ArcelorMittal Acquires Mines in Central Appalachia
ArcelorMittal, the world’s largest steel company, has signed an agreement to acquire Mid Vol Coal Group which operates mines in Southern West Virginia and Southwestern Virginia. “This acquisition further increases our upstream self sufficiency in a primary raw material during a time when metallurgical coking cola demand on a global scale remains strong,” said Aditya Mittal, CEO, ArcelorMittal. Mid Vol produced 1.5 million tons of high-quality metallurgical coal last year. The company has more than 85 million tons of recoverable coal reserves in Central Appalachia. Plans are to double coal production levels at Mid Vol mines under permits already approved. In 2007, ArcelorMittal produced 116 million tons of steel, or about 10% of the world’s total production.
Majority of Americans Oppose Lieberman-Warner Proposal
During early June, as Democrats withdrew Lieberman-Warner America’s Climate Security Act, a new poll found that an overwhelming majority of Americans actually opposed the higher energy costs the bill would impose. The poll, conducted by the National Center for Public Policy Research, found 65% of Americans reject spending even a penny more for gasoline in an effort to reduce greenhouse gas emissions. The number rejecting raising gas prices to combat global warming has increased by 17 percentage points—or 35%—in just over two months. The National Center conducted a similar survey in late February. An additional 13% oppose spending more than 5% more for gasoline to reduce greenhouse gas emissions.
Lieberman-Warner would increase petroleum prices by 5.9% by 2015, according to Duke University. Other studies indicate the plan would push prices higher. The survey found 71% of Americans reject spending more for electricity, with 16% opposing spending any more than 12% extra for electricity. A study commissioned by the American Council for Capital Formation and the National Association of Manufacturers estimated Lieberman-Warner would increase electricity prices by 13%-14% by 2014. Other studies estimated higher increases. When gasoline and electricity price increases are taken together, 90% of Americans reject the Lieberman-Warner plan’s costs—even the low range of projected costs.
"As incredible as it sounds that 90% of Americans reject the Lieberman-Warner plan’s costs, the actual number who reject it may be even higher. Electricity and gasoline price hikes are only two of the costs of this proposal," said David A. Ridenour, vice president of the National Center for Public Policy Research. "The price for food and consumer goods would also increase and many Americans would lose their jobs. You can’t merely accept energy price increases and opt out of all the other costs."
The poll was conducted by Wilson Research Strategies, which surveyed 802 likely voters. It included 37% registered Democrats, 30% Independents, and 29% Republicans. It has a margin of error of +3.46% at 95% confidence interval.
Equipment Hazard Alert for Parking Brakes on Scoops
The Mine Safety and Health Administration recently issued a report saying that the Automatic Emergency Parking Brake (AEPB) on some Bucyrus (formerly Long Airdox) 400 & 600 series scoops may not automatically reset when the hand pump is used to release the AEPBs when the scoop is off. This could be associated with a number of issues, including component wear, or deviations from the original hydraulic circuit design. In such cases the AEPBs will be reset only when the scoop is re-energized and one of the hydraulic functions is operated.
Automatic functioning of AEPBs is required under Title 30CFR 75.523-3(b)(1) and (2). To insure compliance and correct operation, any 400 & 600 series scoops originally manufactured according to Bucyrus hydraulic schematics No. 220534, L-410181X20 or L-012334X1 must be maintained in accordance with Bucyrus hydraulic schematics No. 220534, L-410181X20, Revision “E”, and L-12344X1, Revision “D.” These revised schematics incorporate special notes which describe the potential issues with the AEPBs, and define the part number and installation procedure for a valve which will operate at very low pilot pressures. The following inspection can determine if a scoop’s AEPBs are in compliance:
De-energize the scoop and block the wheels to prevent movement.
Check that the AEPB pressure gage reads zero indicating the AEPB is set.
Operate the hand pump to release the AEPB. The pressure gage will indicate pressure to show that the AEPB is released.
Energize the scoop and allow the pump motor to run, but do not operate any hydraulic controls or apply the AEPB.
To be in compliance, the pressure gage should drop to zero releasing the pressure, which indicates the AEPB is applied.
If the AEPB pressure gage does not drop to zero to engage the AEPB, the scoop’s brake system needs to be brought into compliance. Operate a hydraulic function to release the pressure and apply the AEPB.
Please contact a field representative for assistance in correcting the noncompliance. The potential malfunction of the AEPB, however, may not be limited to this manufacturer only. www.msha.gov
Fraser Creek Mining, based in Scott Depot, W.Va., has agreed to pay 678 coal miners about $200,000 in back pay for unpaid overtime over a period of nearly two years, according to the U.S. Department of Labor. The agency said Fraser Creek also poorly kept records on hours worked by office staff and erred in classifying four clerical workers as exempt administrative employees who were never paid overtime. The incorrectly calculated overtime pay by Fraser Creek extended from January 2006 through December 2007. The operation covers seven surface mines in West Virginia and Kentucky.
In response to a request by the National Mining Association, MSHA has extended until April 30, 2008, the period for comments on the advance draft of the updated “Engineering and Design Manual: Coal Refuse Disposal Facilities.” The advance draft can be accessed at www.msha.gov. The updated design manual is being prepared by MSHA and a team led by D’Appolonia Engineering. D’Appolonia developed the industry’s first design manual for coal refuse impoundments in 1972 for the MESA, the predecessor agency to MSHA, after the Buffalo Creek, W.Va., coal refuse dam failure that caused the deaths of 125 people. The original manual is no longer in print. The updated manual will be greatly expanded and will address advances made in the past 30 years in dam safety and slurry impoundment design, construction, monitoring, inspection, and instrumentation. Specific design guidance has been added to the manual including engineering analysis for siting impoundments over or adjacent underground mines and consideration of earthquake impacts on refuse impoundment dam safety.
MSHA Reminds Mining Community of Mine Accident Phone Number
The Mine Safety and Health Administration (MSHA) wants to remind the mining community to use the agency’s national hotline to report all mine accidents and workplace hazards. Through the “One Call Does It All” campaign, begun last summer, MSHA is distributing an array of stickers, magnets and business cards that display the toll-free number to miners and mine operators nationwide.
That number—800-746-1553—should be used to report hazardous conditions at a mine as well as imminent danger hazardous conditions, those which could cause a serious accident, injury or illness. The hotline also accepts calls to report the location of old mine maps, impoundments and abandoned mines.
"This 'One Call Does It All' phone number makes it easy to contact MSHA in the event of a mine emergency or potential mine hazard," said Richard E. Stickler, acting assistant secretary of labor for mine safety and health. "We want to remind miners, also, of their right to confidentially and anonymously report to MSHA any uncorrected hazardous workplace conditions they may encounter. We can better prevent mining injuries and fatalities when hazards are quickly removed from the work environment."
The Mine Improvement and New Emergency Response (MINER) Act of 2006 included a provision that requires all mine operators to notify MSHA of all accidents that pose a reasonable risk of death within 15 minutes of when the operator realizes an accident has occurred. Violators risk a civil penalty ranging from $5,000 to $60,000.
The new materials, which include a hard hat sticker, a business card, a telephone sticker and a magnet, all carry the one telephone number miners and mine operators need. The items are being distributed by federal inspectors during normal inspections.
NIOSH Announces Schedule for Free, Confidential Screenings for Coal Workers’ Pneumoconiosis
The National Institute for Occupational Safety and Health (NIOSH) will provide free, confidential health screenings to working underground coal miners in 16 counties throughout West Virginia this year to provide early detection of coal workers’ pneumoconiosis, a serious but preventable lung disease also known as "black lung."
The health screenings will be provided through a state-of-the-art NIOSH mobile testing van at convenient community locations. The first visit is scheduled for April 7-19, 2008, in Randolph, Upshur, Webster, Nicholas, and Fayette Counties, W.Va. The full itinerary is expected to include locations in Wyoming, McDowell, Boone, Logan, Mingo, Wayne, Kanawha, Grant, Harrison, Barbour, and Preston Counties.
Under the Federal Mine Safety & Health Act of 1977, all working underground coal miners are eligible for chest x-ray screening at no cost to them. The screening provided by NIOSH will include a chest x-ray, a breathing test, and a one-on-one interview to identify potential health concerns. Typically, the process takes about 30 minutes. NIOSH provides the individual with the results of his or her own screening, but by law each person’s screening remains confidential. No individual information is publicly disclosed, including the names of participating miners.
"As with any illness, early detection is the key to directing timely treatment and intervention," said NIOSH Director John Howard, M.D. "Much like any other physical check-up, the NIOSH health screening involves minimal time and effort by participants. The results of this minimal investment can be critical for miners' health, quality of life, and family peace of mind."
Coal workers' pneumoconiosis is caused by inhaling coal mine dust. Early on, the disease may show few or no symptoms. However, it can progress and cause scarring of the lungs and shortness of breath. In advanced cases, this can lead to disability and death. The disease is not curable but it is preventable. Miners who participate in health screening have the best chance for detecting any injuries to the lungs at an early stage, when steps can be taken to reduce further exposures to coal mine dust and prevent the disease from progressing.
In addition to helping individual miners, the health screening program provides important information about coal workers' pneumoconiosis. The prevalence of coal workers’ pneumoconiosis among long-term miners who participated in chest x-ray screening decreased from the 1970s to the 1990s. However, the rate has recently increased. The current national rate is 9%, double the national rate in 1995. The current rate for long-term miners in West Virginia is even higher, 13%. Knowing the frequency of the disease and who may be at risk is important for determining how to prevent it.
Leading Wall Street Banks Establish Carbon Principles
Three of the world’s leading financial institutions announced the formation of The Carbon Principles, climate change guidelines for advisors and lenders to power companies in the United States. These Principles are the result of a nine-month intensive effort to create an approach to evaluating and addressing carbon risks in the financing of electric power projects. The need for these Principles is driven by the risks faced by the power industry as utilities, independent producers, regulators, lenders and investors deal with the uncertainties around regional and national climate change policies.
The Principles were developed in partnership by Citi, JPMorgan Chase and Morgan Stanley, and in consultation with leading power companies American Electric Power, CMS Energy, DTE Energy, NRG Energy, PSEG, Sempra and Southern Company. The Environmental Defense and the Natural Resources Defense Council and environmental non-governmental organizations also advised on the creation of the Principles.
The Principles, according to a press release, recognize the benefits of a portfolio approach to meeting the power needs of consumers, without prescribing how power companies should act to meet these needs. However, if high carbon dioxide (CO2)-emitting technologies are selected by power companies, the signatory banks have agreed to follow the Enhanced Diligence process and factor these risks and potential mitigants into the final financing decision.
Citi, JPMorgan Chase and Morgan Stanley have pledged their commitment to the Principles to use as a framework when talking about these issues with clients. The Principles and associated Enhanced Diligence, according to the press release, represent a first step in a process aimed at providing banks and their power industry clients with a consistent roadmap for reducing the regulatory and financial risks associated with greenhouse gas emissions. The Principles are:
Energy efficiency—An effective way to limit CO2 emissions is to not produce them. The signatory financial institutions will encourage clients to invest in cost-effective demand reduction, taking into consideration the value of avoided CO2 emissions. We will also encourage regulatory and legislative changes that increase efficiency in electricity consumption including the removal of barriers to investment in cost-effective demand reduction. The institutions will consider demand reduction caused by increased energy efficiency (or other means) as part of the Enhanced Diligence Process and assess its impact on proposed financings of certain new fossil fuel generation.
Renewable and low carbon distributed energy technologies—We will encourage clients to invest in cost-effective renewables and distributed technologies, taking into consideration the value of avoided CO2 emissions. We will also encourage legislative and regulatory changes that remove barriers to, and promote such investments (including related investments in infrastructure and equipment needed to support the connection of renewable sources to the system). We will consider production increases from renewable and low carbon generation as part of the Enhanced Diligence process and assess their impact on proposed financings of certain new fossil fuel generation.
Conventional and advanced generation—Investments in conventional or advanced generating facilities will be needed to supply reliable electric power. Due to evolving climate policy, investing in CO2-emitting fossil fuel generation entails uncertain financial, regulatory and certain environmental liability risks. It is the purpose of the Enhanced Diligence process to assess and reflect these risks in the financing considerations for certain fossil fuel generation. We will encourage regulatory and legislative changes that facilitate carbon capture and storage (CCS) to further reduce CO2 emissions from the electric sector.
The chief justice of the West Virginia Supreme Court agreed to remove himself from a pending case involving Massey Energy Co., days after vacation photos surfaced showing him in Monaco with the coal producer’s top executive, The Associated Press reported. Chief Justice Elliott "Spike" Maynard said he was stepping down from the matter "despite the fact that I have no doubt in my own mind and firmly believe I have been and would be fair and impartial in this case." But in his statement, Maynard said "it has now become an issue of public perception and public confidence in the courts."
Maynard helped form a 3-2 majority in November that overturned a multi-million-dollar judgment against Richmond, Va.-based Massey that another company, Harman Mining, and its president, Hugh Caperton, had won in a contract dispute. Caperton had asked Maynard to step down from the case before the high court reconsiders that ruling. With interest, the damages are worth $76.3 million.
Kentucky Low Mining Deaths in 2007 Credited to New Laws
Kentucky, the state with the most coal mines in the nation, made history with only two mine fatalities in 2007, neither underground, in the nationwide total of 33 miners who died on the job during the year, reported by the Mine Safety and Health Administration (MSHA).
Kentucky’s record is no small achievement, state officials said. The state has the second largest mining work force in the nation and ranks as the third largest coal producer. They credit new mining laws for the low-toll feat, laws prompted by the Sago disaster that killed 12 West Virginia miners in 2006, and later the Kentucky Darby explosion in which five miners died.
"This is a positive indication that the new mine safety laws, including Kentucky’s new drug testing program, are having the desired effect," said the State Natural Resources Commissioner Susan Bush. She referred to the first testing program of the kind in the nation for miners, which has led to the suspension of 443 Kentucky miners since the program was enacted in July 2006. Notwithstanding the achievement of low mine deaths, Bush said, "We cannot let down our guard or lessen our effort to ensure that every miner returns home safely every day. The goal remains zero fatalities."
Texas Adopts Rules to Promote Clean Energy Projects
Texas House Energy Resources Committee Chairman Rick Hardcastle recently applauded the Texas Commission on Environmental Quality (TCEQ) for adopting final rules for the implementation of House Bill 3732, the most significant clean energy bill approved by the Texas Legislature in 2007. Using a mix of tax, financial, and regulatory incentives, HB 3732 encourages the development of clean energy projects, will help local communities build clean power facilities, and will spur energy companies in Texas to make existing plants cleaner. The legislation gives Texas the most stringent emissions standards in the nation for plants seeking to be designated as advanced clean energy projects.
A 1994 amendment to the Texas Constitution allows owners of pollution-control equipment to apply for exemptions from ad valorem taxes on that equipment. The process for granting those exemptions at the TCEQ, however, has been lengthy and the new rules will expedite that process. Hardcastle pointed out the Texas Conference of Urban Counties and the Texas Taxpayers and Research Association supported the new rules, testifying at the TCEQ hearing that HB 3732 is unlikely to adversely affect county tax revenues.
To be designated as an advanced clean energy project, and to be eligible for the incentives, under the TCEQ rules, an energy plant in Texas will have to meet the following emission standards—emission goals the federal government has set as targets for the year 2020: reduce sulfur dioxide emissions by 99%; reduce mercury emissions by 95%; have a nitrogen dioxide emissions rate of no more than 0.05 lb per million Btus; and be carbon-capture ready.
NLRB Files for Injunction to Force Massey to Rehire
Cannelton Workers, Recognize, and Bargain with UMWA The National Labor Relations Board (NLRB) recently filed a Petition for Injunctive Relief with the Federal District Court in Charleston, W.Va., seeking an order that would require Massey Energy’s Mammoth Coal Co. subsidiary to rehire up to 85 miners who previously worked at the former Cannelton mine, now called the Mammoth mine, in eastern Kanawha County, W.Va.
The injunction would also require the company to recognize the United Mine Workers of America (UMWA) as the bargaining representative for all the workers at the mine, implement the terms and conditions of the 2002 National Bituminous Coal Wage Agreement and begin bargaining for a new agreement.
The request for injunction seeks enforcement of a November 2007 decision by NLRB Administrative Law Judge (ALJ) Paul Bogas that found Massey Energy discriminated against employees of the former Cannelton mine when Massey took over operation of the mine in 2004 by refusing to hire them "on the basis of their membership in the predecessor’s bargaining unit and their prounion sentiments."
Massey has appealed that decision. However, if the injunction is granted, Massey will be required to implement the ALJ’s decision while the appeals process is going on.
Employees planning to retire from The American Coal Co.'s mine in Galatia, a coal company owned by Robert E. Murray, will not receive medical benefits according to a letter sent out by the company. According to The Southern, the letter was sent out on December 28 and stated that coverage for medical benefits of employees who retire after December 31 would cease.
The letter from Human Resources Director Richard Wittmeyer was obtained by WSIL-TV 3, who broke the news on a January 1 broadcast. The letter was sent out to employees and attributed the move to the "rising cost of healthcare and its effect on company sponsored healthcare plans" and said that "it is in the best news interests for the continuation of the company as an ongoing business enterprise."
The letter also noted that the medical plan has a provision that permits American Coal to "amend, modify or terminate benefits offered at any time." It also assures that the decision was made after other alternatives were considered.
The country’s top mine-safety regulator will stay on the job despite the expiration of his temporary appointment as assistant labor secretary for mine safety and health. President Bush designated Richard Stickler as acting head of the U.S. Mine Safety and Health Administration, only a few days after the expiration of his recess appointment, The Associated Press reported.
"I’d like to thank the president for his designation today, which will allow us to continue our progress on completing the implementation of Congress’ safety improvements," Stickler said."MSHA’s mission is to help ensure that each and every miner comes home safe after each and every shift, and with Richard’s continued leadership and the diligence of everyone at MSHA, miner safety will continue to advance," said Labor Secretary Elaine Chao.
The Democratic-controlled Senate has so far refused to approve his nomination. Democratic senators have said Stickler spent too many years as a coal-mining executive and failed to demonstrate that safety is his priority. Stickler could have been limited to a 210-day stay starting from Bush’s designation on January. But since his latest nomination is still pending in the Senate, the White House said, the time limit does not apply and Stickler will likely serve until the end of the Bush administration. "The appointment of Richard Stickler to be acting Assistant secretary of Labor for Mine Safety and Health, just days after his term in that position expired because he couldn’t be confirmed by the U.S. Senate, demonstrates the deep level of contempt the Bush administration holds for the Senate and the constitutional role that body holds," said United Mine Workers of America International President Cecil E. Roberts. "The Senate has pointedly refused to confirm Mr. Stickler to this position twice, and refused to bring his name up for confirmation just a few weeks ago. Clearly, ‘no’ is not an answer the administration respects when it comes to Mr. Stickler."
Stickler, the government’s public face during the Crandall Canyon mine disaster in Utah, took over the $340 million agency in late 2006 as a result of an appointment Bush made while Congress was out of session. He inherited an understaffed agency that was facing new mandates following the coal industry’s deadliest year in more than a decade. Forty-seven coal miners died on the job in 2006, the year he took over the agency. "The UMWA’s position on Mr. Sticker has remained consistent from the day he was first nominated in 2005," said Roberts. "We do not believe someone who has spent the majority of his working life as a coal company manager, supervisor and executive ought to be appointed as head of MSHA. The U.S. Senate has agreed with us, under both Democratic and Republican leadership. For the Bush administration to continue to subvert the will of the American people, as expressed by their elected representatives in the United States Senate, is frankly outrageous."
Progress Energy Agrees to Sell Appalachian Coal Mine and River Terminals
Progress Energy recently announced that it has entered into agreements to sell Powell Mountain Coal Co., Dulcimer Land Co., and Kanawha River Terminals to an investor group for $94 million in cash. The Investor Group consists of Pegasus Capital Advisors, L.P., Kelso & Co., and Resource Capital Funds as well as Traxys Projects, an affiliate of Traxys North America, LLC. This is the final divestiture of Progress Energy’s restructuring plan related to the non-regulated investments in Progress Ventures.
Proceeds from the transactions will be used for general corporate purposes. The transactions are expected to close in January 2008 and are subject to customary closing provisions and adjustments. The financial impacts of these transactions are expected to affect the company’s discontinued operations in 2008.
"This is the last step in a successful restructuring plan that has allowed Progress Energy to strengthen its balance sheet and reduce the overall risk profile of the company," said Bill Johnson, chairman, president and CEO, Progress Energy.
Powell Mountain Coal and Dulcimer Land consist of approximately 30,000 acres of land in Lee County, Va., and Harlan County, Ky. There are approximately 40 million tons of coal reserves on the property. Kanawha River Terminals operates five river terminals located on the Ohio River and its tributaries. The facilities have annual capacity in excess of 40 million tons for transloading, blending and storage of coal and other commodities.
Patriot Mining Settles Violations of 2004 Chemical Release at Squire’s Creek Mine
In settlement papers filed in federal district court in Clarksburg, W.Va., Patriot Mining Co. has agreed to pay a $177,000 civil penalty for allegedly failing to immediately notify emergency response agencies of a June 2004 hazardous chemical release at the company’s Squires Creek mine in Arthurdale, W.Va. The settlement resolves a federal complaint filed by the Justice Department on behalf of the Environmental Protection Agency. The government cited the company for violating federal laws requiring that releases or spills of hazardous chemicals be reported immediately to appropriate emergency response authorities.
According to the EPA, the company did not provide required immediate notices to federal, state and local emergency response officials after the facility released at least 31,000 lb of anhydrous ammonia at the mine at approximately 9 a.m. on June 29, 2004. The company did not provide the required notification to the National Response Center until approximately 8:21 p.m. on June 29, 2004, 10 hours after the release was discovered, and the company never notified the appropriate state and local authorities. The health effects of inhalation of anhydrous ammonia range from lung irritation to severe respiratory injuries.
In the settlement agreement, the company denies liability for the alleged violations.
Virginia Tech’s Center for Advanced Separation Technologies Helps Provide Cleaner Energy to India
In support of the Asia-Pacific Partnership on Clean Development and Climate, the U.S. Department of State has awarded more than $1 million to a university-industry team led by the Center for Advanced Separation Technologies at Virginia Tech to help India increase energy production and reduce carbon dioxide emissions by developing and testing advanced technologies for cleaning coal.
"It has been shown that use of beneficiated (cleaned) coals can increase thermal efficiencies and can thereby reduce CO2 emissions by up to 15%," said Roe-Hoan Yoon, director of the Center for Advanced Separation Technology at Virginia Tech. "By using state-of-the art technologies relating to coal quality, boiler and generator design, instrumentation and control, high-voltage distribution system, India could reduce CO2 emissions to 45% of its present level," he said, citing an International Energy Agency (IEA) report.
In 2005-2006, India produced 380 million tons of coal, but only 17 million tons were beneficiated coals delivered to 12 power stations, according to Professor Sumantra Bhattacharya of Indian School of Mines University.
Ash-forming minerals are finely disseminated in Indian coals, making them difficult to remove from the carbonaceous matrix using conventional physical separation methods. Because water is a scarce resource in India, the researchers will develop low-cost dry beneficiation technologies that can remove well-liberated, easy-to-reject rocks or shales that are inadvertently added during the process of mining Indian coals.
The project team consists of researchers from three mining schools, Virginia Tech, Indian School of Mines, and the University of Kentucky; process equipment manufacturer Eriez; Taggart Global, a firm specializing in prep plant design and construction; Indian coal producer Auroma Coke Ltd. (ACL); Sharpe International, which has expertise in building and operating coal plants in India; and Leonardo Technologies, which is experienced in assessing the impacts of various coal technologies on controlling greenhouse gas emissions.
One of the processes has already been tested successfully in the U.S. at pilot scale under the sponsorship of the U.S. Department of Energy (DoE). While the process is highly efficient in cleaning relatively coarse coals whose particle size is in the range of 80 to 6 mm, its efficiency deteriorates below the lower size limit. Therefore, a new method of dry cleaning finer coal will be explored in the India project. An earlier work also funded by the DoE will be the basis for developing this new process.
The project will promote rapid deployment of the dry beneficiation processes in India. In phase 1, a pilot-scale deshaling unit with a maximum capacity of five tons per hour will be constructed and installed at different mine sites and/or power plants. In phase 2, a detailed flow sheet and engineering diagrams will be developed to construct a full-scale proof-of-concept plant in India. "The successful completion of phase 2 will constitute a fully operational and commercially viable installation of the proposed technology in India," said Yoon.
Upon completion of the plant, a detailed test program will be developed and carried out to fully define the operational capabilities of this technology and to establish design protocols for future installations in India.
Peabody Captures Higher Prices; Capitalizes on International Markets
In its third quarter earnings report, Peabody Energy announced that it made significant progress in reshaping its earnings base by increasing production capacity in Australia, concluding cost and productivity initiatives in the Powder River Basin, expanding global coal trading operations, and spinning off Patriot Coal Corp.
“Peabody has outstanding leverage to rising international markets, we have captured higher prices for Powder River Basin and Midwestern coal, expanded global coal trading operations, and stabilized operating costs,” said Peabody Chairman and CEO Gregory H. Boyce. “The strategies we put in place will create meaningful additional value from our reshaped asset base, leading marketing practices, and global expansion.”
A longwall mining section returned to production November 23 at the SUFCO mine in Sevier County, Utah, two days after it was shut down following a “significant bounce.” According to The Salt Lake Tribune, the federal Mine Safety and Health Administration (MSHA) allowed mining to resume after officials of the Arch Coal Co. affiliate made several changes to its mining plan that satisfied MSHA’s concerns, said Amy Louviere, agency spokesperson. She quoted Denver-based District Manager Allyn Davis as saying that MSHA’s district roof control inspector and other technical support personnel conducted on-site inspections of the mine on November 22 and 23. They made several recommendations implemented by the company.
A longwall section of the SUFCO mine, which produces about 7.6 million tons of coal annually, was shut down after a magnitude 2.8 seismic event occurred near the mine at 9:22 p.m. on October 30. Concern about these bounces or bumps have been heightened since the Crandall Canyon disaster last summer.
Union Pacific (UP) recently announced that it has once again surpassed its own monthly record for delivering coal out of Wyoming’s Southern Powder River Basin (SPRB). In the month of November, the railroad delivered 17.9 million tons of coal out of the SPRB, making it the best month on record and surpassing the previous record of 17.1 million tons of coal delivered to customers this past September. For three straight months now, we have consistently increased our South Powder River coal train loadings year-over-year and month-over-month based upon the strength and performance of all three parties in the coal supply chain,” said Doug Glass, vice president and general manager–energy. “We are meeting our customers’ needs as a result of our unrelenting efforts to handle demand as efficiently as possible. We congratulate the mines in the SPRB, the utilities, and our employees for their efforts in making November 2007 the best coal loading month in our history.”
UP also announced the following monthly SPRB coal delivery records:
A record 1,159 coal trains were loaded in November, surpassing September’s record of 1,114 trains loaded in a 30-day month.
A daily average of 38.63 trains loaded in the SPRB in November versus the previous daily average record of 37.13 trains loaded in September.
A single-day loading record of 46 trains were loaded on November 29 to eclipse the previous record of 45 set on September 29.
A consecutive seven-day record set was set twice during the last week of November with 293 and 284 trains loaded, versus the previous consecutive seven-day record set during the last week of September with 278 trains loaded.
Coal train size records of 15,460 tons/train and 130.6 cars/train were established in November. Both metrics are more than 2% higher than last year.
The entire energy commodity group, that includes SPRB, Colorado and Utah, Southern Illinois, Hanna Basin and Coke, had best-ever records for any month regarding tons and car loadings. The total tons record of 23.9 million tons surpasses the August 2007 record of 23.6 million tons. The total carloadings record of 205,462 topped the August 2007 total of 203,759.
The Mine Safety and Health Administration (MSHA) has received a favorable ruling from the Federal Mine Safety and Health Review Commission (FMSHRC) in its case against Twentymile Coal Co. for the Foidel Creek mine in Routt County, Colo. The case involved a dispute over the mine operator’s proposed Emergency Response Plan (ERP), which was not fully approved by the agency.
“The vast majority of Twentymile Coal’s Emergency Response Plan was right on target; however, we took issue with the breathable air provision in the plan,” said Richard E. Stickler, assistant secretary of labor for mine safety and health. “Consequently, the case went before an administrative law judge of the Federal Mine Safety and Health Review Commission, who ruled in favor of MSHA.”
The FMSHRC held a hearing to resolve the ERP dispute on Oct. 2 in Denver. On Oct. 16, Administrative Law Judge Richard Manning issued a decision that affirmed the MSHA citation and ordered Twentymile to provide a facility capable of supplying breathable air to miners who may be trapped in the main entries at the Foidel Creek mine.
The Mine Improvement and New Emergency Response (MINER) Act of 2006 requires mine operators to promptly provide miners with the necessary tools to enable them to escape from mines in an emergency and to survive underground for a sustained period of time if they are unable to escape. A chief mechanism for providing such protection is the development and adoption of ERPs, which underground coal mine operators were required to submit to MSHA district managers for review.
In the case of Twentymile Coal’s proposed ERP, MSHA determined that there was a reasonable possibility miners could be trapped in the main entries of the mine following an accident. In such a situation, miners likely would need an established facility to isolate them from hazardous mine environments and to provide breathable air so that they could survive until they could be rescued. MSHA refused to fully approve the Foidel Creek ERP without a provision for providing breathable air for miners who may be trapped in the main entries.
WVU Professor Publishes Fourth Book on Mining (Oct 2007)
West Virginia University (WVU) Professor Syd Peng, a renowned mining engineering expert and National Academy of Engineering (NAE) member, has published his fourth book. The book, “Ground Control Failures-A Pictorial View of Case Studies,” is a 330-page hardcover that includes more than 1,000 full-color photos of ground control failures in underground mines, along with explanations of the cases.
Peng is the Charles Lawall Chair in WVU’s Department of Mining Engineering in the College of Engineering and Mineral Resources. Earlier this year, he became the first faculty member from WVU to be elected to the NAE, a prestigious organization of the nation’s most elite engineers. Peng is only the fourth person from West Virginia to receive the honor, which is considered the highest that an engineer can achieve in the United States.
Ground control failure refers to any failure of the underground rock strata affected by mining. It also refers to any failure of the supports, hardware or other technology designed to control the rock strata during mining operations. Peng spent more than 33 years working on ground control problems in underground mining. In the book, readers can see for themselves what an underground coal mine looks like and some of the different types of problems that can occur, including pillar failures, roof falls, roof-bolting failures, failures due to multiple-seam mining and others.
The book will contribute to the body of knowledge about these issues, filling a gap in mining literature. “From reactions to the case studies I have published, it has become clear to me that some mining researchers and practitioners have not actually seen all of the different types of ground control failures that can occur and therefore do not have a clear understanding of them,” Peng said. “It is my hope that my photographs of many different types of failure situations, along with written explanations accompanying the photos, will contribute to a better understanding of the wide range of failures that can occur.”
Ground control is a passion for Peng, who founded the International Conference on Ground Control in Mining in 1981. The conference is held each year in Morgantown and attended by coal industry professionals and researchers from around the world. Through his efforts, ground control is now standard terminology in mining operations.
The book is an ideal reference for mining students, researchers, and professionals. For more information or to order a copy of the book, visit www.mine.cemr.wvu.edu.
NIOSH Reports Black Lung Rates Doubled in Decade (Oct 2007)
Black lung disease rates for the nation’s underground coal miners doubled since 1967 among those working 25 years or more in the mines, according to a new study by the National Institute for Occupational Safety and Health (NIOSH). The rate was 4% a decade ago, compared to 9% of lung abnormalities shown in Xray data from 2005 and 2006.
“I think it’s a very significant concern,” said Dr. Edward L. Petsonk, leading black lung researcher at NIOSH in Morgantown, W.Va. He released the new study at the September meeting of the National Coalition of Black Lung Respiratory Disease Clinics in Wheeling.
The study indicates that black lung rates had consistently declined since NIOSH began the X-ray program in 1970. However, there was a small increase between 1995 and 2000, the start of a trend that worsened.
“This is very alarming,” said Dr. Robert Cohen, a black lung specialist at the University of Illinois and medical director of the coalition. “We’re very concerned.”
He reported that new labor department data also shows a large number of miners with most advanced black lung, or progressive massive fibrosis (PMF), who worked in the mines only after the 1969 limits that Congress placed in airborne dust and ordered periodic tests inside mines. There have been 437 PMF cases found since 2001. “Clearly something is wrong with the control of respirable dust in our nation’s mines,” Cohen said.
Penn State, Chevron Launch Energy Alliance (Oct 2007)
Penn State’s expanded initiative in energy sciences and engineering is launching a major research alliance with one of the world’s leading integrated energy companies, Chevron Energy Technology Co., to research coal conversion technologies. The joint research initiative with Chevron will focus on coal chemistry and conversion technology, advanced fuels, combustion, analysis methods, reactor science, separations, process technology, and CO2/greenhouse gas management and conversion. This alliance will also integrate research with educational and career opportunities for students and graduates specializing in coal conversion and energy technologies. Under the alliance, Chevron will provide up to $17.5 million over the next five years to the University.
“Chevron values technological excellence and R&D capability and is impressed with the quality of coal research done at Penn State over the last century,” said Don Paul, vice president and chief technology officer, Chevron Corp. “Chevron also has a rich history in coal through our Chevron Mining Co. and its predecessor P&M Coal. We will draw on the deep expertise of both institutions to push the front edge of technology and innovation into the 21st century. We look forward to a highly productive research relationship that will contribute to the technical innovation of clean coal and coal-to-liquid technology.”
The strength of this alliance rests on the pillars of history and the prospects for the future. “Penn State has been involved in energy-related research and graduate training for more than a century, beginning with one of the first formal schools of mining engineering in the U.S.,” said Penn State President Graham Spanier. “Since that time, Penn State has evolved its coal-related research streams in many directions including conversion of coal to liquid fuels, direct coal liquefaction, modeling and simulation of coal conversion, and carbon dioxide capture and sequestration.”
Building upon this historical strength, in 2006, the University Energy Task Force published a report in which it proposed a bold new road map and strategic vision to enhance the existing energy sciences, engineering and policy within the University’s academic colleges and institutes. To promote the energy initiative, the University has committed funds for the creation of 24 new faculty positions to strengthen the teaching and research efforts.
Penn State will target key strategic areas: state-of-the art coal conversion and carbon dioxide management technologies; materials and nanotechnology for energy efficiency; biofuels, bioenergy and biomaterials; hydrogen production, storage and transportation for fuel cells; public and social discussions of nuclear power; and conversion of light to do work.
MSHA Announces New Process for Collecting Civil Penalties (Oct 2007)
The Mine Safety and Health Administration (MSHA) is implementing several new changes to improve its civil penalty payment process, the agency recently announced. “These are the first of several changes that we are making to streamline our debt collection process,” said Jay Mattos, acting director for MSHA’s Office of Assessments. “Our goal is to establish a better process that is more user friendly for everyone.”
New Mailing Address—Beginning October 1, all payments for civil penalties must be mailed to a new address: U.S. Department of Labor/MSHA, P.O. Box 790390, St. Louis, MO 63179-0390.
Electronic Funds Transfer—Payments that are made by check will be converted into electronic funds transfers (EFTs) and electronically debited to a company’s account for the amount of the check. The debit usually will occur within 24 hours and will be shown on the company’s regular account statements.
Assessment Statement Delivery—MSHA will deliver monthly assessment billing statements via Federal Express. MSHA asks that each company ensure its address of record reported on the Legal Identity Report is correct. Addresses of record on file with MSHA can be reviewed on the agency’s Web site at www.msha.gov/drs/drshome.htm. If another address is desired, the Legal Identity Report can be updated by filing a paper copy that can be obtained from the mine’s servicing district office or online by accessing www.msha.gov under the Forms/Online section of Quick Links.
Independent contractors must also ensure that their records with MSHA are up-to-date and contain street addresses. Information can be sent by mail to: Assessment Center, 7 N. Wilkes-Barre Blvd., Stegmaier Building, Suite 432, Wilkes-Barre, PA 18702; by fax to (570) 826-6778, Attn. Robin Salmon; or via e-mail to salmon.robin@dol.gov.
Notices about the new mailing address, EFTs, and assessment statement delivery are being included in current assessment invoices or mailed separately to operators and contractors. For additional information on MSHA’s new debt collection improvements, please visit www.msha.gov.
Foundation Coal Announces Production Shortfall at Emerald Mine
Foundation Coal Holdings, Inc. recently announced that production at the Emerald mine, operated by its affiliate Emerald Coal Resources LP in Northern Appalachia, has been constrained due to geological challenges encountered during the third quarter of 2007.
Sandstone intrusions slowed mining and reduced production by a total of approximately 550,000 tons in August and September. The second longwall mining system, previously planned for installation in the fourth quarter of 2007, had been expected to largely offset any sandstone-related production shortfalls. Delays in the development of the panel for the second longwall have shifted the start-up date to January 2008. The company now projects full year 2007 production of nearly 6 million tons at the Emerald mine, approximately 600,000 to 700,000 tons lower than the company’s previous estimate. Conditions at Emerald are returning to normal as mining progresses away from the sandstone intrusions, and the scheduled longwall move remains on track for completion in the fourth quarter of 2007.
To address these geological conditions in mining the next panel during 2008, Emerald plans a mid-panel move of its primary longwall mining system designed to circumvent the affected area. Additionally, the second longwall at the Emerald mine is expected to be available throughout most of 2008. Based on the operation of two longwalls beginning in 2008, the company now anticipates future production levels from Emerald to be substantially higher than the annual production originally planned for full year 2007.
Arch Coal Acquires Coal Reserves in Illinois (Oct 2007)
Arch Coal, Inc. announced that on September 28, 2007, it acquired approximately 157 million tons of recoverable coal reserves and significant surface acreage in the Illinois Basin from International Coal Group, Inc. for approximately $38.9 million. Located in Perry and Washington counties, the acquired coal reserves are adjacent to some of Arch’s existing reserves in the region—creating a nearly 300-million-ton contiguous reserve block of high-quality, low-chlorine bituminous coal suitable for units equipped with scrubbers. With this addition, the company now controls more than 375 million tons of coal reserves in Illinois.
“This strategic acquisition further enhances Arch’s substantial reserve position in Illinois, a market where Arch has a long and successful history,” said Steven F. Leer, Arch Coal’s chairman and CEO. “Additionally, this transaction provides a synergistic opportunity with existing reserves that will allow Arch to build a low cost platform for future growth in the Illinois Basin.”
More than 80% of the acquired underground coal reserves are owned in fee, with the remainder controlled under long term leases. This transaction also includes extensive ownership rights to overlying surface acreage capable of supporting mine mouth facilities. Furthermore, the coal reserves are located in close proximity to the Mississippi River to accommodate barge traffic, and are advantageously served by two railroads.
“We expect the Illinois Basin to play a more significant role in U.S. energy markets over the next decade, and envision Arch’s expanded position in the region eventually supporting a mine development for either the domestic utility market or as a stand-alone coal-to-liquids facility, depending on future market conditions,” said Leer.
In addition to company-controlled coal reserves in Illinois, Arch owns an equity interest in Knight Hawk Holdings, LLC, a top 10 coal producer in the Illinois Basin based on 2006 production.
New York Subpoenas Five Energy Companies (Oct 2007)
Attorney General Andrew M. Cuomo of New York has opened an investigation of five large energy companies, questioning whether their plans to build coal-fired power plants pose undisclosed financial risks that their investors should know about. According to The New York Times (NYT), Cuomo is using the same state securities law tactics as his predecessor, Gov. Eliot Spitzer, to investigate corruption on Wall Street. He sent subpoenas to the top executives of the five companies. The companies include: AES Corp., Dominion, Dynegy, Peabody Energy and Xcel Energy.
It is rare, if not unique, for a securities law to be used for an environmental purpose, in this case the fight against new coal-fired power plants according to NYT.
In letters accompanying the subpoenas, the attorney general’s office asked whether investors received adequate information about the potential financial liabilities of carbon dioxide emissions that exacerbate climate change.
“Any one of the several new or likely regulatory initiatives for CO2 emissions from power plants—including state carbon controls, E.P.A.’s regulations under the Clean Air Act, or the enactment of federal global warming legislation—would add a significant cost to carbon-intensive coal generation,” the letters said. “Selective disclosure of favorable information or omission of unfavorable information concerning climate change is misleading.”
The Mine Safety and Health Administration (MSHA) has announced a new initiative to complete 100 percent of mandated regular inspections for all coal mines in the country.
“Due to the large number of inspector-trainees replacing retired or departing inspectors, MSHA has faced challenges in completing regular safety and health inspections,” said Richard E. Stickler, assistant secretary of labor for mine safety and health. “The 100 Percent Plan will ensure that MSHA has the necessary resources to fully enforce the Mine Act.”
Under the Federal Mine Safety and Health Act of 1977, only fully accredited inspectors (Authorized Representatives or ARs) have the authority to conduct inspections and issue citations. When inspector-trainees are hired, they must complete extensive training at the Mine Health and Safety Academy in Beckley, W.Va., in addition to fulfilling on-the-job training requirements, before becoming Authorized Representatives.
Since July 2006, MSHA has hired more than 273 new inspector-trainees. Once these new inspectors receive their AR certifications, MSHA’s coal enforcement ranks will be at their highest level since 1994.
MSHA’s new 100 Percent Plan calls for the temporary reassignment of MSHA inspectors to areas where they are most needed and provides for increased overtime for additional hours needed to complete inspections until all trainees are fully qualified.
Miners Families Testify at Committee Hearing (Oct 2007)
Family members of the miners who died at the Crandall Canyon mine tragedy appeared before the House Education and Labor Committee on Oct. 3, 2007, and expressed their desire for a thorough investigation of the August mine collapse.
“As families, we want the truth of what happened,” said Cesar Sanchez, brother of miner Manuel Sanchez. “Someone needed to look after our interests both before the collapse, which would have prevented it, and after the collapse, to assure that everything possible was being done to rescue…and find my brother.”
Rep. George Miller (D-CA), chairman of the committee, said that the committee’s investigation into the mine collapse will continue. “We will take every action necessary to hold individuals responsible for what appears to have been a preventable tragedy,” said Miller. “We believe it is critical to get to the truth of the events before, during, and after this disaster in order to prevent another one.”
Utah Gov. Jon Huntsman, Jr. also testified and agreed that a complete investigation is needed. “The families of all the miners who died and were injured deserve to have a full understanding of the circumstances that led to the deaths of their loved ones,” said Gov. Huntsman.
Family members recounted the confusion in the days and weeks after the mine collapse. They said it was difficult to receive reliable information on the rescue efforts from the mine owner and the federal Mine Safety and Health Administration. “The manner in which [mine owner Robert] Murray and MSHA approached the families for the first two weeks after the collapse was unbelievable,” said Mike Marasco, son-in-law of miner Kerry Allred. “They just told us what we wanted to hear and not the facts.”
Wendy Black, wife of miner and rescue team member Dale “Bird” Black, spoke about the duty her husband felt to help rescue his fellow miners. “My husband felt that he had to be there because these trapped miners were his friends, his family in a way,” said Black. “He had told me about the letters and pictures that the families had put up at the mine. This gave Dale the courage and determination to go back into that hell hole.”
Family members also spoke on the impact of the mine disaster on them and the rest of their loved ones. “Our lives are changed forever,” said Steve Allred, brother of miner Kerry Allred. “Kerry’s wife is having a very hard time and will for some time to come. Her kids and I are trying to be strong for her. That’s all we can do.”
“It is hard to have hope, only to have your heart broke,” said Sheila Phillips, mother of miner Brandon Phillips, who attended the hearing with her five-year-old grandson, Gage. “It is hard to see your grandson left fatherless.”
Chairman Miller, who also announced that he intends to markup mine safety legislation he introduced in June by the end of the month, requested copies of Labor Department communications regarding Crandall Canyon prior to the families’ visit to Capitol Hill. On September 24, 2007, the House Education and Labor Committee issued a subpoena to U.S. Labor Secretary Elaine Chao for the communications. As a last resort to compel and expedite this production of information, according to a statement form Miller’s office, the Committee issued its subpoena.
MSHA Issues New Mine Rescue and Safety Training Grants (March 2007)
The Mine Safety and Health Administration (MSHA) announced during January the availability of more than $7.9 million in health and safety training grants being issued by MSHA in fiscal year 2007. “These grants are part of MSHA’s ongoing commitment to advance miner safety and health through funding training programs,” said Richard E. Stickler, assistant secretary of labor for mine safety and health.
Grantees will use the funds to provide federally mandated training to miners. The grants cover training and retraining of miners working at surface and underground coal and metal and nonmetal mines, including miners engaged in shell dredging or employed at surface stone and sand and gravel mining operations. The monetary amount of the grants MSHA is awarding in fiscal year 2007 is the same level as the previous fiscal year because the federal government currently is operating under a continuing budget resolution from Congress.
Peabody Energy Posts Excellent Results (March 2007)
Peabody Energy’s full-year 2006 revenues grew 13% over the prior year to a record $5.26 billion on coal sales volume that led the industry at 248 million tons. The increase was driven by higher prices and increased volumes in all regions. Average revenues per ton for the year improved more than 7% in the U.S. and more than 6% in Australia. Operating profit increased 28% for the year to $663.1 million. Net income for 2006 totaled $600.7 million, compared with prior-year income of $422.7 million.
“The Peabody team delivered record results for the fifth consecutive year,” said Peabody President and CEO Gregory H. Boyce. “And in 2007, we are targeting increased results as we benefit from greater access to high-margin global coal markets, along with higher realized U.S. prices from sales contracts signed in recent years. The international coal markets are very strong, and we expect U.S. markets to strengthen in 2007 with the announced industry production cutbacks and a return to normal electricity generation. In the near term, we are managing our U.S. production and capital to match demand.”
In the fourth quarter, Peabody completed the acquisition of Excel, one of Australia’s largest coal companies, acquiring more than 500 million tons of reserves to accommodate future expansion. Peabody anticipates EBITDA from international coal activities to be as much as 30% of the company’s total in 2007 and continue to increase in later years.
During 2006, Peabody achieved its second best safety performance in the company’s 123-year history. The company received eight awards for safety including, for the second time in three years, the U.S. Department of Labor Sentinels of Safety award for the safest U.S. surface mine. The company was recognized with 14 reclamation awards, including five granted by the U.S. Department of the Interior. In the fourth quarter, Peabody also joined the S&P 500 index and was named to Forbes “Platinum List of America’s Best Big Companies.”
