Coal Age

MAY 2019

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6 May 2019 u.s. news CONSOL Energy Starts Development of Itmann Mine CONSOL Energy Inc. has commenced the development of a new low-vol met- allurgical coal mining operation in Wy- oming County, West Virginia, with an anticipated completion date of 2021. The Itmann mine, the company's first major growth initiative, will produce 600,000 tons at its full run rate. "Since becoming an indepen- dent publicly traded company, we have meaningfully deleveraged our balance sheet and improved our li- quidity through strong operational performance and completion of our first-quarter 2019 refinancing," CEO Jimmy Brock said. "We also continue to return capital to our shareholders through our expanded repurchase program announced. The Itmann mine begins the next phase of our evolution, as we are now focusing on strategic and controlled growth as an additional avenue to increase our per-share value." Brock added that the new mine will align with the company's current asset base. "It will further diversify our already robust portfolio by add- ing a new metallurgical coal product stream to the mix," he said. When combined with metallur- gical product from the Pennsylvania Mining Complex, it will allow the com- pany to consistently produce 2.5 mil- lion-plus tons of metallurgical quality coal annually, once the Itmann mine and preparation plant are constructed and fully functioning in 2021. "We are also excited about the tim- ing of the Itmann project, as coking coal prices remain attractive," Brock said. "While other new metallurgical coal supply is expected to emerge in the U.S. in the coming years, we believe that most of this new supply will be focused on high-vol metallurgical products." He added, "Our initial market out- reach has indicated a strong interest level among domestic and internation- al customers in the Itmann product." The Itmann project has an antici- pated mine life of 25-plus years. Con- struction of the mine is expected to begin in late 2019 or early 2020, pend- ing successful permitting and project development efforts, which are ongo- ing and progressing as planned. Total capital expenditures will be $65 million-$80 million over the next two years to develop the mine and preparation plant. Lawsuit Against Justice Coal Companies Seeks Nearly $5M A civil lawsuit has been filed against 23 coal companies owned by West Vir- ginia Gov. Jim Justice and operating in Virginia, West Virginia, Tennessee, Alabama and Kentucky, which seeks more than $4.7 million in unpaid penalties for violations of the Federal Mine Safety and Health Act. The civil action, filed by United States Attorney Thomas Cullen in the Western District of Virginia on behalf of the Mine Safety and Health Admin- istration (MSHA), claimed that the companies failed to pay penalties or notify MSHA it contested the penalties on at least 2,297 citations that were is- sued to the mine operators between May 3, 2014, and May 3, 2019. Cullen said it was "unacceptable" and they "will hold them accountable." "MSHA plays a critical role in pro- tecting our coal miners and ensuring that mine owners and operators fulfill their legal obligations to provide safe and healthy working conditions," U.S. Attorney Cullen said. "As alleged in the complaint, the defendants racked up more than 2,000 safety violations over a five-year period and have, to date, refused to comply with their legal obligations to pay the resulting financial penalties." Assistant Secretary of Labor for MSHA David Zatezalo said mine op- erators should be held responsible for what they owe. "In the Mine Act, Congress was extremely clear on en- forcement matters: federal inspectors issue citations for safety and health violations, which carry a monetary fine," he said. "Failure to pay penal- ties is unfair to miners who deserve safe workplaces, and to mine opera- tors who play by the rules." According to Cullen, when the de- fendants failed to pay the civil penal- ties for 100 days, despite two demand letters, MSHA referred the civil penal- ties to the Department of Treasury for collection. Another written demand was issued from the Department of Treasury, but the companies still did not pay. On September 5, 2018, the United States Attorney's Office for the Western District of Virginia made a written demand on the defendants With a 25-year life, the Itmann mine is expected to produce 2.5 million tpy of met coal.

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