Most of the mine’s output will be targeted at the domestic scrubbed electric utility market, although some coal may be sold for overseas export as well, according to David Gay, president and CEO of Hartshorne and its parent company, Paringa ASX PNL.
The mine will be located in both Hopkins and McLean counties on the 154-million-ton Buck Creek Resources reserve once developed by Alpha Natural Resources of Bristol, Va. Gay is a former executive with both Alpha and the former Pittston Group. Gay said the coal is good quality, averaging 11,800 Btu/lb and 2.8% sulfur.
Hartshorne is in the process of wrapping up a scoping study that should be completed this spring. “We have accomplished a tremendous amount of work over the past three or four months,” he said in March.
The end of the scoping work will signal the beginning of a pre-feasibility study “that will firm up everything we’ve done so far, and we’ll be going out for bids” to lock in sales contracts. We are continuing to lease some mineral property and we have pretty much all of the surface we need for the first 10 years,” Gay said.
Almost all of the leases are with individual mineral holders, including local farmers. “We are continuing to lease some mineral property,” he added.
Hartshorne has finished a marketing study that places the company in a position to start selling the coal.
Gay said the company has secured a Section 404 Clean Water Act permit from the U.S. Army Corps of Engineers for the mine. “There are some minor permits we haven’t applied for yet,” he said.
The timeline for the start of production remains a bit uncertain. Mine construction is estimated to take about 18 months, so if gets under way in early 2015, the initial tons could be extracted in late 2016 or early 2017. The mine is expected to be a continuous miner operation.
Depending on the demand for the coal, the reserve could support more than one underground mine. “We’re still putting some pieces together,” Gay said, “but ultimately it could support more than one mine.”
