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Twentymile Mine granted permit change to enable pursuit of new coal customers

Twentymile in pursuit of coal customer

Twentymile Coal Company gained approval from Routt County on Nov. 22 to amend its coal hauling permit attached to the future Sage Creek Mine (pictured) in order to help it pursue new customers for its existing mine.
file photo

Coal mine’s production off steeply in 2016

Reports on file with the Colorado Division of Reclamation, Mining and Safety show that coal production at Peabody Energy’s Twentymile Coal Company is down steeply this year over 2015, but the decline has less to do with Peabody’s bankruptcy and the global decline in demand for coal than it might seem.

Peabody produced 4.12 million tons of coal in 2015 (down from 7.75 million tons in 2012). Through September 2016, the mine had produced just 1.95 million tons and just 33,347 tons in the months September when 286 miners were at work. Production at Twentymile peaked at 9.4 million tons in 2005.

Steamboat Today has learned that the drop in production this year can be attributed to the difficult process of moving Twentymile’s longwall mining equipment from the Wadge seam 150-feet deeper underground into the Wolf Creek seam.

The move of the longwall, which is capable of shearing 25,000 tons of coal daily from the Wadge seam, began in June and continued into September, disrupting production at the mine.

— Intent on pursuing more customers for its low sulfur coal in a challenging market, Twentymile Coal Company officials sought and won the unanimous approval Nov. 22 from the Routt County Board of Commissioners to amend a coal-hauling permit that will allow them to truck more coal from the mine southwest of Steamboat Springs to U.S. Highway 40 via Routt County Road and onto unspecified purchasers to the north and west of Routt County.

“I think the rationale there is our management has been in conversation with various parties trying to get additional coal contracts,” Twentymile’s environmental manager Jerry Nettleton said Tuesday. “If we can pick those up, coal would be hauled by truck to U.S. 40 and then to the destination.”

The Board of Commissioners unanimously approved the plan.

Coal mine’s production off steeply in 2016

Reports on file with the Colorado Division of Reclamation, Mining and Safety show that coal production at Peabody Energy’s Twentymile Coal Company is down steeply this year over 2015, but the decline has less to do with Peabody’s bankruptcy and the global decline in demand for coal than it might seem.

Peabody produced 4.12 million tons of coal in 2015 (down from 7.75 million tons in 2012). Through September 2016, the mine had produced just 1.95 million tons and just 33,347 tons in the months September when 286 miners were at work. Production at Twentymile peaked at 9.4 million tons in 2005.

Steamboat Today has learned that the drop in production this year can be attributed to the difficult process of moving Twentymile’s longwall mining equipment from the Wadge seam 150-feet deeper underground into the Wolf Creek seam.

The move of the longwall, which is capable of shearing 25,000 tons of coal daily from the Wadge seam, began in June and continued into September, disrupting production at the mine.

“It’s integral to our county to keep you guys in business and shipping coal,” Commissioner Doug Monger said. “This is a good idea.”

Twentymile, owned by Peabody Energy, and the most productive coal mine in Colorado has seen production decline in recent years as global demand has declined. In 2012, the mine produced 7.75 million tons of coal, a number that has slipped to 4.12 million tons in 2015, according to the Colorado Division of Reclamation, Mining and Safety.

Twentymile’s request of the Board of Commissioners this week was to amend a coal-hauling permit attached to the future Sage Creek Mine, not far from Twentymile.

Twentymile, nearing the end of the productivity of its ongoing mining in the Wadge coal seam, launched plans in 2010 to develop Sage Creek, where that coal seam was closer to the surface. In order to secure a permit to develop the mine, the company engaged in extensive improvements to county roads to make them capable of enduring truck traffic carrying 70 tons of coal in each truck.

“We spent somewhere in the neighborhood of $20 million on road improvements,” Nettleton said.

As the company watched the demand for coal dip, the Sage Creek Mine was put on ice, and instead, the company decided to mine in an even deeper seam of coal, the Wolf Creek seam beneath the existing mining in Twentymile.

Now, in order to reach potential new customers, it needs to amend its permit to use county roads to haul a maximum of 6 million tons of coal per year on Routt County Road 27 and 3 million tons traveling north to U.S. 40.

Nettleton wrote in a permit application to the county that his company is in contact with the Colorado Department of Transportation regarding the coal-hauling plan.

To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1


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