Coal news and updates

Alliance Resource Partners is shutting its Pattiki underground thermal coal mine near Carmi in White County, Illinois, later this fall, sources said Monday.

 

While the Tulsa, Oklahoma-based company expects to idle Pattiki in November, the exact reason for the closing is unclear, Art Rice, an official with the Illinois Department of Mines and Minerals office in Benton, said in an interview.

 

White County Coal, which operates Pattiki for Alliance, informed the mine's roughly 275 employees on Friday about the impending shutdown, according to sources. The company has not issued a formal statement about Pattiki's closing, and Alliance officials did not respond to several phone calls on Monday.

 

Pattiki, placed in operation in 1980 by the former Mapco Coal, apparently is not running out of recoverable reserves.

"I show them having 21 million st of recoverable coal at Pattiki," Rice said, enough to provide for another eight or 10 years of operation at current production levels.

 

Perennially one of the largest continuous miner operations in Illinois, Pattiki produced 2.3 million st in 2015 and just over 1 million st in the first half of 2016, according to the US Mine Safety and Health Administration.

 

The move follows similar decisions by Alliance late last year to idle other higher-cost underground mines in the high-sulfur Illinois Basin, including Gibson North in Gibson County, Indiana, and Onton, or Sebree, in Hopkins County, Kentucky. Alliance also laid off about 200 workers at its newer Hamilton No. 1 longwall mine in Hamilton County, Illinois, and its large River View continuous-miner operation in Union County, Kentucky.

 

Information compiled by the state agency indicates Pattiki may have issues with productivity and cost.

 

For example, Pattiki's 1,200 st/hour prep plant had an average reject rate of 58.2% in 2015, one of the highest reject rates in the state.

 

That means, essentially, that nearly 4.1 million st of raw coal was run through the prep plant to get the 2.3 million st saleable output, which would increase production costs.

 

In addition, Pattiki averaged only 3.3 st of production per manhour in 2015, one of the lowest figures in the state. In comparison, Foresight Energy's Williamson County Coal longwall mine near Marion averaged production of 12.1 st/manhour.

 

State records show that since its inception, Pattiki has produced nearly 64 million st of coal, one of the highest totals in Illinois but dwarfed by American Coal's 175.4 million st at its Galatia underground mining complex in Saline County. AmCoal is a subsidiary of Ohio-based Murray Energy.

 

As of Monday, Alliance/White County Coal had not issued a formal WARN Act layoff notice for Pattiki, an official with the Illinois Department of Commerce and Economic Opportunity in Chicago said.

SOurce:Platts.com