliated mining companies must implement a company-wide, EPA-ap- proved environmental management system; maintain a central- ized data management system to track audit results, violations, water sampling data and compliance efforts; construct a public website for posting documents such as NPDES permits, discharge monitoring reports, water sampling data, effluent violation in- formation, notices of violations and compliance orders; conduct regular internal and independent third-party environmental au- dits and outlet inspections and undertaking necessary alterations or maintenance measures; and provide training for all employees whose responsibilities include environmental compliance and contractors hired to perform duties required by the consent decree. The government complaint filed concurrently with the set- tlement alleged that over the last five years, Southern Coal Corp. mining and processing operations have violated discharge limits for pollutants including iron, total suspended solids, aluminum, pH and manganese in their state-issued permits. The complaint also alleged that Southern Coal Corp. failed to submit complete and timely discharge monitoring reports, made unauthorized discharges and failed to respond to EPA requests for information. EPA discovered the violations through investigations and inspec- tions of several Southern Coal Corp. mining operations, reviewing various information provided by the companies and coordinating with the affected state governments. Texas Mineral Resources Signs Extension With Jeddo Coal Texas Mineral Resources Corp. (TMRC), an exploration company targeting the heavy rare earths and a variety of other high-val- ue elements and industrial minerals, signed an extension to the memorandum of understanding (MOU) executed in July with Pagnotti Enterprises, parent of Jeddo Coal Co., to evaluate the potential to recover and produce scandium and other rare earth byproducts from sedimentary rocks associated with the coal de- posits. Jeddo Coal Co. and its affiliates have been in the anthracite mining business for more than 80 years and Jeddo remains a ma- jor producer of anthracite coal with active mining and prepara- tion operations at the Jeddo Basin near Hazelton, Pennsylvania. In 2015, researchers with the National Energy Technology Laboratory of the United States Department of Energy (DOE) collected 135 samples from Jeddo Coal Co. properties, principally from drill core. The average technology metals content of these samples was 407 ppm total rare earth and 102 ppm scandium. Other work being carried out at Penn State University indicated these metals could be recovered by leaching the whole rock with ammonium sulfate. Assuming the applicability of these leaching techniques, and the favorable prices for scandium, TMRC execut- ed an MOU with Pagnotti Enterprises Inc. to jointly develop these technology metals associated with the coal beds. In September, the Office of Fossil Energy of the U.S. Department of Energy is- sued a $23.75 million Financial Assistance Funding Opportuni- ty Announcement titled, "Production of Salable Rare Earth Ele- ments from Domestic U.S. Coal and Coal Byproducts." TMRC, its processing partners Inventure Renewables/K Technologies and Penn State University submitted an application for this grant. Preliminary internal analysis done by TMRC, assuming a processing rate at a modest 250 tons per day of sand and silt- stones associated with the coal containing an estimated 100 ppm (parts per million) scandium content, would result in an opera- tion with an estimated capex of approximately $24 million, in- clusive of a 25% contingency. Potential estimated production of scandium oxide would be approximately 13,000 kg annually. At a 250-metric-tons-per-day (mtpd) production rate and using a current scandium market price of $2,000/kg such an operation would potentially result in an annual pre-tax cash flow of approx- imately $17 million, after royalty payments to the coal company. This analysis assumes that only the scandium recovered would be sold, attributing no value to other elements and minerals that could be recovered. "We believe joining forces with a well-established Pennsylva- nia coal company such as Jeddo in the recovery of scandium and other valuable rare earth minerals is a perfect complement to our Round Top heavy rare earth project in Texas," said Chairman An- thony Marchese. "The potential benefits of such a project will be felt in the surrounding coal community in Pennsylvania as well as by TMRC shareholders. Along with the Department of Energy, we strongly believe there is enormous potential to recover rare earth minerals from coal deposits in the northeastern United States." Pruitt Confirmed as New EPA Admin; Gov. Perry Awaits Vote for DOE Secretary Nomination President Donald J. Trump announced his nominations of Texas Gov. Rick Perry as secretary of the U.S. Department of Energy and Okla- homa Attorney General Scott Pruitt as the administrator of the En- vironmental Protection Agency. Pruitt's nomination was confirmed on February 17 and Perry was still awaiting a final vote by the senate. In announcing his intention to appoint Pruitt as EPA admin- istrator, Trump said, the EPA has had an "out of control anti-en- ergy agenda" and he believes Pruitt will instead "restore the EPA's essential mission of keeping our air and our water clean and safe." Pruitt said, "The American people are tired of seeing billions of dollars drained from our economy due to unnecessary EPA regulations, and I intend to run this agency in a way that fosters both responsible protection of the environment and freedom for American businesses."

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