Billed as the largest surface mine in the Eastern U.S., the mine began shipping coal on May 27, 2010, on time and on budget, according to the St. Louis-based company. Bear Run’s sales this year are expected to be in the range of 3 million to 3.5 million tons. But that’s just a warmup act for a $350 million to $400 million mine that should reach peak production of 8 million tons a year in 2012.
Peabody has secured long-term sales contracts for Bear Run with major electricity generators throughout Indiana and the Midwest and will supply in excess of 90 million tons over a 17-year period. The contracts are expected to generate nearly $6 billion in revenues for Peabody. The mine will serve both power plants and industrial customers. The Bear Run complex includes a mine, prep plant and related structures.
According to Gallagher, the mine will produce high-sulfur coal from the Danville No. 7 and Hymera Nos. 5 and 6 seams. The coal’s sulfur content varies from medium (3-3.5 lb) to high (5.5-6 lb), with a heat value of 10,800 to 11,000 Btu/lb.
At its disposal, Bear Run is able to draw upon a reserve base of 225 million tons. Eventually, the mine will have at least 350 employees. The prep plant is capable of processing 1,600 tons of coal per hour and is expandable to 2,000 tons an hour with minimal equipment additions, Peabody said. The mine site has the capacity to handle two 135-car unit trains. Rail service is through the Indiana Railroad, which earlier this year completed an approximately 5-mile spur into the site, with access to end markets via rail.
Peabody said Bear Run will inject more than $550 million in direct and indirect benefits annually into the regional economy. Late last year, Peabody, as scheduled, shut its Francisco surface mine in Gibson County, Ind. Gallagher said Peabody holds the No. 1 production and reserve position in the high-sulfur Illinois Basin, and will continue to grow in the region in line with market demand.