New coal mine planned for West Routt
Peabody Energy's construction of Sage Creek facility could begin in 2010
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Steamboat Springs — Peabody Energy and Twentymile Coal Co. could begin construction on the new underground Sage Creek Mine in West Routt County as soon as 2010, a company spokesman said last week.
The new mine is anticipated to replace coal production at the existing Twentymile Mine when the underground longwall mining operation runs out of coal sometime in 2013. Twentymile shipped 8 million tons of coal in 2008.
Twentymile Coal Company’s Environmental Manager, Jerry Nettleton, said his company is planning for a smooth transition to maintain consistent levels of production from one mine to the next.
“We would anticipate having all of the development work complete” on the new mine as the existing mine approaches the end of its reserves, Nettleton said.
Twentymile is back in the county planning process this spring, seeking its third permit in as many years to drill test holes leading up to construction of the new mine in an area about five miles southeast of Hayden, county planning director Chad Phillips said.
The new Sage Creek Mine would be one drainage over from Peabody’s Seneca Mine.
“The coal reserves are well-known,” Nettleton said. “The exploratory drilling is being done to delineate exactly where (the seam) is, the thickness and the quality. We’re also looking for faulting that could affect the way we would mine it.”
Twentymile Coal Co. employs 600 people in Northwest Colorado and has an annual payroll of $50 million, Nettleton said. Twentymile pays $26 million in federal, state and local taxes annually and purchases supplies and services valued at $80 million.
Darcy Trask, director of the Craig/Moffat County Economic Development Partnership, said coal mines such as Twentymile and the Trappers Mine in Moffat County provide jobs with salaries that sustain local families and enrich their communities.
“Mining jobs pay about $68,000 a year. That’s well above the self-sustainability wage for a family of four,” Trask said. “That allows individuals and families to be more invested in the community and do volunteer work. It’s important to preserving what is special about our communities in Northwest Colorado.”
The taxes paid by coal mining operations provide significant revenue to public schools, colleges and municipalities in the region, she said.
Mining and energy industries are viewed by some to be incompatible with the growth of the resort and lifestyle economies in Northwest Colorado, Trask said, but many coal mine employees were born and raised in the Yampa Valley and want to remain here.
Coal mine employees often serve as firefighters and emergency medical technicians in their communities, she added.
Economic consultant Scott Ford said the contributions of the coal industry to the Routt County economy, on a percentage basis, has become less significant as the area’s economy has diversified. Citing the 2009-10 Community Indicators Report, Ford said total employment in Routt County in 2007, including full- and part-time jobs, was about 22,000. Of that, 92 percent was in the private sector and 8 percent in government. Of the private sector jobs, the mining industry represented about 3.5 percent of the total compared to 7 percent in health care, 18 percent in construction, 12.5 percent in food services and accommodation and 11 percent in retail.
The high rate of pay in coal mining helps it account for a greater share of earnings from labor. Private sector wages in Routt County in 2006 were about $738 million.
On a percentage basis, the coal mining industry’s contributions are approximately equivalent to the health care industry, Ford said, at 8.4 and 8.5 percent, respectively.
“The average mining job is about $68,000 to $70,000 annually. Health care is $30,000,” Ford said. “This means that there are about twice the number of folks working in the health care sector as there are working in the mining sector.”
Moffat County Commissioner Audrey Danner suggested coal would continue as an important economic contributor in the region.
“Coal in Northwest Colorado is an abundant resource that needs to be developed very responsibly,” Danner said. “It’s a mainstay in Routt, Moffat and Rio Blanco counties, evidenced by its status as a top 10 taxpayer in all three.”
Scott Cowman, who will lead the drilling of 15 core holes this summer, told the Routt County Planning Commission on March 19 that the holes would be 6 to 7 inches wide and between 500 and 1,900 feet deep.
The permitting process for construction in 2010 already is under way, Nettleton said. The entrance to the new mine would be very similar to the existing facility at Twentymile, Nettleton said, in that it would enter the mine on a slope.
Construction would begin with an independent excavation contractor developing the entry, then developing panels of coal 1,000 feet wide and two to three miles long.
Tunnels would be driven on either side of a coal panel and across its far end, Nettleton said. The tunnels would accommodate the conveyor systems used to bring the coal from underground, as well as the necessary ventilation systems.
Peabody’s contracts for Routt County coal call for it to be delivered to power plants as far south as Mississippi and to Midwestern states such as Wisconsin – in addition to Colorado sales.
“A lot of our coal goes to Colorado Springs,” Nettleton said.
Twentymile built a coal-washing plant to remove impurities before coal is loaded onto railroad cars. The coal already is sought after by clients because it is relatively low in sulfur and produces less ash when it is burned.
Both qualities help customers meet local environmental compliance standards, and Routt County coal often is blended with coal from other sources to help bring the overall mix at a power plant within compliance, Nettleton said.
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