The U.S. Environmental Protection Agency says it’s going to hold up 79 applications for surface coal mine permits in four states (West Virginia, Kentucky, Ohio and Tennessee) for further “enhanced” review. All 79 permits were on a preliminary list released September 11 (See additional coverage in Appalachian Profile, p. 32). The EPA says it will work with the U.S. Army Corps of Engineers, which issues the permits, and applicants to reduce water quality damage. The action is the latest attempt by the EPA to rein in mountaintop removal mining in Appalachia. The highly efficient, but evasive mining practice has been targeted by the Obama administration’s EPA.

“The EPA’s announcement to halt 79 pending coal mining permits continues the moratorium on Eastern coal mining that jeopardizes the livelihoods of tens of thousands of American workers and their communities. By deciding to hold up for still further review, the agency damages a weak economy struggling to recover in the worst recession in post-war history,” said Hal Quinn, president and CEO, National Mining Association (NMA). “The EPA has adopted its own process and criteria for reviewing coal mine permits that is the responsibility of the Army Corp of Engineers. No one outside of the EPA—not even the Corps—knows what criteria the EPA has used to now find these 79 permits insufficient. Permit applicants do not know what conditions outside the bounds of the existing regulations they must meet to obtain a permit. In effect, the EPA is imposing new regulations that have not been proposed or publicly reviewed as required by law. This action reinforces our earlier call for a transparent process that gives coal operators confidence in the regulatory process.

“We’re at a loss to understand how the EPA’s moratorium on coal mining aligns with the public interest and the administration’s attempt to restore economic growth and create high wage jobs,” Quinn said.

In March, the EPA halted several mining permit applications in order to review the water-resources impacts of such permits. In June, the Obama administration announced an unprecedented interagency action plan to reduce environmental impacts of mountaintop coal mining. The EPA has approved one of six major mountaintop mining permits issued by the corps to CONSOL Energy’s Peg Fork surface mine near Chattaroy in Mingo County, W.Va.

Arch Coal announced that it has completed the acquisition of Rio Tinto’s Jacobs Ranch mine for a purchase price of approximately $764 million, which is about $3 million more than the initial announcement and includes an estimate for working capital adjustments. In 2008, Jacobs Ranch produced 42.1 million tons of high-quality sub-bituminous coal.

“This transaction further expands Arch’s size, scale and strategic position in the Powder River Basin,” said Steven F. Leer, chairman and CEO, Arch Coal. “Arch plans to integrate Jacobs Ranch, which is the third largest coal mine in the United States based on 2008 production, into the company’s existing Black Thunder mine, creating what we believe will be the largest single coal-mining complex in the world.”

The acquisition includes 381 million tons of low-cost, low-sulfur coal reserves that are contiguous to Arch’s Black Thunder mine. Other assets acquired in the transaction consist of a high-speed rail loadout, an overland conveyor and near-pit crushing system, a 120-cu-yd dragline, eight electric shovels, more than 40 haul trucks and a dedicated and experienced workforce. Additionally, Jacobs Ranch has 35 million tons of production committed and priced in 2010—and 21 million tons of production committed and priced in 2011—under existing sales contracts.

Once integrated, the enhanced Black Thunder mine will control six draglines, 22 shovels, more than 130 haul trucks, three rail loadouts and 20 train landing spots. The combined mine also will have assigned coal reserves of 1.6 billion tons and productive capacity of more than 140 million tons per year should market conditions warrant.

Arch estimates synergies from the transaction of between $45 million and $55 million annually, beginning in 2010. Roughly half of the synergies represent operational cost savings, including mining sequence changes to capitalize on the common property line, shorter truck haulage distances, optimization of the combined mine’s three rail loadouts, equipment rationalization, elimination of redundant facilities as well as purchasing and warehousing efficiencies, among others. The remaining synergies relate to administrative cost savings as well as enhanced coal-blending opportunities. Administrative cost savings include the elimination of duplicative job positions and overhead fees.

The secretary was accompanied on the underground visit by Rep. Alan Mollohan, D-W.Va., Cecil Roberts, president, United Mine Workers of America, and Blair McGill, general manager, Federal No. 2 mine.

“It was evident that management and labor can work together to ensure that workers are safe, earn a good wage, and can be proud that their work is contributing to meeting our nation’s diverse energy needs,” said Solis.

The Deer Run mine is located near Hillsboro in Montgomery and Bond counties, Ill., and the coal reserves are leased to the mining company Hillsboro Energy, an affiliate of the Cline Group. Construction of the new longwall mine has already commenced. Initial production is expected in 2010, and longwall production is expected to commence in 2011.

“We are excited about the opportunity to acquire additional coal reserves in the Illinois Basin as the Cline team develop this new mine,” said Nick Carter, president and COO, NRP. “With this acquisition, NRP continues its diversification in the Illinois Basin. When this mine is completed and in production, our Illinois Basin production is expected to be approximately 20 million tons per year, up from less than 3 million tons in 2006. This is the third acquisition in the Illinois Basin resulting from our relationship with the Cline Group. There are several acquisitions anticipated over the next few years that will continue to build our production base in the Illinois Basin.”

                Production from the mine is forecasted to be approximately 8 to 10 million tons per year, from which NRP ultimately anticipates receiving in excess of $40 million per year of income. Based upon these production levels, the life of the mine will exceed 20 years.

Voyageur Press (www.voyageurpress.com)

One project, funded by Virginia Tech’s Institute for Critical Technology and Applied Science and the Powell River Project, is evaluating measurements of hydrological and ecological functions in streams undergoing restoration activities following coal-mining impacts. Efforts to restore stream structure and function following coal mining are relatively recent (mostly within the past five years). Many questions have been raised as to effectiveness of these practices, but little research has been conducted in effort to answer them.

A second project, funded by the Virginia Department of Environmental Quality, the Virginia Department of Mines, Minerals and Energy, and Virginia Tech’s Powell River Project, is investigating associations between total dissolved solids (TDS) and aquatic benthic macroinvertebrates (insects and other organisms that live on stream bottoms). High levels of TDS are often found in stream water originating from areas exposed to coal mining, and benthic macroinvertebrates are a key indicator of stream health.

“These guidelines provide coal mining companies a set of consistent and reasonable protective measures they can use when their proposed operations could impact the Indiana bat and its critical habitat,” Salazar said. “This technical guidance was developed through extensive state and federal collaboration and will assist companies in complying with the requirements of the Endangered Species Act.”

A team representing three U.S. Fish and Wildlife Service regions and state coal mining regulatory programs, facilitated by the U.S. Office of Surface Mining Reclamation and Enforcement, developed the guidelines to provide habitat protection and avoidance measures for the Indiana bat. State participation on the team and peer review of the guidelines were coordinated by the Interstate Mining Compact Commission, a multi-state organization representing the natural resource interests of its member states. For more information, visit www.osmre.gov/guidance/docs/INBatPEPGuide-lines.pdf.