Bulldog, a planned continuous miner operation, is not far from Hallador’s existing Carlisle deep mine just across the Indiana border in Sullivan County, Ind. Hallador also was preparing this spring to begin producing lower-sulfur coal from its newest mine, the Ace-in-the-Hole strip job, in Clay County, Ind.
Hallador President Brent Bilsland had insisted a February decision by the Homer Village Board to reject the water/sewer contract for Bulldog was not a killer for the project. If need be, he said after the vote, the company would supply its own water/sewer service for the mine.
But that turned out not to be necessary when the village board did a 180° a month later and voted to enter into a contract with Hallador/Sunrise. Bilsland said the mine enjoyed and appreciated the support of most local residents all along, but was not surprised by the about face.
Unlike most coal mines in Illinois, Bulldog is close to Champaign County, home of the University of Illinois. Illinois coal industry officials said that close proximity to college environmental groups most likely accounted for early opposition to the mine.
Hallador expects to spend the remainder of this year acquiring required regulatory approvals for the mine. Construction is pegged to start in 2014, with the mine producing coal in 2015. Once in peak production, Bulldog could turn out as much as 3.5 million tons of high-sulfur coal annually.
That’s just slightly more than Carlisle, also a continuous miner operation. After the mine’s production fell slightly to about 3 million tons in 2012, a year when a couple of Hallador’s customers asked the company to store coal for them for a while because of reduced burns, it is projected to bounce back to 3.3 million or 3.4 million tons in 2013.
Historically, Carlisle has guaranteed a 6 lb/SO2 product, supplying electric utilities with scrubbed power plants. But Ace-in-the-Hole, whose coal is in the 2 lb/SO2 range, is intended to provide new market opportunities for the company.
Blending some Ace-in-the-Hole coal with Carlisle’s will enable Hallador to ensure a mid-sulfur product the company believes will command a higher price. Few mines in the IB have the ability to offer their customers various ranges of SO2, Hallador says.
Hallador told the U.S. Securities and Exchange Commission in early 2013 it had contracted to sell 3.2 million tons at an average price of $40.49/ton this year, and 1.7 million tons at an average price of $45.01/ton in 2014.
