New mine could create more than 200 jobs
Date posted: June 17, 2014
SHERIDAN — Last month, the Kentucky-based Ramaco, LLC, announced plans to open a coal mine between Sheridan and Ranchester. The endeavor represents an economic opportunity for the local economy, but also a pioneer effort to bring Appalachian mining techniques to Wyoming.
Initial mining plans for the proposed Brook Mine, which will be located in an area near the existing Acme exit of Interstate 90, are to use a “highwall” mining technique to excavate coal. Ramaco CEO Randall Atkins said he hopes to create between 200 and 225 high-paying jobs — foremen, engineers, etc. — when the mine opens in a few years.
The proposed mine encompasses approximately 15,000 acres of mostly private land acquired by Ramaco in 2011. The proposed site also includes a swath of land that will remain undisturbed because it contains a historic floodplain. With environmental considerations aside, Atkins said he aims to mine 6-8 million tons of coal per year.
“It turns out there’s a whole lot of coal here,” Atkins said, suggesting the previous land owner may have underestimated the fossil fuel resources on the land. “We’ve got almost 1.1 billion tons of coal.”
The vast majority of the mine land — 90 percent — is privately owned by Ramaco.
Ramaco’s business plan’s profitability hinges on both a relatively low-cost mining technique and the fact that the mine will not be required to pay federal bonuses or royalties.
“This is 20 years’ worth of mining just on the first mining plan we’ve done,” he said. “And, as we start poking holes and find more coal, we may expand to more areas. This could probably go on for several decades.”
The proposed new mine land is bisected by both Interstate 90 and the Burlington Northern Santa Fe, LLC, rail line.
The technique of highwall mining entails digging a shelved trench into terrain and then using a HWM machine to excavate coal. The machine consists of an auger, or drill, that burrows as far as 2,000-feet into the hillside. An accompanying conveyer belt then transports the coal backward through the drilled hole to be transported.
In this case, Atkins said plans are to truck the coal to a rail yard that will be situated near what is now known as the Taylor Quarry.
HWM is considered a variation of surface mining, as people do not physically go underground to recover the coal. The HWM technique is a distinct departure from the conventional approach to western mining, but is used extensively in the eastern United States.
“A lot of the type of mining done out in Wyoming is what I call ‘moon scaping’,” Atkins explained. “Some people call it an ‘open pit’ or ‘truck and shovel,’ where you remove all the topsoil and keep going down.
“That works in places like Gillette that have huge seams. Coal seams here aren’t that thick. They’re more shallow,” he said, adding that HWM is a perfect fit for the coal seams found near Sheridan.
The aftermath of a highwall mining operation is a hillside with multiple holes drilled side-by-side, creating a “honeycomb” appearance.
Atkins said coal from the Northern Powder River Basin represents a unique economic opportunity for Ramaco.
“In terms of thermal coal, we felt this is probably the strongest or one of the strongest regions in the country to mine,” Atkins said, explaining that coal found near Sheridan contains a relatively high British Thermal Unit (BTU) ratio and lower sodium than other coal mined in the region.
Atkins remained optimistic that the “war on coal” raging on a national level will not have a long-term effect on profits from the new local mine.
“I think that as that is implemented, things will change because I think it will be shaped by regulatory change, legal change and things like that,” he said. “Having said that, the utilities we sell to will likely be in the Midwest, and they will not be as badly impacted. Our coal fits very well with what their burning requirements would be.”
New stipulations from the Environmental Protection Agency have dictated emissions from new coal-fired power plants reach unprecedented low levels of carbon emissions. The constricted operability of some existing power plants and tight regulations for new facilities has created a cutthroat domestic market. Atkins said he’s confident Brook Mine coal will fill a niche.
“The reality is there are some coals that can be used in the same utilities from different mines, and there are some utilities that can only burn certain types of coal,” he said, adding that he sees the mine’s future product as unique to that mined at existing nearby mines, including the Decker and Spring Creek mines.
“It’s not as much head-to-head competition as you might suspect because even though you think of coal in generic terms, it really has specialized chemical properties that each coal is a little different and each utilities boiler accepts certain types of coal and not others.”
Atkins said he hopes to market two-thirds of coal mined from the Brook Mine domestically, while the remaining one-third would be marketed overseas using existing North American export terminals.
“We have come up with a route to avoid the mess going on in the Washington and Oregon area,” Atkins said, indicating Ramaco has considered shipping coal to Asia via an export terminal in Canada. Ramaco also owns a terminal south of New Orleans.
Atkins said Ramaco is currently working with multiple local engineering groups, to include drilling companies and environmental consultants, to get the Brook Mine off the ground.
He’s also waiting on a finalized socioeconomic study that would outline the potential economic impact of the mine, which he intends to make public.
“What we hope is we’ll file this summer and that process will take a year or more than a year, and we’ll start mining in 2016,” Atkins said, knocking on the wooden conference table at Sheridan’s Ramaco office on Sugarland Drive.
Atkins said the current mine plan is divided into two phases, each encompassing its own area.
Ramaco’s present goal is to have an initial Phase 1 surface mining permit application submitted by August in hopes of having the permit issued by the end of 2015. The Phase 2 application is expected to be submitted in the fall of 2015 to begin mining in 2017.
“Wyoming has a reputation for trying to get things done and move these projects forward, rather than trying to come up with reasons not to do things,” Atkins said. “We’ve had the same experience and we’re happy up to this point.”
Atkins added that while nothing is ever “in the bag,” Wyoming’s Department of Environmental Quality and other regulatory agencies have been accommodating to Ramaco’s development ambitions.
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