Coal news and updates

Westmoreland Resources opens three new surface coal mines in Ohio

Northern Appalachian thermal coal producer Westmoreland Resources has started mining at three new surface operations in Ohio, but has no plans to open two other mines that already have state permits, a company official said Monday.

"We're in operation at Spiedel and Shugert South," the latter of which recently began producing coal, Greg Honish, Westmoreland senior vice president of operations, said Monday. The company, formerly known as Oxford Resource Partners before it was acquired late last year by Colorado-based Westmoreland Coal, also has started up the new Wheeling Valley AAA surface mine in Harrison County, Ohio.

Spiedel and Shugert South both are in Belmont County.

Westmoreland typically operates relatively small surface mines, with total output ranging between just under 500,000 st to 1.5 million st over the life of the mines. For that reason, the company usually has several permit applications in the hopper at the Ohio Division of Mineral Resources Management as it looks to replenish depleting mines.

Honish said Spiedel is the largest of the new mines, with total output of more than 1.5 million st anticipated.

But Ohio's largest surface miner has no plans to open its new Richmond surface mine in Jefferson County or the Buttermilk surface mine in Belmont County until 2016 at the earliest.

Richmond "is on hold until we deplete out at other operations," he said. Buttermilk, meanwhile, is totally market-dependent, although "we actually did some development and got a little coal out" earlier this year.

For US coal producers, virtually everything depends on the markets, and Honish said they are the worst he has seen during his 36 years in the coal business.

Most of Westmoreland Resources' coal averages between 11,500-12,000 Btu/lb and about 6 lb/MMBtu sulfur.

The Ohio-based company produced 1.1 million st in the first quarter, down from 1.4 million st a year ago.

As of March 31, Westmoreland Resources said its long-term coal supply contracts ranged from one to three years.

source: http://www.platts.com