Bilsland said his company will continue to develop the continuous miner operation that tentatively would produce its first coal in 2018. Bulldog’s coal, as is the case with coal from the company’s other Illinois Basin mines, would be sold to U.S. electric utility customers, including several in the region and in Florida. The Bulldog mine, located near Allerton in Vermilion County, would produce up to 3 million tons of high-sulfur coal annually. It would be the first Illinois mine for Hallador/Sunrise, which until now have mined exclusively in neighboring Indiana. The mine project has encountered some local opposition, mainly from environmental groups opposed to coal.

Currently, Hallador essentially is operating only its two Oaktown underground mines in Knox County, Indiana, and the small Ace in the Hole surface mine in neighboring Clay County, Indiana. The two Oaktown mines produced about 2.8 million tons in the first half of 2016, with Ace chipping in with another 145,000 tons for a company total of about 3 million tons. That leaves the company on pace to reach projected output of approximately 6 million tons in 2016. The Oaktown mines were acquired by Sunrise from Evansville, Indiana-based Vectren Corp. more than two years ago. The Prosperity underground mine in Pike County, Indiana, also included in the transaction, was idled by Sunrise soon after the deal closed.

Until two years ago, Hallador’s flagship mine had been the Carlisle underground operation in Sullivan County, Indiana. For nearly a decade, Carlisle turned out about 3 million tons of steam coal annually. But Carlisle, a higher-cost mine, began to be pared back and its production shifted to the Oaktown mines once they were purchased. At present, Carlisle is idled, according to Bilsland. His hope, however, is for a sufficient improvement in the steam coal market so Carlisle can reopen in 2017 at a production rate similar to what the mine is used to. Whether that will happen remains unclear. However, Bilsland predicts steam coal demand will recover in late 2017 and 2018 because of projected increases in natural gas prices.