CA-Black-Transp

Knight Hawk Plans to Grow Production


Illinois Basin high-sulfur coal producer Knight Hawk Coal soon will seek regulatory approval to construct a new portal at its Prairie Eagle underground mine in Perry County, Ill., as part of the company’s plans to invest nearly $100 million in its southern Illinois mining operations over the next two years. If Knight Hawk gets the green light to proceed with the project, the portal will be developed “sometime in 2013 or into 2014,” according to Steve Carter, the company’s president. “We’re developing plans and haven’t filed an application, but we hope to do that shortly.”

The new portal is designed to extend the life of the mine that began producing coal in 2006. Knight Hawk is known as a company that both understands and embraces its role as a regional producer of steam coal mainly for the electric utility scrubber market. It has no aspirations to become another U.S. industry giant like Peabody, CONSOL or Arch. But it does have a modest growth strategy.

“We’re trying to get and stick around 5 million tons a year,” Carter said. The company produced 4.2 million tons in 2011.

Knight Hawk also is awaiting state approval of an application to begin mining at its proposed Golden Eagle surface mine, also in Perry County. The company and Illinois Department of Natural Resources have negotiated a lease for Golden Eagle, part of which will be located within the nearly 20,000-square-acre Pyramid State Park near Pinckneyville.

In 2011, the Illinois General Assembly passed a bill that enables Knight Hawk to mine the privately owned acreage in the state park.

In 2006, St. Louis-based Arch Coal acquired a one-third interest in Knight Hawk in exchange for cash and coal reserves. Since then, Arch has increased its ownership share of Knight Hawk to the current 49%.