If all goes as planned, Hallador’s total production could triple to about 9 million tons of thermal coal annually in several years. But there is much work to be done first.
Before the end of this year, and hopefully much sooner, the company expects to be issued a permit by the Illinois Department of Natural Resources’ Office of Mines and Minerals for the new Bulldog mine in Vermilion County, Ill., according to Brent Bilsland, Hallador’s former president who was promoted to CEO on January 24.
Bulldog will be a continuous miner operation, producing about 3 million tons a year from a company-leased reserve base of 32.3 million tons of high-sulfur coal. Hallador also has identified another 21.8 million tons of non-controlled reserves that conceivably could be mined someday. The company already has purchased 400 acres for surface facilities and leased more than 19,500 acres for mining. The mine will create 268 full and part-time jobs with an annual payroll of $23 million.
Later this year, the company intends to submit a permit application to DNR for the new War Eagle mine in neighboring Lawrence County, Ill. The mine is named for the battle cry of the Auburn University athletic teams in Alabama, and Bilsland said he let a company official and Auburn alumnus name the mine.
War Eagle, a continuous miner operation as well, would produce in the range of 3 million tons annually. Hallador has leased about 11,000 acres containing an estimated 29.4 million tons of reserves in Lawrence County.
Bilsland said it is not certain when either new mine will be in operation, although neither probably will produce coal until sometime in 2015. Hallador plans to work this year to market their coal, most likely to scrubbed electric utilities in the U.S.
Carlisle, the company’s first mine, still has many years of reserves remaining. The mine’s output increased in 2013 to 3.13 million tons from approximately 3 million tons in 2012, according to U.S. Mine Safety and Health Administration figures.
Carlisle, whose coal is sold to utilities in Indiana and Florida, could benefit this year by having its high-sulfur thermal coal blended with low-sulfur coal from Hallador’s newest mine, the Ace-in-the-Hole surface mine in Clay County, Ind.
Ace produced 119,886 tons in 2013, its first year of operation. It is not expected to be a large mine, Bilsland said, probably topping out at about 500,000 tons annually. But it should turn out more coal this year if Hallador is successful in capturing more sales in the southeastern U.S. where more utilities increasingly are eyeing the Illinois Basin but may be attracted to the Carlisle-Ace lower-sulfur blended product.
Hallador also has sold some stoker coal from Ace to smaller utilities.