Digging up the Past: A Kentucky Company’s Plan for a New Coal Mine in Sheridan

(Casper Star Tribune, February 7) – The rolling hills north of Interstate 90 between Sheridan and Ranchester still bear marks of their mining past.

An old five-bay warehouse and loadout station belonging to the Big Horn coal mine still straddle the Burlington Northern Santa Fe railroad track. The land is pockmarked by “chimney failures,” divots where the earth collapsed on the tunnels of the Model, Monarch and Acme Mines.

Mining reached its peak in the area between 1914 and 1940, but 1.1 billion tons of coal remain, according to Randall Atkins.

Atkins is CEO of Ramaco, a Kentucky company hoping to revive Sheridan County’s mining industry. Their goal: use new techniques to produce up to 8 million tons of coal annually from the newly dubbed Brook Mine. Plans call for beginning operations in 2017.

It would be the first coal mine in Sheridan County since the late 1980s. Local officials welcome the potential economic windfall of a new industry but are tempering their optimism until the process moves further along.

County Commissioner Steve Maier moved to Sheridan County around the time the Big Horn mine fully shut down.

“We lost half our assessed valuation,” Maier said. “That did have an impact on agencies that benefit from property tax. People were unemployed … we’ve been rebuilding since then.”

Today, hospitals and Sheridan College are among the biggest economic drivers in the county, Maier said. Manufacturing continues growing slowly but steadily. Many miners travel north of the border into Montana to work in the Decker and Spring Creek mines. He said a new mine in Sheridan County would only serve to bolster the economy.

A Ramaco-backed study estimates Brook Mine would create as many as 250 direct jobs and $270 million in direct wages over the life of the mine.

The company’s permit is under technical review by the Wyoming Department of Environmental Quality – Land Quality Division. Atkins said he hopes to have the permit issued by this fall. About nine months of construction will follow, bringing with it around 80 jobs.

Maier has seen other proposed mines in the area become bogged down, though, so he said the county is taking a wait-and-see approach.

“We have a little jaundiced eye in the sense that we have been through this before,” Maier said.

The uncertainty over when, or whether, Cloud Peak Energy’s Youngs Creek Mine will open has been a roller coaster ride, he explained. Cloud Peak purchased the mine, which contains 40 million tons, in 2012 for $300 million.

However, Cloud Peak is already a major force in the Powder River Basin, whereas the 3-year-old Ramaco is a new competitor.

“There is room in this business for a small player,” said Travis Deti, assistant director of the Wyoming Mining Association. “We are pleased to see them progressing, and we are optimistic.”

The southern Powder River Basin has been a relatively bright spot for a struggling industry, but even basin production fell 14 million tons – 4 percent – from 2012 to 2013. Employment declined by almost 300 jobs, a drop of 3 percent.

“We realize this is a hard time for the industry. There are a lot of things going against it in the regulatory environment and the economy in general,” Deti said.

Atkins is nonetheless confident the Brook Mine offers the right confluence of natural and technological advantages to thrive even in the down market.

The mine’s coal reserves pack more energy, and its sulfur content is among the lowest of its counterparts in the basin. The mine’s permit area is bisected by the Burlington Northern Santa Fe railroad, which means the company won’t have to transport coal far to ship it west.

Brook Mine is also rare because Ramaco owns the coal and the land is privately held, which means it won’t have to pay federal royalties.

“We’re contrarians. We’ve not acquired any of our assets with any idea that we are buying them for a huge price rebound,” Atkins said. “We felt comfortable that (the coal) could be mined at a low enough cost structure that it would be competitive even in today’s market.”

Ramaco also plans to use something called highwall mining to keep costs down.

A highway mining car, a 12-foot auger that looks like a giant rolling pin with teeth, chews into the coal seam. As the drill moves further into the hole, conveyor belt pieces are added to carry the coal back out.

The machine makes its way down the trench, leaving a web of supports to hold up the ground above. The process is cheaper because it takes just a dozen miners to operate the equipment, and the company doesn’t have to remove all the ground on top of the coal. However, only about 45 percent of the coal is recovered, said Jeff Barron, an engineer with Sheridan-based WWC Engineering.

“These are shallow coal seams, unlike the basin, so this method works,” Barron said. “It’s a new mine, a new seam, a new technology with fewer impacts.”

The trenches will be in the hills north of the interstate, and other than trucks topping the ridges, Barron doubted whether anyone driving Interstate 90 would even realize anything is happening. It is also easier to reclaim the land when the mine ends operations, Barron explained.

That’s a good thing in a county many people choose to live in for the stunning vistas.

The impacts of a major employer like the proposed Brook Mine go beyond environmental considerations into arenas like housing, health care and schools.

“We have to make sure the roads are good, the sewer and water lines are adequate, because that’s what invites new companies to come in,” Sheridan Mayor John Heath said.

Housing is a big concern, but the welcome mat is out for developers, he added. Many of the area schools are relatively new and still have plenty of capacity. Local hospitals and clinics have beds available, Heath said. Meanwhile, more workers mean more customers for retailers and restaurants.

The challenge is to balance that growth with the lifestyle residents expect, said Maier, the country commissioner.

“As long as developers work within our plans,” he said.  “We aren’t going to sacrifice for a boom.”

Original article here.