DECEMBER 2011 VOL. 116 NO. 12

FEATURE ARTICLES NEWS/6 MINE RESCUE/34

34 The 100th Anniversary National Mine Rescue Contest Returns to Columbus Sponsored by MSHA, 103 mine rescue teams from 13 states compete

42 The Illinois Basin Supply-side Story A new study sheds more light on the revitalization taking place in Illinois, Indiana and Western Kentucky

ILLINOIS BASIN UPDATE/42 SUPPLIERS NEWS/46 COAL IN THE NEWS

6 Alpha settles with DoJ on UBB mine explosion

6 VHGI to buy Indiana mine

7 MSHA cites corporate culture as root cause of UBB tragedy

13 Alliance has a busy third quarter

16 Rhino invests in production units

22 TECO discovers additional met reserves

24 U.S. Forest Service decides in favor of West Elk mine

26 Indiana gasification project gets the green light 27 Will FutureGen 2.0 become a reality? THIS ISSUE 28 Helmkamp nearing completion on emissions control projects at Dynergy coal power plant

29 Senate introduces the Fair Compliance Act: A more realistic In addition to providing an in-depth report on the Illinois EPA regulation timeline Basin, Coal Age this month covers the National Mine Rescue Contest, which took place in Columbus, Ohio, dur- WORLD NEWS ing October. The event was celebrating its 100th anniver- sary. On the cover, a mine rescue team member takes a gas 7 Anglo American approves Grosvenor met coal project in reading during a problem-solving exercise. Australia DEPARTMENTS Australia’s Abbott Point plans for future expansion 4 Editorial 9 Pike River Coal’s former CEO charged over 2010 6 Coal in the News mine explosion that killed 29 7 World News New underground mine to start production in Indonesia 16 People 13 Mechel signs long-term agreement with BelAZ 18 Dateline Washington 22 Calendar Transet improves freight rail efficienct into Richards Bay 46 Coal Terminal Suppliers News 48 Product News Mitsubishi to expand Aussie coal mining 53 Classified 56 Legally Speaking

December 2011 www.coalage.com 1 JENNMAR

We’re JENNMAR, a multi-national, We now operate eleven manufac- to none. We feel it is essential to develop family-owned company that is lead- turing plants throughout the United a close working relationship with every ing the way in ground control tech- States. Of these eleven facilities, ten customer so we can understand their nology for the mining, tunneling and are related to manufacturing ground unique challenges and ensure superior civil construction industries. For control products, and the eleventh is customer service. Our commitment to more than 40 years, our singular a steel service center that supplies a the customer is guided by three words; focus has been on manufacturing steady flow of flat steel products. Safety, Innovation and Service. It’s products and creating strata control Globally, we operate six manufactur- these words that form the foundation of solutions that help keep those who ing facilities, with three located in our business. It’s who we are. work underground safe and more Australia and three more in China, productive, from bolts and beams to Chile and Canada. We’ve also just channels and trusses to resin and acquired a facility in Poland to better rebar! And with manufacturing serve our European customers. plants and distribution networks JENNMAR continues to grow, but around the world, we are uniquely our focus will always be on the cus- positioned to react to ground control tomer. We will always provide excep- Frank Calandra, Tony Calandra, needs anywhere, anytime. tional, on-going service that is second President Executive Vice President

Safety. Innovation. Service.

Company Profile—Paid Advertisement editor’s note Making Amends for the UBB Mine Disaster www.mining-media.com Mining Media International Editorial Office 11555 Central Parkway, Suite 401 In a well-choreographed exercise, the federal government Jacksonville, Florida 32224 U.S.A. issued a set of announcements relating to the Upper Big Phone: +1.904.721.2925 Branch (UBB) disaster on December 6, 2011—National Fax: +1.904.721.2930

Miner’s Day. During the morning, the Department of Justice Editor-In-Chief—Steve Fiscor, [email protected] (DoJ) issued a press release saying that Alpha Natural Western Field Editor—Russ Carter, [email protected] Resources had settled with it for a record $209 million (See News, p. 6). Presumably at the same time, Mine Safety and European Editor—Simon Walker, [email protected] Health Administrators were meeting with the widows and Latin American Editor—Oscar Martinez, [email protected] BY STEVE FISCOR surviving family members in Beckley, W.Va. During the Associate Editor—Gina M. Tverdak, [email protected] mid-afternoon, MSHA held a press conference to discuss its / EDITOR-IN-CHIEF Associate Editor & Photographer— findings. Lee Buchsbaum, [email protected] Not much had changed from earlier reports (See Coal Age, July 2011, p. 30). The agency had officially completed its investigation. It issued 369 citations and orders Graphic Designer—Austin St. Clair, [email protected] to Massey Energy’s Performance Coal Co. (See News, p. 8), which operated the UBB coal mine. A methane ignition and coal dust explosion killed 29 miners on April 6, Mining Media International 2010—the worst U.S. coal mining disaster in 40 years. Alpha Natural Resources Corporate Office 8751 East Hampden, Suite B1 acquired Massey Energy earlier this year and it took responsibility for the incident Denver, Colorado 80231 U.S.A. and much more. Of that settlement, each of the families directly affected by the Phone: +1.303.283.0640 tragedy received $1.5 million. MSHA cited a corporate culture that put production Fax: +1.303.283.0641 before safety as the primary reason for the explosion. President/Publisher—Peter Johnson, [email protected] While the loss of one life is one life too many, hopefully the next generation will Vice President of Sales & Marketing—John Bold, [email protected] learn from the UBB coal disaster. What MSHA has said is that the UBB mine was an accident waiting to happen. A lot of people will wonder why these men took that U.S. & Canada Sales Manager—Victor Matteucci, [email protected] risk. Knowing what I know about coal miners, they were putting food on the table. Scandinavia, UK and European Sales Manager—Colm Barry, [email protected] None of them would likely ever be rich. We should say a prayer for all of them, espe- German Sales Manager—Gerd Strasmann, [email protected] cially the poor souls that knew they were putting other people’s lives in jeopardy. Classified Advertising—Norm Rose, [email protected] If you believe Joe Main and Kevin Stricklin, and I do, they did their best to find the Show Manager—Tanna Holzer, [email protected] answers that the 29 UBB miners took to their graves. The trail of MSHA citations lead- ing up to the UBB disaster was remarkable. During the press conference, Main and Ad Traffic Manager—Erica Freeman, [email protected] Stricklin took quite a bit of heat. Reporters grilled them as to how they would let a mine get to this point and why they didn’t just shut the mine down. MSHA followed protocol; it believed, at the time, that it had done all it all it could do. During the press conference, they said that in addition to the UBB recovery efforts, they immediately tried to deter- mine where the next possible disaster would occur and stop it. They vowed not to let this happen again. Words the coal industry has heard time and again. Now the industry is seeing the manifestation of that response in the form of heightened inspections. Coal Age, Volume 116, Issue 12, (ISSN 1040-7820) is published monthly by Mining Media Inc., 10 Sedgwick Drive, Englewood, Colorado 80113 (mining-media.com). The good news is that Alpha Natural Resources is leading the way. A certain level of Periodicals postage paid at Englewood, CO, and additional mailing offices. Canada competitive camaraderie exists among mining professionals at leading coal companies Post Publications Mail Agreement No. 40845540. Canada return address: Station A, PO when it comes to safety programs. Alpha believes its Running Right program is the best. Box 54, Windsor ON N9A 6J5, Email: [email protected]. Current and back issues and additional resources, including subscription request forms and an editorial From the moment the DoJ announcement was made, it was clear that Alpha, which is calendar, are available online at www.coalage.com. viewed as a leader in coal mine safety, had a hand in crafting the settlement. Instead of SUBSCRIPTION RATES: Free and controlled circulation to qualified subscribers. seeing the money disappear into some nebulous government compliance-enforce- Non-qualified persons may subscribe at the following rates: USA and Canada, 1 year, ment strategy, $80 million will be invested in making mine safety improvements at $56.00, 2 year, $96.00, 3 year, $162.00, Student, $16.00, Outside the USA and Canada, 1 year, $77.00, 2 year, $137.00, 3 year, $225.00 surface mail (1 year, existing mines and $48 million has been committed to a mine safety and health $145.00, 2 year, $257.00 airmail delivery). For subscriber services or to order single research trust—not just an investment for Alpha’s miners, but for all coal underground copies, write to Coal Age, 8751 East Hampden, Suite B1, Denver, CO 80231 USA; call +1.303.283.0640 (USA) or visit www.mining-media.com. miners. Finding positives in a mining tragedy is difficult, but this is certainly a major step in the right direction. ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of select- ed archived articles from leading electronic databases and online search services, including Factiva, LexisNexis, and Proquest. For microform availability, contact ProQuest at 800-521- 0600 or +1.734.761.4700, or search the Serials in Microform listings at www.proquest.com.

POSTMASTER: Send address changes to Coal Age, P.O. Box 1337, Skokie, IL 60076 USA. REPRINTS: Mining Media Inc, 8751 East Hampden, Suite B1, Denver, CO 80231 USA phone: +1.303.283.0640, fax: +1.303.283.0641, www.mining-media.com PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, Steve Fiscor, Coal Age Editor-In-Chief or instructional use may be obtained from the Copyright Clearance Center (CCC) at +1.978.750.8400. Obtain further information at www.copyright.com. [email protected]

COPYRIGHT 2011: Coal Age, incorporating Coal and 4 www.coalage.com Coal Mining & Processing. ALL RIGHTS RESERVED.

news

Alpha Settles with DoJ on UBB Mine Explosion

The federal government made two major announcements on corporate criminal liability of the former Massey, not potential December 6, National Miner’s Day, regarding the investigation criminal charges for any individual. The criminal investigation of into the Upper Big Branch (UBB) mine disaster.The Department individuals associated with Massey remains ongoing. of Justice announced it had reached a settlement with Alpha Since acquiring Massey, Alpha has cooperated fully with the Natural Resources, which took responsibility for the UBB mine authorities and has implemented extensive measures to improve when it purchased and merged Massey Energy with its operations health and safety at legacy Massey operations. “We believe the agree- earlier this year; and the Mine Safety and Health Administration ments we’ve reached represent the best path forward for everyone,” (MSHA) released the final report on its investigation. said Kevin Crutchfield, CEO, Alpha Natural Resources. “We’re particu- Alpha agreed to make payments and safety investments totaling larly pleased that a substantial portion of the settlement is going $209 million in connection with the criminal investigation of an toward furthering miner safety, which has always been Alpha’s guid- explosion at the UBB mine located near Montcoal, W.Va., on April 5, ing principle.” 2010. “Today’s agreement represents the largest-ever resolution in a criminal investigation of a mine disaster and will ensure appropri- The Settlement and the Plan Moving Forward ate steps are taken to improve mine safety now and will fund How the $209 million will be distributed: research to enhance mine safety in the future,” said U.S. Attorney • $80 million in mine safety improvements at all of its underground General Eric Holder. “While we continue to investigate individuals mines, including those formerly owned by Massey; associated with this tragedy, this historic agreement—one of the • $48 million in a mine health and safety research trust, to be used to largest payments ever for workplace safety crimes of any type—will fund academic and non-profit research that will advance efforts to help to create safer work environments for miners in West Virginia enhance mine safety; • $1.5 million in restitution to each of the families of the 29 miners who and across the country.” died at UBB, and to the two individuals who were injured, for a total As part of a “non-prosecution” agreement, Alpha will invest at restitution payment of $46.5 million; and least $80 million in mine safety improvements at all of its under- • $34.8 million in penalties owed to MSHA. ground mines, including those formerly owned by Massey. Alpha Remedial safety measures included in the agreement: will also place $48 million in a mine health and safety research • Installation of digital ventilation monitoring systems in all of its under- trust, to be used to fund academic and non-profit research that ground mines; will advance efforts to enhance mine safety. In addition, the com- • A plan to ensure that each of its underground mines meet all legal pany will pay restitution of $1.5 million to each of the families of requirements concerning coal accumulations; the 29 miners who died at UBB and to the two individuals who • The use of state-of-the-art equipment to monitor its mines for explo- sive concentrations of coal dust; were injured, for a total restitution payment of $46.5 million. • Purchase next-generation rock dusting equipment (pending MSHA Alpha also will pay a total of up to $34.8 million in penalties owed approval); to MSHA, including all penalties that arise from the UBB accident • Installation of oxygen cascading systems to help miners escape; and • Building of a state-of-the-art training facility with a full training cur- investigation. riculum to train Alpha miners, which will also be available to other This settlement, according to DoJ, is the largest-ever resolution mining companies. in a criminal investigation of a mine disaster. It addresses only the

± BREAKING NEWS

VHGI to Buy Indiana Mine additional 80 million recoverable tons. “By having this much acreage under Texas-based VHGI Holdings said its wholly-owned operating company, direct control of this operation, and with all the permits in place, we could VHGI Coal, Inc., has extended its binding letter of intent until January 30, not have crafted a better scenario for us to enter this sector of the energy mar- 2012, to purchase a coal mine in Indiana. VHGI and Rick Risinger, the ket,” said Doug Martin, president and CEO, VGHI Holdings. “We see this as an sole shareholder of the Lily Group assets, which includes the Landree outstanding opportunity to expand VHGI’s footprint with an experienced and mine in Green County, Ind., are in the process of obtaining the various professional team and to create significant value for our shareholders.” bank, third-party and regulatory consents necessary to consummate the The mine has received all necessary regulatory approvals, and is cur- transaction. VHGI Coal has already invested approximately $4.5 million rently in production. The mine is currently shipping and producing approx- in the company to build-out the infrastructure and put the mine into full imately 130,000 tons of coal since August 2011, and is expanding production by January 2012. When the transaction is completed, Risinger production starting in January. The mine is strategically located within will become president of VHGI Coal. 150 miles of multiple coal burning electrical generation facilities, and The company has the rights to mine a total of 2,800 acres, with verified has a rail spur adjacent to the property to facilitate a unit train and trans- reserves of 21 million saleable tons of coal, with the ability to expand to an portation logistics on-site.

6 www.coalage.com December 2011 news continued

TOP 10 COAL-PRODUCING STATES WORLD NEWS ¸ ˛ ˝ ¸ (in Thousand Short Tons) Anglo American Approves Grosvenor Met Coal Project in Australia Week Ending (12/3/11) YTD ‘11 YTD ‘10 % Change Anglo American will move forward with its $1.7 billion Grosvenor metallur- Wyoming 400,365 408,528 -2.0 gical coal project in the Bowen Basin of Queensland, Australia. The green- West Virginia 128,068 125,177 2.3 field project is situated immediately to the south of the company’s Kentucky 99,393 97,494 1.9 Moranbah North metallurgical coal mine and is expected to produce 5 mil- Pennsylvania 54,627 54,600 — lion metric ton per year (mtpy) from a longwall operation over a projected Montana 39,031 41,580 -6.1 life of 26 years. Texas 38,971 37,923 2.8 “Grosvenor is the first of our next phase growth projects and will initi- Indiana 33,460 32,527 2.9 ate our industry leading production growth of metallurgical coal from our Illinois 31,848 30,939 2.9 Australian business over the next decade,” said Cynthia Carroll, CEO, Anglo North Dakota 25,937 26,963 -3.8 American. Colorado 25,639 23,464 9.3 The Grosvenor project forms a major part of the company’s strategy of tripling met coal production from its Australian assets by 2020 using a U.S. Total 1,000,394 1,002,637 -0.2 standard longwall and coal handling and preparation plant (CHPP) design model. In its first phase of development, Grosvenor will consist of a single The former Massey work force of more than 7,000 people has new longwall mine, targeting the same Goonyella Middle coal seam mined been trained in Running Right, Alpha’s behavior-based safety at Moranbah North, and will process its coal through the existing Moranbah process, which builds on transparency and empowering employees North CHPP and train loading facilities. A pre-feasibility study for expansion to make safety and workplace improvements. Employees are by adding a second longwall at Grosvenor is under way. encouraged to speak up by submitting suggestions and then partici- “We are excited to be developing the first growth phase of our planned pating in developing and implementing action plans. In the first Moranbah hub which will drive our target of 12% compound annual produc- four months after acquiring Massey, Alpha devoted more than tion growth by 2020,” said Seamus French, CEO, Anglo American’s 60,000 hours of training to this effort, and safety performance has Metallurgical Coal business. “Grosvenor and the wider hub will produce improved as a result. some of the highest quality coking coal in the world and represents a major Alpha said it has begun a second phase of training specifically investment commitment for the region. Our longwall design model will targeting those with supervisory responsibilities, focused on two enable us to replicate our approach across our expansion footprint, ensur- fronts: Running Right leadership and safety compliance. Since June ing the transfer of best practice project efficiency, cost control and risk mit- 1,450 supervisors have completed leadership training and more igation. We have also now received confirmation of our development rights than 1,000 certified mine examiners have completed safety skills from the Queensland government for the expansion of the Abbot Point coal training and extensive safety compliance training. Alpha has also port—a dedicated export facility that would have the capacity to accommo- conducted emergency response training for mine foremen, superin- date the growth from our Moranbah hub.” tendents, safety staff and management in all its business units. First development coal from Grosvenor is expected in 2013 and the Alpha has also devoted considerable resources to review mine commissioning of the longwall in 2016. Such project timings are contingent plans at all of the former Massey operations. Those reviews have upon the receipt of the appropriate licenses and permits. Grosvenor has included ventilation surveys and modeling at underground mine received approval of its Environmental Impact Statement, the project’s sites, as well as analysis of geological, structural and roof support. Environmental Authority is in train and the key Mining Lease is anticipated To help expedite this work, the company has hired additional tech- During the first quarter of 2012. nical services professionals and additional safety specialists. Australia’s Abbott Point Plans for Future Expansion MSHA Cites Corporate Culture as Root Cause The Queensland Government selected Preferred Respondents to negotiate of UBB Tragedy development of the T4-9 Project at the Port of Abbot Point, located on the The Mine Safety and Health Administration has imposed a fine of Central Queensland coast approximately 25 km northwest of Bowen. more than $10.8 million, the largest in agency history, following its Queensland Premier Anna Bligh said following a call for Expressions of investigation into the April 2010 explosion at the Upper Big Branch Interest by North Queensland Bulk Ports Corp. (NQBP) in mid-2011 for the (UBB) mine, which was operated by Performance Coal Co., a sub- development of additional coal terminals at the Port of Abbot, there was sidiary of Massey Energy Co. The investigation followed an explo- significant industry interest shown. sion that killed 29 miners and injured two—the worst U.S. coal The Preferred Respondents include: Anglo American Metallurgical Coal, mining disaster in 40 years. A report concludes that Massey’s corpo- Macmines Austasia, North Queensland Coal Terminal (consortium of rate culture was the root cause of the tragedy. MSHA has issued Macarthur Coal, Peabody Energy, New Hope Corporation, Middlemount Coal Massey and PCC 369 citations and orders, including an unprece- and Carabella Resources), Rio Tinto Coal, Vale and Waratah Coal. These dented 21 flagrant violations, which carry the most serious civil companies will now progress to the next stage of contract negotiations for penalties available under the law. coal terminals at the port, Bligh said. Secretary of Labor Hilda L. Solis, Solicitor of Labor M. Patricia Bligh said NQBP is working closely with the mining industry and key Smith, MSHA Assistant Secretary Joseph A. Main and MSHA stakeholders to plan for the future and the necessary port requirements for Administrator for Coal Kevin Stricklin met with families to share the agency’s findings. Continued on pg 9...

December 2011 www.coalage.com 7 company profile - paid advertisement

8 www.coalage.com December 2011 news continued

“The tragic explosion at Upper Big Branch left dozens of fami- Continued from pg 7... lies without husbands, fathers, brothers and sons,” said Secretary 2017 and beyond. “This current expansion proposal for Terminals 4 to 9— Solis. “I made a pledge to the families of those we lost, and the known as the T4-9 Project—will provide six additional stockpile terminals entire mining community, to conduct the most complete and at the Port of Abbot Point.” Cost for T4-9 are estimated to be as much as $9 thorough investigation possible in order to find the cause of this billion. disaster. The results of the investigation lead to the conclusion “This is an important step toward increased private sector investment that PCC/Massey promoted and enforced a workplace culture in new coal export infrastructure in Queensland,” Bligh said. “The govern- that valued production over safety, and broke the law as they ment is putting in place the building blocks to allow private sector propo- endangered the lives of their miners. By issuing the largest fine in nents to progress their mine, rail and port development proposals.” MSHA’s history, I hope to send a strong message that the safety of This announcement is limited to the right of the Preferred Respondents miners must come first.” to negotiate with NQBP and does not confer development rights. The agency’s presentation of findings followed a non-prosecu- Detailedcommercial agreements are expected to be negotiated with the tion settlement reached among the U.S. Attorney’s Office for the Preferred Respondents bymid-2012. If the parties reach agreement, the Southern District of West Virginia, the U.S. Department of Justice, respondents will begin discussions with NQBP about the detailed planning Alpha Natural Resources Inc. and Alpha Appalachia Holdings and environmental requirements for the terminals and access to a proposed Inc., formerly known as Massey Energy Co. “This agreement can Multi-Cargo Facility (MCF). The MCF is necessary to provide sheltered harbor go a long way toward changing a safety culture that was clearly capable of accommodating up to 12 Capesize berths to facilitate exports broken at Massey’s mines,” said Secretary Solis. “Although this from the port. agreement is significant, it in no way absolves any individuals The T4-9 Project, together with the planned MCF and other expansions responsible for this terrible tragedy of their criminal liability. We at Abbot Point will enable the growth of coal exports from the port’s existing will continue to cooperate with the U.S. Attorney’s Office to capacity of 50 million mtpy up to an estimated 385 million mtpy. ensure that the responsible parties will be brought to justice.” MSHA concluded that the 29 miners died in a massive coal Pike River Coal’s Former CEO Charged Over 2010 Mine Explosion that Killed 29 dust explosion that started as a methane ignition. While the Pike River Coal’s former Chief Executive Peter Whittall faces 12 criminal investigation found the physical conditions that led to the coal charges over the 2010 mine explosion that killed 29 miners, the New Zealand dust explosion were the result of a series of basic safety violations Labor Department recently confirmed. A methane-fueled explosion rocked at UBB, which PCC and Massey disregarded, the report cites the Pike River coal mine in southwestern New Zealand November 19, 2010, unlawful policies and practices implemented by PCC and Massey trapping the 29 men. A second major explosion five days later dashed hopes as the root cause of the explosion—including the intimidation of that any workers had survived. The department announced charges in the miners, advance notice of inspections, and two sets of books with disaster but declined to immediately detail them or name the defendants hazards recorded in UBB’s internal production and maintenance because of strict court rules on name-suppression in pending cases. It said book but not in the official examination book. The investigation those rules were lifted in this case. Whittall’s charges include four counts of found that the operator promoted and enforced a workplace failing to ensure that “no action or inaction” in his role at the company culture that valued production over safety, including practices “harmed another person.” calculated to allow it to conduct mining operations in violation of According to The Telegraph, other charges were also filed against the the law. now-bankrupt Pike River Coal Co.and against the VLI Drilling Co. Whittall’s “Every time Massey sent miners into the UBB mine, Massey lawyers said Whittall denied all the charges and would fight them. “Whittall put those miners’ lives at risk. Massey management created a cul- is a coal miner,” his lawyers wrote in a release. “He comes from a coal min- ture of fear and intimidation in their miners to hide their reckless ing town and has worked in underground mines all his life. He maintains practices. The report brings to light the tragic consequences of a that he would never do anything to put men who worked with him at risk. corporate culture that values production over people,” said Main. And, Whittall will fight being scapegoated now.” MSHA issued PCC and Massey 12 citations and orders deemed contributory to the cause of the accident, and nine of those viola- New Underground Mine to Start Production in Indonesia tions were assessed as flagrant, which carry the highest possible Kusuma Raya Utama an Indonesian and Chinese joint venture, is planning penalties. Violations include illegally providing advance notice to to begin production at its second underground thermal coal mine, located in miners of MSHA inspections; failing to properly conduct required Bengkulu on the Indonesian island of Sumatra in April 2012. According to examinations; allowing hazardous levels of loose coal, coal dust Intellasia.net, the new mine, which is a 50:50 joint venture between an with and float coal dust to accumulate; failing to adequately apply rock Jiangxi, China-based Zhongding International Engineering, is expected to dust to the mine; failing to adequately train miners; and failing to produce 600,000 metric tons (mt) of thermal coal in 2012. The joint venture comply with approved ventilation plans and approved roof control already operates one 300,000-mtpy underground thermal coal mine, adja- plans. MSHA also issued 357 citations and orders to PCC and cent to the new mine, which began commercial production in June 2009. Massey that did not contribute directly to the explosion, Coal is transported by truck from the existing mine to the government- including 11 assessed as flagrant. Additionally, MSHA issued two owned Pulau Baii port, which can accommodate 9,500-mt barges. contributory and two non-contributory violations to David Stanley Consulting LLC—a contractor that supplied examiners and other miners to work at UBB—for its examiner’s failure to properly con- duct examinations. These violations carry penalties of $142,684. Continued on pg 13...

December 2011 www.coalage.com 9 company profile - paid advertisement

L&H Industrial Inc.

As a world leader in the mining aftermarket parts and service industry, with a demonstrated high safety standard, L&H Industrial has been leading the way designing, engineering and manufacturing superior products to meet customer’s needs since 1964. L&H is a global leader in alternative enhanced replacement parts for draglines, shovels and drills. We maintain more than 15 million in nal grinding as well as external grinding functions and on-board inventory parts and our shipping and receiving experts work with each inspection capabilities. customer to ensure the part needed is shipped quickly and cost effec- In addition, L&H industrial now has Horsburgh & Scott authorized tively. More importantly, L&H excels in designing and building custom repair facilities in Wyoming and Arizona. These facilities offer full gear parts to meet the most demanding schedules and requirements, using box rebuild services in the Western U.S. and parts of Mexico. L&H is state-of-the-art technology and equipment. Our well-trained employ- one of the few companies with the knowledge, facilities and capacity ees are sought after for their expertise for unique repairs and second to repair many of the largest of mineral processing parts. L&H provides opinions, both in-shop and in the field. Known by reputation through- repair or rebuild capabilities on many models of crushers, mills, out the mining industry, L&H’s quality engineered alternative OEM screens, conveyors and can also rebuild, modify or repair most of the parts come with a full warranty and installation if needed. mechanical components for several vintage brands of thickeners, agi- We are pleased to announce the installation of two new impressive tators and clarifiers. machine tools in our Phoenix operation. L&H Industrial, Inc., is headquartered in Gillette, Wyoming, and is The first is a CNC Ravensburg lathe with turning, milling and Wyoming’s premier machining, welding and manufacturing shop grinding functions. The machine has a 55” swing and 354” length including a 24/7 immediate response team for field repairs. Recently, capacity. On this new machine, components can be machined com- L&H Industrial’s Field Service Team rebuilt a 2570 Walking Shoe. The plete from turning, threading, splining and milling in one position ver- rebuild consisted of removing the 4-inch thick slide plate. The internal sus older technology that may have required multiple machine tools to bulkheads were retrofitted by L&H welders so that a 6-inch thick plate complete. L&H Industrial now has one of the largest CNC lathes in the could replace the old 4-inch plate. Extensive crack repair was done Southwestern U.S. throughout the shoe, along with blend grinding the weld joints to The second machine tool addition is a HOFLER Rapid 6000 CNC ensure longer life and less stress risers. The new plate was machined form gear grinder. The machine has 9” to 236” diameter capacity and and then the newly manufactured grease guards were attached. The is capable of achieving AGMA 14 quality levels. The Hofler has inter- slide was assembled and all lube lines were pre-plumbed at our facility so the shoe could be installed in a “turn-key” operation. This is another quality L&H project done on time and safely. Other U.S. based offices outside of Gillette include: Sheridan, WY; Phoenix, AZ; Tucson, AZ; and globally in Antofagasta, Chile; Cananea, Sonora, Mexico; and McKay, Queensland, Australia.

Headquarters: L&H Industrial, Inc. L&H Industrial, Inc. L&H Industrial, Inc. L&H Industrial, Inc. L&H South America L&H Mexico L&H Australia 913 L&J Court 1909 Commercial Ave. 1710 Broadway 691 E. 20th St. #121 18 Septiembre #490 Benito Juarez #36, 4 Unit 3/16 Transport Ave. Gillette, WY 82718 USA Sheridan, WY 82801 USA Tempe, AZ 85282 USA Tucson, AZ 85719 Antofagasta, Chile Oeste y Oeste Nexus Business Park Tel: (307) 682-7238 Tel: (307) 674-4431 Tel: (480) 968-6141 Tel: (520) 882-8007 Tel: (011) 56-55- Cananea, Sonora Paget, MacKay QLD www.lnh.net 560156 84620 Mexico 4740, Australia Tel: (011) 52-645-332-6161 Tel: 61 (0) 7 49 525 855

10 www.coalage.com December 2011

Blastcrete Equipment Company hydrostatic drive train, direct drive air, or electric motor. The full line of Gunite machines features the AA020 Genuine Piccola machine, Blastcrete’s simplest solution for underground gunning applications up to 6-cubic yards per hour. It offers precise materi- al output, with the ability to deliver a maximum of 3/8-inch aggre- gate. The compact design permits operation in even the tightest spaces, and the unit is designed for easy maintenance and clean- ing as well. Blastcrete also manufactures wet shotcrete pumps and mix- er/pump combinations for various high- and low-volume shotcrete applications. Its low-pressure squeeze pumps are designed for wet shotcrete applications with 150 ft. and ultra-high pressure swing tube pumps are designed to pump low slump ½” aggregate shotcrete mixes extreme distances. The hallmark of Blastcrete’s underground shotcrete line is the revolutionary Mine Mate. It fea- tures Blastcrete’s ultra-high pressure X10 swing-tube pump and a For more than 60 years, Blastcrete Equipment Company has been compact configuration that fits within a 4-foot ceiling. The unit is a leading manufacturer of safe, reliable and user-friendly mixing, capable of mixing and pumping 12 cubic yards per hour, and can pumping and spraying equipment for the shotcrete industry. An handle aggregate up to 3/8-inch diameter. Offering the highest innovative and progressive company, Blastcrete has evolved its piston face pressure in the industry at 2,200 PSI, it can pump product line throughout the years to address new needs in the material in excess of 500 feet, horizontally and vertically. marketplace, and accommodate changes in safety standards, new Additionally, the hydraulic pump can run in reverse to eliminate applications and more efficient methods. line pressure from the delivery line should a hose plug. Blastcrete recognizes the importance of safe operation in the In addition to underground and mining, Blastcrete’s equipment underground mining industry, and offers heavy-duty mixers and is designed for a variety of markets worldwide, including refracto- pumps for the new foamed rock dusting, underground gunite appli- ry, commercial and residential building, and ICF and SCIP build- cations, shotcreting and grouting. The company also works with ing systems. The company’s full line of equipment includes customers to create customized solutions for various underground shotcrete pumps and mixers, variable speed mixer/pumps, material handling applications. Piccola gunite machines, high-pressure swing-tube pumps, Dry-process gunite equipment consists of a complete line of hydraulic squeeze pumps and easy-care ball seat pumps. mixing, predampening, and gunning machines. These machines Blastcrete also houses an extensive inventory of high-quality feature the simple and proven "Genuine Piccola" technology and pumping hoses, pipes, shotcrete nozzles, hose couplings and one-bolt clamping system, and are offered with a heavy-duty other accessories.

For more information, contact Blastcrete Equipment Company, 2000 Cobb Ave, Anniston, AL 36202, call 800-235-4867, fax 256-236-9824, e-mail [email protected], or visit the websites at www.blastcrete.com and www.blastcreteunderground.com.

12 www.coalage.com Company Profile—Paid Advertisement December 2011 news continued

The accident investigation report, along with supplementary Continued from pg 9... documents, is available on the agency’s UBB single source page at Mechel Signs Long-term Agreement with BelAZ www.msha.gov/PerformanceCoal/PerformanceCoal.asp. Mechel OAO, one of the leading Russian mining and metals companies, Alliance Has a Busy Third Quarter signed a long-term partnership agreement with BelAZ OAO during the ses- sion of the Supreme State Council of the Union State of Russia and Belarus Alliance Resource Partners enjoyed a busy, profitable third quar- held on the level of heads of state. ter. The Tulsa, Okla.-based company rang up record financial Igor Zyuzin, chairman, Mechel and BelAZ General Director Pyotr results while building for the future in the form of additional Parkhomchik signed the long-term partnership agreement in the presence of long-term coal sales and starting construction on a new, highly Russian President Dmitry Medvedev, Belarusian President Alexander anticipated underground mine in southwestern Indiana. Lukashenko, Russian Prime Minister Vladimir Putin, and Belarusian Prime Alliance also disclosed more details about its partnership agree- Minister Mikhail Myasnikovich. ment earlier this year with White Oak Resources to build a new long- BelAZ will supply haul truck and spare part for Mechel’s mining opera- wall mine near McLeansboro in Hamilton County, Ill. tions. It will also establish, cargo platforms and certify a Mechel subsidiary For the three months ended September 30, Alliance’s net income as one of BelAZ’s service centers in the Russian Federation. Mechel Group’s climbed 42.2% to $104.1 million while revenues totaled a record mining division, which is one of BelAZ’s chief customers in Russia, plans to $487.7 million, up 18.8% over the year-ago period. Alliance sold a acquire haultrucks mainly for use on the Elga coal deposit with estimated record 8.3 million tons of coal at an average price of $56.89/ton in reserves of 2.2 billion metric tons of coking coal, which is located in south- the latest quarter versus 7.6 million tons at an average price of eastern Republic of Sakha (Yakutia). Mining at this deposit, which is one of $51.68/ton in the third quarter of 2010 the world’s largest, commenced in August 2011. During the quarter, Alliance sold approximately 28.4 million tons of coal to be delivered over the next five years. It also complet- Transnet Improves Freight Rail Efficiency into Richards Bay Coal Terminal ed the White Oak Resources transaction and began construction on As of July 2011 to end of October, the number of tons of coal delivered per the new Gibson South mine just west of Princeton, Ind. month to Richards’ Bay Coal Terminal by Transnet Freight Rail has been Based on results through the first three quarters of 2011, Alliance above 6 million. This figure has been significantly higher than this year’s continues to anticipate 2011 coal sales of 32 million to 33 million highest figure of 5.6 million tons which was delivered in March. Similar tons, substantially all of which is committed and priced. Beyond improvements in freight rail transportation of commodities have been noted 2011, the company has secured coal sales commitments for approx- on the Sishen to Saldanha Bay railway line, for iron ore, and the Hot as Hell imately 34 million tons, 33.2 million tons and 26.3 million tons in (north of Sishen), to Port Elizabeth Bay, for manganese. 2012, 2013 and 2014, of which about 7.7 million tons in 2013 and 7.1 “This commendable increase in the number of tons transported by million tons in 2014 remain open to market pricing. Transnet Freight Rail to the various ports contributes significantly to the The company “continues to build for the future and is focused revenues accruing from exports through foreign exchange earnings into our on growing long-term cash flow on a sustainable basis,” said Joseph economy. This is a welcome contribution in these uncertain economic condi- Craft III, president and CEO, Alliance. “Near term, we expect 2012 to tions when governments are under pressure to improve their economies. We be another growth year for ALRP,” thanks partly to the planned believe that the leadership of Transnet deserves to be acknowledged for startup in the first quarter of 2012 of the Tunnel Ridge longwall mine their sterling effort in increasing rail transportation efficiencies. We are fur- in Ohio County, W.Va., and Washington County, Pa. Tunnel Ridge is ther delighted to hear of plans to relocate the manganese loading terminal expected to draw upon a nearly 100-million-ton reserve base to pro- from Port Elizabeth to Coega where there is potential for expansion. The duce about 6 million tons of high-sulfur coal anually at peak output. mining industry depends to a large extent on efficient freight rail trans- Meanwhile, challenging geological conditions at the Pontiki portation,” said Bheki Sibiya, CEO, South African Chamber of Mines. underground mine near Inez in Martin County, Ky., and the impact of stringent regulatory compliance on productivity contributed to lower Mitsubishi to Expand Aussie Coal Mining Central App sales volumes in the third quarter of 2011. A longwall Mitsubishi Corp. plans to upgrade its coking coal operations in Queensland, move at the Mountain View mine in Tucker County, W.Va., resulted Australia, in line with expectations that steel production will grow in China in lower Northern Appalachian coal sales volumes in the quarter. and other emerging markets, The Nikkei reported. The Japanese trading Coal prices improved in all of Alliance’s operating regions in house will invest approximately A$2.1 billion (US$2.17 billion) to expand the third quarter of 2011. In particular, increased price realiza- existing mines and develop new sites owned by the BHP Billiton Mitsubishi tions in Northern Appalachia from coal sold into the high-priced Alliance BMA, a joint coal-mining venture the firm established with Anglo- export markets drove the company’s total average coal sales prices Australian resources giant BHP Billiton. Mitsubishi’s expansion efforts are up to 10.1% to a record $56.89/ton. expected to raise its annual output by roughly 14% to 8 million metric tons Alliance and White Oak Resources, a privately owned company, by 2014. In March, Mitsubishi and BHP Billiton endorsed plans to develop are in the process of constructing the White Oak No. 1 mine, which BMA’s new Daunia mine and grow capacity at Hay Point, a key coal-shipping is targeted to produce up to 6.5 million tons a year when it goes into port. Under its new plan, Mitsubishi’s investments in BMA will reach 433 full production in 2014. billion yen. Alliance plans to invest more than $525 million in White Oak over several years, with the No. 1 mine expected to provide a total royalty stream of at least $400 million to Alliance over 20 years. The partnership also may develop additional mines in southern Illinois. ˛

December 2011 www.coalage.com 13 Company Profile—Paid Advertisement news continued

Under their agreement, White Oak will pay a newly created rate of 3.3 million tons annually. Gibson County Coal, an Alliance Alliance subsidiary, Alliance WOR Properties, a “fully recoupable subsidiary, will operate Gibson South. It currently operates a sister minimum monthly royalty of $1.625 million during the period start- deep mine, Gibson North, just a few hundred yards away. Gibson ing January 1, 2015, through December 31, 2034, subject to certain South will be a continuous miner operation. renewal options for White Oak,” Alliance said in a recent filing with the U.S. Securities and Exchange Commission. Rhino Invests in Production Units In late November, Alliance formally dedicated Gibson South, a Rhino Resource Partners said demand for all of its metallurgical coal $200 million mine expected to begin production in 2014 with a work and much of its steam coal remains strong, and the company in force of 330 people. By 2015, the mine should be producing at the November began operating a new highwall miner at its Grapevine m PEOPLE IN THE NEWS

Patriot Coal Corp. announced the realignment of its operations manage- he was a recognized expert consultant worldwide providing knowledge ment to strengthen oversight of key mine complexes in Appalachia and based services to enhance the safety and productivity of thermal coal dry- facilitate plans for expansion of captive production. Effective November ers—a process that included his patents. Bill was a member of the ASTM 21, the following management team will report directly to Bennett K. D-5 committee participating in the development of coal analysis stan- Hatfield, executive vice president and COO: dards. He was also a member of the American Chemical Society and • John R. Jones will join Patriot as vice president of operations-West received the Bituminous Coal Research Award in recognition of his out- Virginia South Region, including the Rocklick, Wells, Big Mountain and standing research and publications. Bill was instrumental in founding the Paint Creek complexes. Coal Preparation Society of America. Of his many accomplishments the • James N. Magro will serve as senior vice president of operations-West one he may have been proudest of was his role as the chairman and U.S. Virginia North Region, including the Panther, Kanawha Eagle and representative of the International Organizing Committee for the XVI Federal complexes. International Coal Preparation Congress held in Lexington, Ky., in May • Michael D. Day will serve as senior vice president of engineering and 2010. West Virginia Central Region operations, with dual responsibilities for both the corporate engineering group and an operating region that Weir International, Inc. has appointed includes the Logan County, Corridor G, Campbell’s Creek and Blue Brady Brosnahan vice president. Creek complexes. • Lawrence J. Millburg will become vice president of operations-Kentucky SAFEmine has appointed Todd Ruff Region, including the Bluegrass, Dodge Hill and Highland complexes. business development manager-North • Terry G. Hudson will continue in his current position as vice president America. Brady Brosnahan Todd Ruff of safety and E. Kent Hartsog will continue in his current position as vice president of operations support. Pioneer Solutions, LLC has appointed Curtis J. Hanson to its senior management team. Peabody Energy recently announced Chris A. Shelton has been appointed vice president of applied technology; Allen T. Capdeboscq has been Trolex has appointed Neil McDonald international sales appointed vice president of financial and capital planning; and Amy B. director; Qinglin Li has been appointed business develop- Schwetz has been appointed vice president of investor relations. The com- ment manager, with responsibility for the development of Curtis J. Hanson pany also announced that Brendan Pearson has been appointed vice pres- business in China; and Tim Allard has been appointed key ident of federal government relations, Australia, and Michael Flannigan accounts manager. has been appointed vice president of international relations.

American Electric Power has appointed Robert P. Powers executive vice president and COO. He was previously president of AEP Utilities. David M. Feinberg has been appointed senior vice president, general counsel and secretary, with the retirement of current general counsel D. Michael Miller. Tracy A. Elich has been appointed vice president of human resources. The company also announced Michael Heyeck, senior vice president of trans- mission, has also been appointed president of Electric Transmission America, a joint venture of AEP and MidAmerican Energy Holdings Co. Scott N. Smith has been appointed senior vice president of transmission strategy and business operations. Robert W. Bradish has been promoted to vice president of grid development, and Mark Peifer has been appointed vice president and assistant to the president of Ohio Valley Electric Corp. Qinglin Li, Neil McDonald and Tim Allard.

G. William “Bill” Kalb recently passed away. Bill founded TraDet Inc. in Anvil International recently promoted Brandon Gunnell to director of mar- 1974 and was president CEO of the Wheeling-based company. In addition, keting.

16 www.coalage.com December 2011 news continued surface mine in the Tug River complex in eastern Kentucky, a move Virginia, Rhino’s third quarter met production in Central expected to further increase met coal output. Appalachia was less than in the second quarter, primarily because “We expect our 2012 met coal production will be sold at prices of the exiting of the contract miner at Grapevine. Rather than re- equal to or higher than 2011 levels,” Dave Zatezalo, president and engaging a contractor, the company purchased the new highwall CEO of the Lexington, Ky.-based company, said during a third-quar- miner. Grapevine is expected to produce about 240,000 tons a ter earnings call with analysts in November. The company entered year. into long-term sales contracts for substantially all of its projected Although Rhino Eastern’s third quarter results were similar to steam coal production at both its Hopedale and Castle Valley under- the second quarter, Zatezalo said he was “very encouraged that this ground mines in Ohio and Utah, respectively. operation is on track to improve safety, increase production and Rhino’s earnings fell in the three months ended September 30 to lower costs. We have made many changes at Rhino Eastern and I $9.8 million from $21.8 million a year earlier, although total rev- believe we have the right people and equipment in place to make enues climbed to $93.5 million compared with $85.2 million in the the operation a long-term success.” third quarter of 2010. Quarterly coal sales were flat at 1.2 million Work also began on the Remining 3 surface mine at Tug River in tons. The company went public in the United States last year. the latest quarter, with the mine expected to be in operation before Excluding results from Rhino Eastern, a joint venture between the end of the year. Remining 3 is projected to have a run rate of Rhino and Patriot Coal in Raleigh and Wyoming counties in West 375,000 tons annually.

DATELINE WASHINGTON Judgments about Governance

BY LUKE POPOVICH

Both here and abroad, the collapse of political will reforms proposed by the debt reduction commission he appointed. to discipline public spending is now complete. Recall the Simpson-Bowles commission proposed a serious solution that In this country, the congressional “super com- blended tax increases and base broadening with substantial long-term mittee” achieved nothing in its two months of exis- reductions in entitlement outlays. The White House response has been to tence. Most of its brief life was a charade of activity; say, “Thanks.” the last time the 12 members from both parties met House Budget Committee Chairman Paul Ryan (R-Wisc.) followed in private was back in October. Across the pond, EU earlier this year with a plan offering similar cuts in health care and leaders are barely a days’ ride ahead of the bond social security spending more compatible with Republican orthodoxy. market posse. They meet with the regularity of climate negotiators and But after demagogic attacks accusing Ryan of throwing the old and the are just as effective, issuing proclamations and press releases that to sick into the snow, his plan was radioactive for Republicans facing elec- date have solved nothing. tion. More recently, tentative suggestions to lower marginal rates, It’s no surprise that political paralysis now increases doubts about a broaden the tax base and bend down the curve of rising Medicare and continuing global recovery. “Markets are now starting not just to look at Social Security costs have attracted no strong leaders or sustained bi- financial statistics but to make judgments about governance,” said partisan support. World Bank President Bob Zoellick. With a major election looming ahead, the prospects for continuing And here is the problem for the U.S. mining industry that increasing- political gridlock look better than those for a robust recovery. For coal, ly relies on export markets. Last year, Europe accounted for almost half one of the few American industries that have been adding jobs despite a of all U.S. coal exports. U.S. companies fear a decline in the value of the hostile regulatory climate, Washington’s feeble response to its debt cri- Euro will bolster the dollar and make their exports costlier. Already, the sis will only deepen convictions that change is needed in this town EU’s imports from China are sinking fast as global mining CEOs say before change is all we’re left with. That’s why the NMA urges its mem- China is slowing its torrid demand for coal, minerals and metals. bers to engage the political process, call our elected critics to account The scale of the crisis in public debt was highlighted recently by the and support elected representatives who appreciate coal’s contributions. NMA’s tax counsel. Each year, say Raffaniello & Associates, our govern- At the annual Washington Coal Club banquet this fall, we heard from ment now spends almost $1 trillion more than it collects in revenue. Our one congressman who does. Rep. David McKinley of West Virginia thanked national debt approaches $15 trillion, or about $48,000 per person. For coal for its “vital contributions” despite, he said, critics in and out of gov- the typical family of four, that tab just about equates to the value of the ernment who belittle or deny them. Mike Morris, CEO of American Electric median American home. No wonder you feel like a 99%er. Global Power, had government in mind when he advised his audience: “Don’t be so lenders, who have already started cutting up Europe’s credit cards, concerned about what fuels are taking our market away; be concerned could cut our allowance too. about those who are trying to put us out of business.” If there is a solution in sight, the NMA doesn’t see it. No matter how Happy New Year, fellow 99%ers. many Americans are “rich” today, raising their taxes won’t put our fiscal Popovich is a spokesperson for the National Mining Association, the house in order. The president refuses to stand behind the bi-partisan industry’s trade group based in Washington, D.C.

18 www.coalage.com December 2011

About Pennsylvania Crusher

Pennsylvania Crusher Corporation® is a ratory tests to show how a given material will Pennsylvania Crusher offers both new parts pioneer in the design and manufacture of be reduced by a particular type of crusher. as well as remanufacturing services. crushing machinery and replacement parts. The technology involved in proper Maintaining the integrity and precision crush- Founded in 1905, Penn Crusher has been crushing involves four basic methods: ing of the equipment is done best with authen- solving the crushing problems of its cus- Impact, attrition, shear and compression. tic parts from Pennsylvania Crusher. tomers with the most advanced technology, Most crushers employ a combination of all When choosing to remanufacture equip- the highest quality machinery and unparal- of these methods. ment, the experts at Pennsylvania Crusher’s leled service for 100 years. Pennsylvania Crusher gives you the Ohio manufacturing facility have the most Pennsylvania Crusher specializes in the most choices: more than 400 crusher sizes experience and on-the-job training. Since manufacture of size reduction and feeding in 30 different models. You can rely on every rotor and cage assembly is also a com- equipment and has pioneered many basic Pennsylvania Crushers’ application engi- plex piece of precision equipment with dozens designs. Pennsylvania Crusher produces neers to select the best crusher to suit your of contact points, the fit must be right on the more types and sizes of crushers and application. mark or else the component will be prone to breakers than any other firm in the world. damage from tramp iron or premature wear. PCC crushers are used by numerous Types of Crushers basic industries such as power generation, Pennsylvania Crusher’s size reduction Industries Served mining, cement plants, food and chemical equipment consists of Bradford Breakers, Pennsylvania serves many industries and processing, the glass industry and many Impactors (both reversible and twin rotor applications including the Abrasives industry, others. In the US, most of the coal needed impactors), Sizers, Granulators, Roll Aluminum industry, Brick & tile industry, to generate electric power is crushed using Crushers (available in single roll or double Cement industry, Chemical industry, Crushed PCC crushers. roll), Clinker Crushers, Frozen Coal stone industry, Fertilizer industry, Foundry Backed by over 50 manufacturers' rep- Crackers, Hammermills, Cage Mills, Jaw industry, Glass industry, Gypsum industry, resentatives worldwide, PCC continues to Crushers and Grinding Mills. Lime industry, Mining - Anthracite coal, Mining provide the same commitment to quality With Pennsylvania Crusher’s long - Bituminous coal, Mining - Sub-bituminous products and professional service that has standing prominence in the crushing indus- coal & lignite, Petroleum industry, Power made Pennsylvania Crusher Corporation try, their staffs of engineers, manufactur- industry, Power industry - Fluid bed boilers, the most trusted name in materials reduc- ing, service, and sales professionals have Power industry - Waste fuels - Fluid bed boil- tion machinery for nearly a century. many years of application and equipment er, Steel industry, Metallurgical industry, Sand knowledge enabling them to solve the & gravel industry and Refractory industries. Crushing Technology crushing problems of their customers. Pennsylvania Crusher Corporation is part Although crushing technology is governed by of K-Tron International, Inc., a global leader simple laws of physics, it is impractical to Parts and Remanufacturing in bulk material handling equipment and ser- reduce the crusher selection process to a Improving the long term performance of your vices. A New Jersey corporation founded in series of formulas. Proper crusher selection equipment is made easier when Pennsylvania 1964, K-Tron is headquartered in Pitman, and sizing is done largely on the basis of Crusher parts are used. Because wear on New Jersey USA. K-Tron is a wholly owned experience, using field applications and labo- parts varies by equipment and usage, subsidiary of Hillenbrand, Inc. www.penncrusher.com 600 Abbot Drive, Broomall, PA 19008

Company Profile—Paid Advertisement news continued

The Access Energy underground mine in Rhino’s Deane com- is “optimistic about the expeditious approval” of amended and/or plex in eastern Kentucky began production in the third quarter with new mine permits. Mining the new reserve is probably a couple of a projected run rate of 240,000 tons annually of high quality steam years away and, when it begins, TECO expects to extract about 1.5 coal. Rhino said Access’ production will replace production from million to 2 million tons annually. depleted mines and provide a corridor to an estimated 20 million- Premier Elkhorn is headquartered near Myra in Pike County. ton expansion reserve that management believes will produce a The company operates several underground and surface mines in pulverized coal injection product starting in late 2013. Pike and Letcher counties, currently producing PCI coals, specialty In Northern Appalachia, Rhino purchased non-reserve coal stoker products and steam coal. deposits estimated to include about 2.5 million tons at its Sands Hill Meece said the reserve resulted from the company’s exploratory surface operation in Ohio in the third quarter for approximately $2.5 drilling program. “We have historically had an unwritten policy that million. The company says it has no plans to boost Sands Hill’s produc- we look below drainage for any seams that may be present,” he said. tion until prices improve. “We’re looking for something under someone else’s nose...we own a lot of property in the area.” TECO Discovers Additional Met Reserves During the search, “one hole showed a little potential, and a little TECO Coal’s new discovery of an estimated 65 million tons of “proved later on we had another with potential,” he said. Then, “We built and probable” metallurgical coal at its Premier Elkhorn subsidiary in some data in there and it showed potential for a block of coal down eastern Kentucky is eventually expected to shift the company’s pro- there. It’s a very dynamic seam down there.” duction mix to nearly two thirds met and pulverized coal with the TECO decided to step up drilling. “We worked through it last remainder low-priced steam coal sold to electric utilities. year and we went at it very hard this year,” he said. “The real accel- “For us it was a huge find,” said Bruce Meece, TECO Coal vice eration came early in 2011. That’s when we looked at the pieces and president of administrative and strategic planning. “We’re working presented it to our senior management.” toward the goal of developing the reserve at this time.” TECO first reported the discovery in an early November filing The regulatory approval process already has begun by the sub- with the U.S. Securities and Exchange Commission. sidiary of Florida-based TECO Energy, and Meece said the company MSHA to Start Using Pre-assessment Conferencing Procedures CALENDAR OF EVENTS The Mine Safety and Health Administration (MSHA) will begin implementing pre-assessment conferencing procedures in January January 18-19, 2012 16th Annual Professional Development Mine Safety Seminar for Supervisors—will be held in Allentown, Pa., at the Holiday Inn Conference Center— 2012 to help reduce any backlog of future violations before the Lehigh Valley, and Eastern Industries, Inc., Center Valley, Pa. Contact: Penn State Federal Mine Safety and Health Review Commission. Under the pro- Miner Training Program, Penn State University (Tel: 814-328-2744; Web: cedures in most MSHA districts, a mine operator and miners’ repre- www.eme.psu.edu/safetysem16/index.html). sentative may request a conference regarding a contested citation or February 2-3, 2012 12th Annual Coaltrans USA—will be held at the JW Marriott Marquis order only after MSHA proposes a penalty assessment, and any set- Hotel in Miami, Fla. Contact: Coaltrans Conferences (E-mail: coaltrans@euromoney- tlements require approval by the commission. The new procedures plc.com; Web: www.coaltrans.com). are based on the results of a pilot program launched by MSHA February 12-15, 2012 38th Annual Conference on Explosives & Blasting Technique— Assistant Secretary Joseph A. Main in August 2010 that evaluated the will be held at the Gaylord Opryland Resort in Nashville, Tenn. Contact: The International effect of the pre-assessment conference on contested citations. The Society of Explosives Engineers (Tel: 440-349-4400; Fax: 440-349-3788; Web: www.isee.org.) evaluation incorporated input from industry stakeholders, including mine operators and miners’ representatives. February 15-17, 2012 30th Anniversary World Trade & Transport Conference—will “This new conferencing process will help reduce the backlog of be held in New Orleans at the Omni Royal Orleans. Contact: Mississippi Valley Trade & Transport Council (Tel: 866-782-6882; Fax: 504-588-1441; Web: www.mvttc.com). cases that go before the commission by resolving disputes before litigation ever occurs,” said Main. “We are implementing a process February 19-22, 2012 2012 SME Annual Meeting & Exhibit—will be held in Seattle, Wash. Contact: Society for Mining, Metallurgy, and Exploration (Tel: 303-948-4200; that will provide early resolution of disputes, reduce the number E-mail: [email protected]; Web: www.smenet.org). of contested citations and orders, increase accuracy and consis- February 20-22, 2012 Annual National Weighing and Sampling Association Technical tency, and improve communication among mine operators, min- Meeting—will be held in St. Louis, Mo. Contact: Contact: David Hansel (Tel: 610- ers and MSHA.” 765-6753; E-mail: [email protected]; Web www.nwsassn.org). Each MSHA district must determine when to implement the May 1-3, 2012 Coal Prep 2012—will be held at the Lexington Convention Center in procedures based on available resources. Implementation may Lexington, Ky. Contact: Penton Business Media (Tel: 800-927-5007; Fax: 508-759- occur slowly or not at all in some districts, until other backlog 4552; E-mail: [email protected]; Web: www.coalprepshow.com). reduction strategies take hold and make the caseloads more man- July 24-26, 2012 31st International Conference on Ground Control in Mining—will be ageable. During the pilot program, operators frequently opted not held at the Lakeview Golf & Spa Resort in Morgantown, W.Va. Contact: Karen Centofanti to request pre-assessment conferences, but there was a high resolu- (Tel: 304-293-3901; E-mail: [email protected]) or Karla Vaughan (Tel: tion rate for those that did. “Although no single strategy will reduce 304-293-3886; E-mail: [email protected]); Web: icgcm.conferencea- cademy.com. the backlog of contested cases before the commission, this is one aspect of a larger plan, taking advantage of reduction opportunities September 24-26, 2012 MINExpo—will be held at the Las Vegas Convention Center where they can be found and implemented,” said Main. in Las Vegas, Nev. Contact: Hall-Erickson Inc. (Tel: 866-717-6463; E-mail: minex- [email protected]; Web: www.minexpo.com). The key findings in the evaluation of the pilot program can be found at www.msha.gov/PreAssess/PreAssessConf-Eval2011.pdf.

22 www.coalage.com December 2011

news continued

Thousands Gather for a Stop the War on Coal Rally UNITED STATES POSTAL SERVICE STATEMENT A Stop the War on Coal rally in October attracted thousands from OF OWNERSHIP, MANAGEMENT AND CIRCULATION the Commonwealth of Kentucky to the Knott County Sportsplex. “I (REQUESTER PUBLICATIONS ONLY) think it’s one of our great natural resources, and I think we ought to be proud of having coal in Kentucky and all of the jobs that it pro- 1. Publication Title: Coal Age 2. Publication Number: 10407820 vides,” said U.S. Senator Rand Paul. 3. Date of Filing: October 2011 4. Frequency of Issue: Monthly 5. No. of Issues Published Annually: 12 6. Annual Subscription Price: Controlled “For four generations, Kentucky coal put food on my family’s 7. Complete Mailing Address of Known Office of Publication table,” said Todd O’Pool, who is running for Kentucky Attorney 10 Sedgwick Drive, Englewood, CO 80113 General. Contact Person: Peter Johnson, 303-283-0640 Coal mining families came to support their basic source of 8. Complete Mailing Address of Headquarters of general Business Office of Publisher: Mining Media Inc., 10 Sedgwick Drive, Englewood, CO 80113 income and even shoveled some coal themselves. “I’m real proud of 9. Full Names and Complete Mailing Addresss of Publisher, Editor and Managing Editor: my husband and the work that he does,” said Amanda Bowling, the Publisher: Peter Johnson, 10 Sedgwick Drive, Englewood, CO 80113 wife of a coal miner. Amanda said coal allowed her family to move Editor: Steve Fiscor, 11555 Central Pkwy., Ste. 401, Jacksonville, FL 32224 back to Eastern Kentucky where she was born and raised. Coal offi- 10. Owner—Full Name and Complere Mailing Address: Peter Johnson, Mining Media Inc., 10 Sedgwick Drive, Englewood, CO 80113 cials say the only way to stop the war on coal is to stand up and be 11. Known Bondholders, Mortgages and Other Security Holders Owning or Holding heard, which is exactly what thousands did at the rally. 1 Percent or More of Total Amount of Bonds, Mortgages or Other Securities: None 12. Tax Status (For Completion by Nonprofit Organizations Authorized to Mail at Nonprofit Rates): N/A 13. Publication Title: Coal Age NLRB Judge Finds in Favor of UMWA at Willow Lake 14. Issue Data for Circulation Data Below: September 2011 Jeffrey E. Wedekind, a National Labor Relations Board (NLRB) 15. Extent and Nature of Average No. of Copies No. of Copies of Single Administrative Law Judge, ruled that objections filed by Peabody Circulation: Each Issue During Issue Published Nearest Energy subsidiary Big Ridge Coal Co. to a representation election Preceding 12 Months to Filing Date a. Total No. Copies Printed (Net Press Run) held last May were “without merit,” and further ruled that the 18,560 18,190 United Mine Workers of America (UMWA) should be certified as b. Legitimate Paid and/or Requested Distribution (By Mail and Outside the Mail) the “employees properly elected exclusive collective bargaining 1. Outside Country Paid/Requested Mail Subscriptions Stated on PS Form 354: representative.” (include recipient direct-written, telemarketing and Internet requests, paid subscriptions including nominal rate, employer requests, advertiser proof copies, and exchange copies) Wedekind also found that “by threatening employees with mine 12,977 13,014 closure, job loss and other unspecified reprisals if or because the 2. In-Country Paid/Requested Mail Subscriptions Stated on PS Form 3541 employees supported the UWMA...the employer has engaged in (include recipient direct-written, telemarketing and Internet requests, paid subscriptions including nominal rate, employer requests, advertiser proof copies, and exchange copies) unfair labor practices.” 00 “This ruling reaffirms our victory at Willow Lake,” said Cecil 3. Sales Through Dealers and Carriers, Street Vendors, Counter Sales and Other Paid or Roberts, president, UMWA. Requested Distribution Outside USPS Roberts urged Big Ridge to come to the bargaining table to begin 539 545 4. Requested Copies Distributed by Other Mail Classes Through the USPS negotiations for a collective bargaining agreement between the two 00sides. c. Total Paid/and/or Requested Distribution (Sum of 15b (1), (2), (3), and (4)) 13,516 13,559 d. Nonrequested Distribution (By Mail and Outside the Mail) U.S. Forest Service Decides in Favor of West Elk Mine 1. Outside Country Nonrequested Copies Stated on PS Form 3541 The U.S. Forest Service has consented to expanding federal leases (include sample copies, requests over 3 years old, requests induced by a premium, bulk sales, and association that Mountain Coal Co. uses to extract coal from the West Elk requests, names obtained from business directories, lists and other sources) mine, according to The Associated Press. The group WildEarth 4,022 3,639 2. In-Country Nonrequested Copies Stated on PS Form 3541 Guardians says it’s disappointed. It hasn’t said whether it will (include sample copies, requests over 3 years old, requests induced by a premium, bulk sales, and association appeal. The Forest Service decision concerns a request for the requests, names obtained from business directories, lists and other sources) Bureau of Land Management to expand the leases by about 1,700 00 3. Nonrequested Copies Distributed Through the USPS by Other Classes of Mail acres, including 1,450 acres in roadless areas. The decision doesn’t (e.g., first class mail, nonrequested copies mailed in excess of 10% limit at standard mail or package authorize any mining or road building but does say plans for those services rates) activities will be subject to any future rules on roadless areas. 00There also could be stipulations to protect lynx and scenic views. 4. Nonrequested Copies Distributed Outside the Mail (include pickup stands, trade shows. showrooms, and other sources) Agriculture Secretary Tom Vilsack is expected to decide in coming 418 377 months whether to approve Colorado’s proposal for managing e. Total Nonrequested Distribution (Sum of 15d (1), (2), (3), and (4)) roadless areas in the state. 4,440 4,016 f. Total Distribution (Sum of 15c and e) 17,956 17,575 No Pollution Problems After Coal Ash Spill g. Copies Not Distributed Despite initial claims by some environmentalists that a “catastro- 604 615 phe” had occurred, an October 31 bluff collapse that spilled an esti- h. Total (Sum of 15f and g) 18,560 18,190 mated 2,500 cubic yards of coal ash into nearby Lake Michigan i Percent Paid and/or Requested Circulation (15c divided by 15f times 100) posed no major pollution problems, according to Wisconsin offi- 75.3% 77.1% cials. Shortly after We Energies reported the incident at its Oak 16. Publication of Statement of Ownership for a Requester Publication is Required and Will be Creek coal-burning power plant near Milwaukee, environmentalists Printed in the October 2011 Issue of This Publication. 17. I Certify that All Information on This Form is True and Complete. I Understand that Anyone tried to draw a connection with the December 22, 2008, massive Furnishing False of Misleading Information or Who Omits Material or Data Requested May be Subject to Criminal and/or Civil Sanctions: Peter Johnson, Publisher, 10/26/2011 24 www.coalage.com December 2011 news continued slurry spill at the Tennessee Valley Authority’s Kingston coal plant Coal Council supported since they originally announced they in Roane County, Tenn., after an impoundment failed. That spill has would pursue it,” J. Nathan Noland, president of the coal council, led to a re-evaluation of coal ash by the U.S. Environmental said about New York-based Leucadia National Corp., the lead Protection Agency. developer. “We’re pleased and excited to have this type of tech- Most of the old coal pile that collapsed at Oak Creek did not nology come to Indiana.” make it into the lake but, instead, remained on the bank. No one The Indiana Finance Authority agreed earlier this year to buy most was injured in the incident. A month after the spill, the cleanup was of the SNG from the plant to be located about 40 miles east of almost complete. Water tests conducted by the Wisconsin Evansville, Ind. The state would sell the gas on the open market. Department of Natural Resources showed that Lake Michigan had Leucadia is negotiating an off-take agreement with Denbury Resources not been polluted by the spill. for the sale of carbon dioxide that would be produced during the coal gasification process. Denbury, headquartered in Plano, Texas, is con- Indiana Gasification Project Gets the Green Light sidering building a 700-mile-long pipeline from the Midwest to carry

Developers of the $2.65 billion Indiana Gasification project proposed CO2 to the Gulf Coast for use in enhanced oil extraction. for Spencer County, Ind., cleared a crucial hurdle in late November The project has had a polarizing effect. Backers, like Daniels, say when the Utility Regulatory Commission approved the plant’s con- Indiana Gasification will save the state’s gas customers money over struction and a 30-year contract for a state agency to purchase all of the three decades. Depending on the market price for natural gas, its synthetic natural gas output. The commission voted 3 to 0, with Indiana customers either would pay a bill surcharge or receive a two members abstaining, to endorse a controversial project strongly credit. Opponents like the Indianapolis-based Citizens Action supported by Republican Governor Mitch Daniels. Coalition consumer/environmental advocacy group predict cus- “This decision will make possible hundreds of new jobs while tomers will pay a surcharge most of the time. Citing burgeoning ensuring a long-term supply of reasonably priced natural gas which shale gas development in neighboring Ohio, Pennsylvania and oth- we will buy from Hoosiers, not foreign governments or someone else- er states, they say cheaper options exist for gas customers. where,” Daniels said in a statement. Indiana Gasification is part of the William Rosenberg, president of E3 Gasification, a project part- two-term governor’s “home grown” energy initiative launched several ner, said the project also would generate a small amount of electric- years ago. ity for sale on the wholesale market. Most of the power produced by The project is expected to create a demand for up to 4 million the project would be used in-house. tons of high-sulfur coal annually, although it is unclear if all of the Additional environmental and zoning approvals still are needed coal would be mined in Indiana. “This is a project the Indiana by Indiana Gasification. Rosenberg, however, said a final permit is McNICHOLS COMPANY

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26 www.coalage.com December 2011 news continued expected soon from the Indiana Department of Environmental rise. On November 28, the Alliance said the cost estimate now is Management. $1.65 billion, including $1.1 billion to repower the Meredosia gener- The developers still are planning to have the plant up and run- ating unit, and $550 million for the pipeline and storage site. ning in the 2015-2016 timeframe. “Contingent upon DoE’s approval, we have an opportunity to lead the entire program, build on potential cost savings, and bring Will FutureGen 2.0 Become a Reality? the power plant on-line in 2016 as planned,” said Ken Humphreys, The FutureGen Alliance, a consortium of 11 industrial partners, was CEO of the Alliance. However, the Alliance was facing a December nearing an agreement in late November to acquire an oil-fired pow- 31, 2011, deadline to submit the project’s revised plans to DoE, er plant in southern Illinois from Ameren Corp. for use in a long- which has come under fire for questionable energy loans, most delayed carbon capture and storage demonstration project, dubbed notably the $528 million it provided to bankrupt solar panel manu- FutureGen 2.0. Buying the old Meredosia plant, which St. Louis- facturer Solyndra in California. based Ameren has announced plans to close, became a necessity for While FutureGen officials and project supporters said they were the Alliance after Ameren unexpectedly withdrew from the project, confident the project will move forward, others were more skeptical. citing financial considerations. “Ever since the Mattoon site fell apart, it has been a joke,” one well- The Alliance hopes to retrofit the plant with oxy-combustion placed Illinois official who asked not to be identified said about technology and capture its carbon dioxide emissions. The CO2 FutureGen. “You’re going to buy an old plant just to prove you can would be transported via an underground pipeline more than 30 put carbon in the ground. We already know we can do that.” miles to a storage site in Morgan County. Illinois politicians continue to support FutureGen, at least out- In its early days, more than five years ago, FutureGen was billed wardly. A spokesman for Governor Pat Quinn, a Democrat, said the as a $1.8 billion, 275-megawatt, near-zero emissions project state’s chief executive “is strongly committed to bringing FutureGen planned for Mattoon, Ill. But federal funding for the project was to Illinois. The project will bring many good jobs to Illinois and put canceled in the waning days of the George W. Bush administration. our state on the international clean coal map while continuing to The Obama administration, in large part as a result of heavy lobby- promote the use of Illinois’ coal resources in ways that protect both ing by U.S. Senator Richard Durbin, an Illinois Democrat, retooled, consumers and the environment.” relocated and downsized the project. Until recently, FutureGen 2.0 was estimated to cost about $1.3 LG&E-KU Power Plant Upgrades billion, of which the Department of Energy has committed about $1 Kentucky’s two largest electric companies, Louisville Gas & Electric billion in economic stimulus funds. But the price tag continues to and Kentucky Utilities, would spend about $2.25 billion to install

December 2011 www.coalage.com 27 news continued

additional pollution control equipment on their largest coal-burn- Helmkamp Nearing Completion on Emissions Control ing power plants under a settlement reached with several parties in Projects at Dynergy Coal Power Plant November. Most of the upgrades are planned for the 2,225- megawatt Ghent and 1,717-megawatt Mill Creek plants as well as Helmkamp Construction Co. is nearing completion on its portion of a Dry Flue Gas 547-megawatt Unit 1 at the Trimble County plant. Earlier this year, a Desulfurization project to improve the quality of emissions at Dynegy’s 1,800 mw second, 750-megawatt unit went into operation at Trimble County, coal-fired Baldwin Energy Complex in Baldwin, Ill. Once the new systems come located along the Ohio River about 50 miles northeast of Louisville. online, Dynegy Baldwin’s sulfur dioxide emissions are expected to be the lowest of LG&E and KU, owned by Pennsylvania’s PPL Corp., evaluated any coal-fired units in the state. options for months before concluding the least-cost alternative is to Helmkamp is completing $45 million in civil work including site preparation and add enhanced pollution controls to comply with a slew of new and installation of foundations for baghouses and dry scrubber equipment, the special- proposed U.S. Environmental Protection Agency rules over the next ized equipment that removes sulfur dioxide from the coal plant’s exhaust flue gases. several years. For ratepayers, the decision will not be cheap. LG&E In addition, Helmkamp installed foundations for duct supports, support buildings, expects average electric bills to increase by more than 19% and KU by utility racks and silo foundations. Helmkamp also is performing all excavations for more than 12% by 2016. the required mechanical and electrical underground installations. But the improvements will help retain hundreds of jobs and pro- “Helmkamp’s performance on a project of this magnitude speaks volumes to vide a continued outlet for Kentucky coal. their dedication, integrity and professionalism,” said Dynegy Baldwin Vice The settlement sent to the Kentucky Public Service Commission President Kenneth Pollmann. Helmkamp has had a presence on the Dynegy was signed by all the parties in the case, including Attorney General Baldwin site for 13 years. Jack Conway, a Democrat who won re-election to a second, four-year The 36-month project was complex and challenging, demanding precise coordi- term in November; the Sierra Club; Natural Resources Defense nation and communications to work within the fully operational power plant on a Council; and other groups representing low-income and industrial tight site between the Dynegy Baldwin plant and Baldwin Lake. customers. Helmkamp placed more than 4,000 anchor bolts and 2,500 auger cast piles If the commission agrees with the deal, LG&E and KU “can go at 60-ft depths with no reworks. They achieved that accuracy using a Robotic forward with our environmental cost recovery,” said company Total Station and desktop software to perform layout tasks, which allowed the spokeswoman Chris Whelan. team to easily re-establish pile locations as needed later in the project. Initially, LG&E and KU also want to install more controls on Units 1 “Performing layout with conventional equipment would be too error prone for a and 2 at the 1,720-megawatt E.W. Brown power plant to capture par- project this complex,” said Rob Johnes, vice president, Helmkamp. “We use the ticulates, a project estimated to cost $225 million. But the utilities Robotic Total Station for rough excavation, foundations, locating piers and reference agreed to defer that project at the request of the environmental groups. points for anchor bolts and underground piping, and for offset work.” “It’s a give and take and that’s one of the things the environmen- The project required approximately 30,000 cubic yards of concrete, much of it tal groups wanted,” Whelan said. “We have no plans to abandon poured during two cold, snowy and icy winters. The largest single concrete pour was coal and we think those units are viable. All they need are retrofits.” for the lime storage and waste ash silo foundation, in which three concrete pump The Brown project delay, she added, “gives us more time to look at trucks simultaneously poured a total 2,200 cubic yards of concrete in a limited the [EPA] regulations.” access area. The second largest pour was approximately 1,300 cubic yards. The PSC was expected to rule on the settlement before Numerous underground obstructions not shown on the drawings were located Christmas. and identified during many of the projects excavations. These and other related issues were quickly resolved to keep the project on schedule and within budget. Kentucky Power to Invest Nearly $1 Billion Helmkamp performed 280,000 man-hours on the project with only one record- at Big Sandy Plant able incident. In 2008, Helmkamp received a zero injuries award from the National Kentucky Power Co. announced plans to invest approximately $940 Maintenance Agreements Policy Committee for 57,321 injury-free self-performed million in its Big Sandy Power Plant near Louisa to meet increasingly man-hours on the Dynegy Baldwin job. Helmkamp received this same award from the stringent federal EPA environmental regulations. The investment is National Maintenance Agreements Policy Committee for 102,800 injury free work needed to construct a dry flue gas desulfurization (DFGD) or “scrub- hours for the 2009 calendar year. ber” system on the plant’s 800-megawatt electricity generation unit. The current plan for the plant’s other generating unit (the older of the two; rated at 278 megawatts) is to retire it at the end of 2014. However, the company is continuing to evaluate alternative options. The announcement followed a formal filing of an Application for a Certificate of Public Convenience and Necessity before the Kentucky Public Service Commission which must approve the project and investment. The case seeks to recover the costs—which won’t be col- lected from customers until after the system is operational (sometime in 2016)—associated with building the DFGD system from Kentucky Power’s ratepayers. If approved, a Kentucky Power residential cus- Helmkamp Construction is nearing completion on its portion of a Dry Flue Gas Desulfurization tomer using 1,000 kilowatt hours per month would see an increase on project to improve the quality of emissions at Dynergy’s 1,800 mw coal-fired Baldwin Energy his/her bill of approximately $31/month, or about 31%. Currently, that Complex. customer pays about $98/month and after the increase would pay approximately $129/month.

28 www.coalage.com December 2011 news continued

“Kentucky Power looked long and hard at the best way to meet its environmental obligations at Big Sandy Plant and after much Alpha Celebrates Grand Opening of New study and analysis, the scrubber system emerged as our least-cost Corporate Headquarters option,” said Greg Pauley, president and COO, Kentucky Power. “By investing in the plant and the new scrubber system, we will be able to comply with environmental regulations as well as retain local jobs. It will also enable Big Sandy Plant to continue burning millions of tons of coal each year and ensure that Kentucky Power remains a large part of the area’s economy for years to come.” If approved by the Commission, the DFGD project should be completed sometime in 2016. The company estimates that as many as 700 jobs will be created during the construction period, most of which will be directly used in building the DFGD system. Those jobs will have a direct, positive impact on the local and regional A group of 14 coal miners cut a “ribbon” of miners’ belts to signify the opening of the building. economies over the course of the next few years. Alpha Natural Resources officially opened its new corporate headquarters facility in Senate Introduces the Fair Compliance Act: Bristol, Va. The five-story, 130,000-square-foot building is located on 30 acres in the A More Realistic EPA Regulation Timeline Sugar Hollow Business Complex. Virginia Governor Robert McDonnell and other state The Fair Compliance Act of 2011 (Senate Bill1833) was introduced and local dignitaries joined Alpha employees for a ribbon-cutting ceremony. A group of recently with bipartisan support by Sens. Joe Manchin (WV-D) and 14 coal miners cut a “ribbon” of miners’ belts to signify the opening of the building. Dan Coats (IN-R), Additional cosponsors include Sens. Bob Corker “We are thrilled to be moving into a wonderful, state-of-the-art space in the same (R-TN-R) and Ben Nelson (NE -D). This bill and the TRAIN Act area of Southwest Virginia where we began the business in 2002,” said Kevin passed earlier this year by the House would help protect electricity Crutchfield, CEO, Alpha Natural Resources. “In less than 10 years, Alpha has grown consumers from the risk of power shortages and extreme price from a concept on a piece of paper to the world’s fifth largest coal supplier. From a increases from overly aggressive EPA regulations. handful of original employees in the area, we now have approximately 325 who are The “Fair Compliance Act” would give power companies a more moving into this state-of-the-art facility. We are grateful for the outstanding partner- realistic timeframe for compliance with the Cross State Air Pollution ships we have with city, county and state leaders, whose support and commitment Rule (CSAPR) and the Utility MACT Rule, which have been identi- made today’s event happen. This is a proud moment for Alpha.” fied as key elements of the Train Wreck of burdensome and unnec- The energy efficient building has been registered with the U.S. Green Building essary regulations. Council for LEED (Leadership in Energy and Environmental Design) certification for In February 2011, the American Legislative Exchange Council commercial interiors. Alpha worked closely with local architect Thompson & Litton, (ALEC) published EPA’s Regulatory Train Wreck: Strategies for State and general contractor, BurWil Construction Co., to create a building with numer- Legislators, which helped engage policymakers on the EPA’s most hos- ous energy efficiency features that exemplify its commitment to sustainable energy tile regulatory assaults on energy affordability and reliability. Recently, practices. ALEC published its first in a series of policy guides on the coming EPA At the event Alpha announced a donation that will help complete Sugar Hollow regulations. The Cross State Air Pollution Rule, one of the more oner- Park’s Resting Tree Trail. The trail will link the historic Resting Tree Cemetery to the ous of the EPA rules, will be addressed by the “Fair Compliance Act.” park’s existing sidewalk path and Alpha’s new headquarters. The trail will also be “The bill does not change the stringency or reduction levels of any enhanced with benches and new picnic tables. EPA regulations,” said Todd Wynn, ALEC’s Energy, Environment and In August, Alpha agreed to partner with the Holston River Soil and Water Agriculture Task Force Director. “But it would help to minimize the Conservation District to fund the completion of Phase II of the Beaver Creek Stream damage of the train wreck that will happen if the regulations pile onto Restoration Project in Sugar Hollow Park. The goal for Phase II is to restore 1,000 linear American consumers and manufacturing companies too fast.” feet of Beaver Creek, which will result in improved water quality through natural Affordable and reliable electricity is the lifeblood of the stream channel design methods and the restoration of vegetative buffers. The Phase II American economy, and the “Fair Compliance Act” helps lessen the location also will serve as a demonstration/educational site. burden of two of the most damaging EPA rules. The bill addresses deep concerns voiced by utility regulators and grid operators about the impact of planned power plant closures if the EPA timelines are not changed. The bill also synchronizes the deadlines for the two rules and would require utilities to submit implementation plans on how their emission reductions will be made. This would allow the U.S. Department of Energy and reliability organizations to coordinate plant retirements and technology retrofits so power shortages will not occur. ALEC’s EPA’s Regulatory Trainwreck: Strategies for State Alpha Natural Resources officially opened its new corporate headquarters facility in Bristol, Legislators is available at www.regulatorytrainwreck.com. ALEC’s Va. The five-story 130,000-square-foot building is located on 30 acres in the Sugar Hollow Business Complex. Cross State Air Pollution Rule Policy Guide is available at www.alec.org/AM/Template.cfm?Section=Cross_State_Pollution.

December 2011 www.coalage.com 29 transport tips Coal Dust Control—Arkansas Electric Petition for Declaratory Order

BY DAVID GAMBREL

This is a continuation of the coal dust saga What WCTL Sought from the STB derail. FRA has recommended prosecution begun in the December 2010 and continued Specifically, the Petition asked three things of BNSF for civil penalties for failure to com- in the May 2011 issues of Coal Age. The saga of the STB: (1) reopen the record on the coal ply with CWR (Continuous Welded Rail) centers around coal transported by rail out of dust tariff; (2) order STB-supervised media- procedures: not noting required informa- the Powder River Basin (PRB) of Wyoming, tion, and (3) stay or enjoin the Revised Coal tion on the web of the rail as required,” and and is focused on an attempt by Burlington Dust Tariff. In its response to the Petition, noted, “The BNSF track inspector had Northern Santa Fe (BNSF) to set in place a BNSF opposed all three. Even though BNSF inspected this area on May 12, 2005, and procedure for controlling coal dust blown seeks to have shippers pay every dime of noted no defects in the derailment area.” from the tops of open top hoppers. Some cost for rectifying their coal dust problem, it While the UP derailment was reported shippers argue BNSF wants to make coal has consistently refused to enter into any by BNSF, no FRA record of BNSF’s 15-car shippers pay the entire cost of prevention. meaningful dialogue with shippers con- derailment can be found. When the Publicly-available information does nothing cerning the development of the coal dust Department of Energy wrote about the to refute this belief. Forcing coal shippers to tariffs. This lordly approach to a business derailment two years later, there was no have their loads sprayed with surfactant will relationship with major coal customers has mention of BNSF’s CWR compliance fail- no doubt result in less coal dust in the kept many shippers upset, and is probably ure. The “damaged track” was attributed to roadbed, and that will result in longer inter- responsible for prolonging a solution that the accumulation of coal dust in the Joint vals between undercutting. That will reduce all parties can accept. Line roadbed from the point of derailment the cost of track maintenance, and shippers WCTL believes the costs and benefits of at Reno Junction to Bill, Wyo., a distance of will pay for that reduction if BNSF continues coal dust mitigation should be shared fairly 18 miles. The broken piece of railroad track on their current path. between BNSF and its PRB shippers. They reported by an FRA inspector had somehow believe shippers should be afforded access to become 18 miles of coal-dust-choked Petition for Declaratory Order BNSF’s coal dust mitigation studies, proce- roadbed. The cause of the derailments was On August 12, 2011, the Western Coal Traffic dures and data before being asked to incur therefore switched from a railroad responsi- League (WCTL) on behalf of the Arkansas expense and liability based on those studies, bility to a shipper responsibility. Electric Cooperative Corp., filed a Petition to they should be told what penalties BNSF will Reopen and for Injunctive Relief Pending impose for failing to meet any approved coal Changing the Subject Board-Supervised Mediation with the dust standards, and they should not be held It was clear from the FRA report that the UP Surface Transportation Board (STB). Filings liable for any damages resulting from the use derailment was caused by a broken piece of of support were made by NCTA, APPA, NRE- of these standards. It seems like they have a CWR, and it is crystal clear the FRA held CA, EEI and CURE. At issue was the so-called pretty reasonable set of requests. BNSF responsible for the break. The report “Revised Coal Dust Tariff,” which refers to said nothing about coal dust in the ballast, Item 100 of BNSF’s Price List 6041-B, pub- The Facts As We Know Them nor did it imply the problem was caused by a lished July 20, 2011. Having found BNSF’s Let us for the moment travel back in time to weakened road bed. Still, when BNSF report- initial attempt (Price List 6041-A) to force May 2005. For several weeks heavy snow and ed to its stockholders the following month coal dust rules on PRB coal shippers unrea- rain had seriously affected rail and mining (Form 10-Q, June 2005), the cause of the sonable, the STB strongly urged BNSF to operations in the PRB. On May 14, a BNSF derailment was reported as “the long-term work cooperatively with coal shippers to find train derailed 15 cars at MP 75.3 on Main accumulation of coal dust on this trackage a reasonable substitute. It did not. Line 1 headed eastward. On May 15, a Union which caused the ballast section to retain Instead, BNSF forged ahead on its own Pacific (UP) train, also heading eastward on water and compromise track stability.” No and published Price List 6041-B, which Main Line 1, derailed 29 cars of a 130 car mention was made of the BNSF “failure to WCTL deems an unreasonable practice loaded train. The UP derailment was about comply with CWR procedures.” because (a) it fails to inform coal shippers of one mile east of NACCO junction, the Reviewing the rather sparse public record the penalties they face if they fail to comply turnout to the North Antelope and Rochelle one wonders how BNSF’s failure to comply with its terms, (b) all compliance costs are mines. Basically, it had just left the coal mine. with CWR procedures morphed into a dust placed on coal shippers, (c) all liability for use Reporting on his inspection of the UP control amendment to BNSF’s coal tariff. of BNSF-mandated surfactants is placed on derailment, a Federal Railroad Administra- One wonders how BNSF succeeded in get- coal shippers, and (d) the tariff cannot be tion (FRA) inspector concluded, “A break in ting the STB and the entire PRB coal industry lawfully applied to UP shipments. WCTL the rail at a rail joint at the point of derail- focused on coal dust while they said nothing claimed shippers were not given access to ment ran 11 inches from a bolt hole to a about FRA’s allegation of failure to comply the results and procedures underlying the field weld and then broke upward through with CWR procedures. During the STB pro- revised tariff compliance terms, and avail- the ball of the rail. The break allowed a por- ceedings BNSF insisted so much of its able materials concerning these results and tion of the rail to dislodge and caused the records be kept secret that one has no choice procedures are fatally flawed. wheels of the 63rd head car in the train to but to wonder what they contain. The facts

30 www.coalage.com December 2011 transport tips continued are simply not known, and it appears BNSF is in a hurry to act without allowing them to become known. Why? One has to wonder why the trucking industry, under the regulations of the Federal Motor Carrier Safety Administration, must cover (tarp) their loads at their own expense, but their railroad competitors are well on their way to forcing their shippers to pay for controlling coal dust from trains. It would seem there are serious inconsistencies with- in the rail and trucking jurisdictions of the STB, or within the branches of Congress that regulate transportation.

Moving On No one argues that coal dust is not a prob- lem. From the shippers’ point of view the argument is over who should pay for the solution. In the collective mind of BNSF and perhaps other railroads it undoubtedly goes deeper. The railroad is their demesne, sacred ground upon which none may tread without permission. They will speak about it to no one who has not signed a contract, even though it may be to their own benefit in the long run to do so. Shippers may not like it, but BNSF has done business this way for decades, and are not likely to change soon. WCTL had argued that reopening the coal dust case was appropriate because BNSF was not collaborative in developing the new tariff in violation of the March 2011 decision. While the Board had sought and even encouraged consensual resolution of disputes, their prior decision did not impose upon BNSF a regulatory obligation to consult with its shippers prior to issuing a new coal tariff dealing with coal dust suppression. Railroad industry watchers would have been happily shocked if BNSF had offered to nego- tiate with shippers a solution to the coal dust problem, but it surprised no one when they elected to choose the dictatorial route. In a decision served November 22, 2011, the Board denied WCTL’s request to reopen the proceeding in Docket 35305 and to insti- tute mediation between BNSF and coal shippers regarding the BNSF new coal dust tariff. However, the Board will institute a new proceeding to consider the reasonable- ness of the tariff’s “safe harbor” provision. This new declaratory order proceeding is titled “Reasonableness of BNSF Railway Company Coal Dust Mitigation Tariff Provisions,” Docket No. FD35557. WCTL and BNSF were directed to file a proposed procedural schedule by December 12, 2011.

Dave Gambrel is a private consultant to the coal transportation industry. He may be reached at [email protected].

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The 100th Anniversary National Mine Rescue Contest Returns to Columbus Sponsored by MSHA, 103 mine rescue teams from 13 states compete

BY LEE BUCHSBAUM, ASSOCIATE EDITOR AND PHOTOGRAPHER

problem as quickly as possible with the least amount of docks as possible. For the contest to be effective, the field and problems were designed to approxi- mate what teams would encounter in a real emergency situation including gas, smoke, fire, injured people and dead bod- ies. It was each team’s responsibility to map everything they saw and report it back to their respective fresh air bases. Upon completion of the course, the team’s map was reviewed along with their actions in the simulated underground environment. The team with the lowest point total dock as well as the fastest time would win the competition.

Not Real World, But Still Miners from Alpha Natural Resources’ Cumberland Mine Rescue Team, one of 103 teams competing in the National Mine Real World Training Rescue Contest, on the field at the Greater Columbus Convention Center in October. Though very different from real world conditions, each team worked tirelessly to take home the prize. “When they start the Thousands of coal miners from more than The contest consisted of several clock and a team starts competing, it’s 100 mine rescue teams gathered in events. In the field competition, teams almost like a real emergency to them. As Columbus, Ohio, from October 3-6 as the solved a hypothetical mine emergency you see them get into the problem, you city hosted the 2011 National Mine problem while judges rated them on how see how seriously they take it,” said Rescue, First Aid, Bench and Pre-shift well they adhered to mine rescue proce- Stricklin. During competition, each team Competition. Organized and adminis- dures and how quickly they completed member donned almost 45 lb of equip- tered by Mine Safety and Health specific tasks. Other events included a ment as they negotiated their respective Administration (MSHA), mine rescue bench contest in which individuals who tasks. Before their competition time on teams gathered at the Greater Columbus maintain rescue equipment must thor- the field, each team was kept in seques- Convention Center to hone techniques oughly inspect breathing devices that tration so as not to contaminate the exer- they hope they will never have to use. In have been tampered with and quickly cor- cise. During the contest, team members total, 103 mine rescue teams hailing from rect defects. In the first-aid contest, par- ran through a maze-like course, looking Alabama, Colorado, Illinois, Indiana, ticipants were judged by how well they for obstacles and performing simulated Kentucky, Maryland, New Mexico, Ohio, demonstrated the correct method of car- first aid and rescue of any and all located Pennsylvania, Utah, Virginia, West ing for an injured miner. In the pre-shift miners all the while making constant Virginia and Wyoming competed in the competition, miners examined the mine reports back to base. biennial event. The last time the competi- layout area before their work shift to iden- Under contest rules, if a team member tion was held in Columbus was in 1951. tify and eliminate existing hazards. enters under smoke they need to be con- “The critical importance of mine res- “A lot of time and effort has been nected to a lifeline. “You have to make gas, cue teams was underscored with last invested to challenge the mine rescue roof and rib checks at certain locations. year’s tragedy at the Upper Big Branch teams—to get them to think,” said Kevin These guys have really been schooled in mine,” said Joseph A. Main, assistant sec- Stricklin, MSHA’s coal administrator. The the techniques as have the judges. It retary of labor for mine safety and health. giant convention center’s main floor was becomes harder every year to judge each “Having been at the scene of too many split into more than a dozen identical mine team because they just continue to get bet- mining accidents, I know firsthand the rescue competition fields. Each sectioned ter and better. I’m very confident that there need for well-trained and experienced off concrete “field,” which had three desig- will be a number of teams that have zero mine rescue teams. I have the highest nated entries and cross cuts, was divided docks,” said Stricklin. That means they respect for these men and women, and up by ropes to simulate underground have zero errors on the field and the judges am deeply grateful for their sacrifices.” entries. All teams worked through the same are trained to spot those errors and find

34 www.coalage.com December 2011 mine rescue continued

Main Talks about Mine Rescue with Coal Age

Mine Safety and Health Administration (MSHA) an agency that, like the overall coal industry, had an Many of the programs now are aimed at really Director Joe Main took a few minutes from his busy aged work force. There was a huge transition that trying to get a handle on the problem mines that we schedule to talk about mine rescue and other issues took place after the UBB disaster once MSHA real- have within the industry. We’ve been very strategic at the National Mine Rescue Contest, held during ized it needed more people. Congress reacted and and very focused on how we try to identify those October 2011 in Columbus, Ohio. added a large number of inspection positions. At the mines and take action. We need to prevent advance same time, you had a lot of folks retiring from the notice to preclude quality inspection. At the same This rescue contest comes during a moment when industry. The day I took this job, half the inspectors time we’ve done a tremendous amount of outreach the industry is in transition and under tremendous that worked for MSHA had two years or less experi- and education within the industry to make sure governmental scrutiny. How safe is the industry ence. You have to keep an agency like this staffed they’re fully aware of what the expectations are and today and how prepared are we to deal with future up if you expect to have consistency. So after being to encourage them to have programs and processes situations? criticized that MSHA wasn’t enforcing the existing in place. laws, we went through a period where we brought a Main: As little as 10 years ago, mine rescue stan- lot of new inspectors into the field. The expectation Regarding the UBB disaster, with Massey no longer dards had become very weak. Teams had been for MSHA was to get tougher and the agency has part of the industry, there has been a tremendous reduced to such low strength that there was a con- done that. retraining program at Alpha. Are you satisfied with cern about whether we had really lost the ability to As inspectors, we’ve spent a lot of time looking how those former Massey folks are being retrained? perform mine rescue. So for the 100th anniversary, I back at how well we perform our jobs. We are looking Is that a model program? think all of us are pleased about where we are now, to maintain consistency in what we do. I meet with though we still have a ways to go. We’ve got to hold our district managers every time I get a chance. I Main: If you went back to April 4, there’s a lesson we what we have and build off of that. We can’t let it came from the old school of thinking that when we learned: do not take things for granted. The proof is slip back again. This country and the mining indus- had inspections, we all talked to each other. We in the pudding and if mines are operating better, try has to make the investments necessary in mine were almost always given an explanation of what their record and the results tend to reflect that. Over rescue if we intend to be able to take care of events the violation was. That’s something I believe in and time we hope to see progress. Right after [the] UBB if they occur. talk about within the agency. I think we owe miners [disaster], I looked at Kevin [Stricklin] and told him The [Mine Improvement and Emergency and the producers they work for an explanation for ‘to ensure that we’re never going to have another Response] MINER Act of 2006 was a real catalyst for the actions we take. We also need to take a bit of Upper Big Branch, we’re going to look hard to figure where we are today. Since then, I’ve had the oppor- time to educate and explain our actions. That helps out where the next one could be and start dealing tunity to work on mine rescue training and to help communication and fosters a better understanding with that now.’ We put together a program that develop training facilities and programs. Some of of why the regulations we enforce are so important. helps us identify certain characteristics that could the programs implemented by Don King, a retired In terms of how we interact with the mining constitute potentials for another disaster. There miner who is now our miner training consultant at industry, there are two places that this occurs. One were 57 mines listed on the first report. the Mine Safety and Health Administration’s (MSHA) is during the inspection, and the second is during National Mine Health and Safety Academy in Beaver, the close out. We all need to get back to a point Is there a model out there? W.Va., and others have really helped to bring the where we’re actually talking about the conditions mine rescue programs back to where they are today. and have discussions about that. When there is a Main: Is there one single company that has every- When the Upper Big Branch (UBB) tragedy hit, violation, there’s opportunity for improvement for thing right? Probably not. But there are ones out had it not been for the MINER Act and the kind of the company and the miners. At the close out, every- there that have it right in terms of having programs training that King’s programs and others had in body sits down and walks through all the violations in place to get there. helping prepare the rescue teams that responded, we identify. I’ve increased my focus to explain more How a company reacts to receiving violations or we would not have had the benefit of having the about what we’re doing and why. I’ve encouraged receiving notice that there is a pattern of violations quality of mine rescue that we had. We had teams people to put their issues on the table. And if we can really tells you a lot about their character. ‘We’re fix- on the ground there whose training was far superior sort out differences with facts, that’s the place to do ing things and we’re going to be a better mine;’ or to what had been available around the time of the it. This will lead to better communication as well as ‘We’re going to fight you to the last straw.’ MSHA is Sago disaster. All that training and preparation less controversy over the violations that were issued. trying to be very careful and strategic about how we helped us get the mission accomplished. The day However, a problem that we’re dealing with is the identify which mine is which and how to work with that we think we no longer need these teams is the huge backlog of cases. The day that I took this job, all of them. day we make the biggest mistake of our lives. You we were sitting on about 80,000 contested viola- CONSOL Energy is one company that has really never know how many teams you’ll need, where tions. We have been working with Congress to get changed its procedures to deal with compliance you’re going to need them, and what the conditions more money and resources because our analysts are issues. They have stepped up to the plate to work on will be once they are deployed. So we have to have totally tied up trying to work through this backlog. technological changes in the mining industry. They everyone prepared and trained up and ready to go at With the right papers, we can defend these contests. have proximity detection systems on much of their a moment’s notice. Inspectors must write a good paper at the outset sectional equipment. The work they are doing with One of the other challenges MSHA has faced is and make sure they have their facts together so we them is very helpful both to them and the rest of the that over the years the agency got short on people. can make better cases for these violations. At the mining community. At the time of the Sago mine disaster, MSHA lacked same time, if there is a difference in facts, lets sort Another company, Alliance [Resource Partners], the strength it needed to get its job done. This was those out on the front end, not in the courthouse. at one point had about 30 of their continuous min-

Continued on Page 38...

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36 www.coalage.com December 2011 mine rescue continued any issues a team might have. Teams also ed, team captains would head over to the take a written exam and are judged by how contest clock and, upon the judge’s sig- well they populate a map. nal, stop it and mark the time. Individual But in the end, it all comes down to competitions were even more grueling time. “The judges work really hard to try since there was no one else to rely on. to find something they can dock. They are While waiting for results, hundreds of coal very critical. We put judges on the field miners roamed the area, shared ideas and from different areas than where the coal reviewed some of the latest mine safety mine is situated. If the team on this field innovations. is from Indiana. If the team on this field is Displaying some of the newest prod- from Indiana, there are no judges on the ucts in mine safety and rescue, one of the field from Indiana. We try to make sure to biggest sponsors of the event, Draeger keep it as squeaky clean as we can so Safety was on hand celebrating both its there’s no favoritism to any of the teams. 100-year anniversary of mine rescue con- We work really hard at that and the judges tests and the company’s own century of do a good job but the teams do an even involvement in this vital field (see side- better job,” said Stricklin. bar). The company developed the first Though the situation wasn’t real, the closed-circuit breathing apparatus in sweat pouring off the mine rescuers was. 1904, opening a new era in mine safety “While each is miner, collectively they Kevin Stricklin (left), MSHA’s coal administrator and Joe and rescue. “Times change, but values do become members of rescue teams. When Main, asst. secretary of labor for mine safety and health not. The values we have shared for 100 everyone else is running away from an and MSHA director at the National Mine Rescue Contest. years will continue through the next cen- emergency, these folks are gearing up to tury of mine rescue and safety. And, we go and fight it. There’s never a good emer- will be there to help provide the products gency and these noble men and women field to another as they raced to solve and assistance we can to these brave men are determined to go into harm’s way to problems. Audience members watched and women, these Draegermen,” said try to rescue people,” said Stricklin. from the stands as teams would locate Stefan Draeger, chairman of the manage- During the competition, team mem- “injured” miners and bring them out to ment board for Draeger International and bers would rush from one section of the fresh air bases. Once tasks were complet- a direct descendent of the original inven-

Continued from Page 35... ers equipped with proximity detection equipment miners killed since 1984 due to proximity issues. industry today is much better than when I started. as well. They really took the lead on this—even Today there are new technologies that we’ve applied You can go to our website [www.MSHA.gov] and before there were regulations. The experiences they to fix that. see which mines are the safest. We now have the had, and the experiences CONSOL Energy is hav- The pattern of violations program has been ability to breakdown the accident, injury and com- ing, are going to help us get the bugs worked out of controversial in many ways because no single pliance history of every mine that we inspect. the system. mine ever met the standards that were intended The pattern of violations program is one of the by Congress, or the standard was not applied in a things helping to alert people. We need to let folks If you talk to the average coal miner today, they feel way Congress had intended. We needed to sit back know what we expect them to do. When we did the like they are being hit by a blizzard of rules, not just and look at what Congress said and implement a potential pattern of violations criteria under the from MSHA but through the various agencies in this program of enforcement. Our proposed rules are current rule, one thing we did was post all of the administration. What’s the future of mining in this going through the public process. Anyone who criteria on the website so every mine operator country? attended or paid attention to any of the eight knows what the rules would be and are currently. Congressional hearings that I’ve been through Then we created the potential pattern of violations Main: I believe it is a vital part of this country’s would realize that this issue is something screen tool where any miner can go on our website, future. My mission is to do everything I can to make Congress expects to fix. They weren’t satisfied plug in the ID number of that mine, and find out it safe. I took this job for a simple reason, to give with the status quo. Last year there were about every day how they stack up against the potential miners a chance to go home free of injury and ill- 172,000 violations issued by MSHA. About 80,000 pattern of violations criteria. So now a miner look- ness and enjoy life like most other folks do. I believe of those citations were issued at coal operations. ing for work can research various mines and that’s an achievable goal. Enforcing these regula- But coal only represent 3.5% of the mining popu- decide for themselves how much risk they want to tions is critical. There are still some large problems lation. If you look where the injuries or deaths are take. This screening tool gives them that much out there, in particular where it comes to black lung. most prevalent, it’s in underground coal mines. If more control over their own destiny. Younger miners are still getting the disease. When you look at where most of the violations are issued, we looked at data from the autopsies of the men and where we find the greatest lack of compli- Yes, but given the pressure coming down from your who were killed at Upper Big Branch, we found that ance, it’s in underground coal mines. administration, what role will coal play going for- more than 70% of them had some level of black ward? Editor’s Note: At this point, Main asked to stop lung already. We need to fix that. When you talk to young people about the industry, is recording. His answer though was unforgettable. The proximity rules will start another round of re- mining a career you suggest that they pursue? investment to take care of our miners and protect Main: Though coal is extremely important, market workers. If we don’t do this we’re going to continue Main: I started in the mining industry when I was forces will determine the future of the industry. But to crush and kill these people. We’ve seen almost 40 18 years old. And I can happily say that the mining there’s an awful lot of natural gas coming online.

38 www.coalage.com December 2011 mine rescue continued

Draeger Celebrates A Century of Mine Rescue

escape. “The units can be combined with a second technology that we and only we have, which is a compressed air apparatus, similar to what is used in fire brigades, that can be recharged at charge stations,” said Draeger. To recharge the new SCBA units, one hooks them up to an air supply with several large cylinders stored in a preconfigured charge air station. In case of an emergency if the tube reaches the station, then they are refilled from other large cylinders in that station. Then a responder can use a quick recharge to get enough air to move to the next sta- tion where they can once again refill. “So you can go quite a distance in quite a time, basically technical- ly unlimited time and distance, with intermittent refills,” said Draeger. The company claims the units can be recharged in less than a minute. Additionally, the charging stations are mobile. “You can move them as the layout of the mine The old and the new: Draeger has played a vital role in mine rescue for over a century. changes,” said Draeger. The company is also building and designing new refuge chambers that For over five generations and proudly spanning a At the mine rescue contest, the company pre- are designed to keep miners safe until the mine century, Draeger has been directly involved in sav- viewed the new Oxy K 6000 self-contained rescue rescue response come to help. ing lives. The company has a U.S. operations system (SCSR) that will be launched in the U.S. in Draeger is also developing new portable gas headquarters in Pittsburgh and employs more 2012. Through a chemical reaction, these units detection equipment. Using the patented than 200 people nationwide. deliver more than 60 minutes of oxygen with a low DragerSensors, a rull range of portable gas detec- Similar to many companies, Draeger’s success breathing resistance. They automatically start to tors measures and warns against toxic gasses. began almost accidentally. In 1889, Johann Heinrich perform when opened and donned. Respiratory filters provide reliable protection Draeger, a German clock maker and tinkerer who The company also showcased a new 30 and 60- against particles and dust. The new X-am 5000, serviced, repaired and sold clocks and sewing minute state-of-the-art ChargeAir self-contained which was recently approved for use by MSHA, pro- machines, created a design for the very first CO2 breathing apparatuses (SCBA) units. Part of a vides critical environmental monitoring in under- pressure reducer for beer taps—beer being a fun- custom underground SCBA refill system, the units ground conditions. damental part of German heritage. His next techni- are not exchanged during an escape when visibili- The company showed off the Draeger UCF 7000 cal challenge was to enable the pressure reducer to ty is minimal and the atmosphere is toxic. The thermal imagining camera. Designed for miners, work for oxygen. In 1902, he was reading about a lightweight units are instead recharged while rescue teams, firefighters and other responders, horrible coal mine disaster in Pennsylvania when being worn so that rescuers can continue to the new camera has high optical resolution and is the idea came to him that his experiments could be breathe clean air and work in toxic atmospheres. intrinsically safe in the toughest of conditions. It applied to the new field of mine rescue equipment. Safety and reliability are improved because the gives value in day to day operations. When the first mine rescue competition was held in units no longer have to be exchanged during an Draeger also has a line of escape and refuge Pittsburgh in 1911, Draeger was there working to chambers. Activated by an alarm during emergen- support the community. cies, these chambers can serve as an intermedi- Draeger has since emerged as a leader in mine ate station for escapees for up to eight hours. The rescue technology and the company has also chamber includes communication facilities and helped foster a legion of devoted “Draegermen” can be configured to provide access to protective who are dedicated to saving the lives of their fel- equipment. low coal miners. “We are very, very proud to be For the entirety of the contest, a “museum” associated with these brave people,” said Stefan was set up in a large conference room filled with Draeger, the great-great grandson of the compa- dozens of types of historical mine rescue tools and ny’s founder. “In many ways, the existence of the gear showcasing the evolution of this vital field. Draeger man or mine safety profession was Many of the products there were made by Draeger. enabled through our devices. We are honored to “Looking around this room, it is very interesting to have such long relationship with them.” see the evolution of this industry, especially know- One of the overall concepts for much of ing how much this company has been involved in Draeger’s products is the notion of creating tech- Draeger’s new ChargeAir self-contained breathing it. Our commitment to mine safety is unwavering. nology for life. “Almost all of our products come in apparatuses can be recharged in less than a minute at Myself and the rest of the company happily look one of the company’s ChargeAir Stations, just one of situations you normally don’t want to be in, when many devices displayed by Draeger. forward to being an important part of the next 100 life is at stake,” said Draeger. years of mine rescue as well,” said Draeger.

December 2011 www.coalage.com 39 mine rescue continued

Mine Rescue Has Come a Long Way Since 2006, mine rescue training has become much more stringent as safety standards have increased. The Mine Improvement and New Emergency Response (MINER) Act of 2006 regulations required more mine rescue teams and more training by existing teams. “Some of the good things that came out of Darby, Sago and Aracoma were the number of teams and the awareness that you had to be better prepared for an emergency situa- tion. Now we have ensured that rescue teams are ready to go in a minute’s notice. We saw that at Upper Big Branch. Though the explo- sion happened somewhere around 3 p.m., by midnight mine rescue teams from all over the region had already found 25 of the 29 bodies,” said Stricklin. “There were four unaccounted for. One was bypassed, and the other three were very close to where we pulled them out of the mine because of From PacifiCorp’s Jim Bridger mine near Rock Springs, Wyo., Bridger Coal’s “Blue” Mine Rescue Team competes at the explosions. The speed of response and the National Competion. teams’ abilities to find those fallen heroes proves how meticulously those rescuers worked. It was a very bad situation that we tor of the closed-circuit breathing appara- cy response plan and capabilities of were able to get on top of in a way we proba- tus. Draeger showcased several of its lat- underground teams. The company also bly couldn’t only a few years ago.” est safety and rescue products including previewed its newest self-contained res- Kevin Vaughn, a mine rescue team the state-of-the-art ChargeAir System, a cue system (SCSR), the Oxy 6000, which leader from Alliance Resources’ River system designed to enhance the emergen- will be launched in the U.S. next year. View mine in western Kentucky, who has

Samson High Performance Ropes For well over 100 years, Samson has been recognized as a worldwide partners by conducting research and on-site sur- leader in the development and manufacture of high-performance veys to gain greater insight and confirm the best suit- ropes. Among its many innovations, Samson invented the dou- able products for each mining application. ble braid and pioneered the first high modulus polyethylene fiber ropes. Today, Samson engineers continue to pioneer the Samson’s high-performance synthetic ropes outperform wire use of new fiber technology developing innovative coatings ropes because size-for-size, they’re stronger, lighter and are and constructions to produce ropes with unprecedented perfor- more flexible, which means they’re easier to handle and mance characteristics. With more experience designing and safer for the workplace. The long-term value of using developing synthetic ropes using Dyneema® fiber than any other Samson’s high-strength ropes results in increased pro- manufacturer in the world, Samson’s material technologists and ductivity as well as improved efficiencies with overall research and development team are meeting an ever-expanding market cost savings. Upon delivery, Samson’s technical need for products with exceptional performance in critical applications. sales team and application engineers offer compre- The company’s state-of-the-art facilities in Ferndale, Washington and hensive on-site crew training and technical support Lafayette, Louisiana are ISO certified utilizing LEAN manufacturing that continues with regular follow-up consultations. and are both strategically located near major shipping ports. Samson’s distributors are also experts in fabrication who can react quickly to technical queries and be on- The Samson Advantage is its commitment to ensuring safe site with stock in hand when needed. In the final analy- and long-term operational benefits from its high-perfor- sis, experts depend on Samson synthetic ropes as a level mance products from installation to retirement. From of reliability, safety and productivity that wire ropes can- the outset, Samson works closely with its mining not approach.

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Company Profile - Paid Advertisement

40 www.coalage.com December 2011 mine rescue continued participated in many regional and nation- member of the Kentucky Coal Academy’s who took first place for benching and was al contests over the past 25 years said that Mine Rescue team from Madisonville has awarded the BioPak 240R Trophy and while the contests have grown in size, the competed in many regional and national Secretary of Labor Medallion. Gomez has format has been generally the same. “In contests, but the quality of the teams took taken the top award in several regional con- the past, mine rescue was not emphasized this one to a higher level. “It’s like the tests and won second place in the 2009 as much as it is today. Teams got smaller world series when you come up here. You National Competition. and it took longer to solve contest prob- get out in the field and you don’t know lems. At one time the average time to what you’re going into. When you hit that Other First Place Winners included: solve a problem was two hours and 18 situation you have to think right then and First Aid: TECO Coal team, David Wilder minutes. Now we have a 70-minute time decide, make decisions on what to do and Captain limit. These problems are not a lot more how to react to it,” he said. First Place Bio Pak 240 S Trophy: Dwight difficult. But we have a lot of new teams “It takes a special breed of person to Baker, Patriot Coal’s Bluegrass Mine Rescue and newer rescuers. They’re still learning, be going into a mine disaster when every- Team so they have a time limit,” said Vaughn. one else is coming out,” said Williams, First Place Bench BG4 Trophy Sec. of Labor And really, training is what this contest who would eventually earn a third-place Medallion: Daniel Bragg, Kingston was and is all about. position in the national pre-shift exami- Resources, Inc, Kingston White Just hours before the contest results nation competition. “Our most solemn First Place Pre-shift Trophy: David were posted, Stricklin proudly explained prayer is that we are never needed, but in Shackleford, Arch Coal Lone Mountain that everyone who competed was a winner. the event that we are, our Kentucky Coal Team “Though we’re going to pick one champion Academy mine rescue team is prepared First Place Combination: Patriot Coal, tonight, in my world all 103 teams are win- and is more than capable of doing the job Magnum Captains Travis Lett and Britt ners. If there was an emergency that hap- of saving lives. The Coal Academy has pro- Crouse pened right now, I would be very vided outstanding training equipment Day One First Place Mine Rescue Trophy: comfortable taking the team that finished and instructors, and this program under- Alliance/Webster County Coal—Dotiki, Jan 103rd if they said that’s the only team they stands the value and importance of hav- Chambliss, Captain have available to you. I would feel just as ing a top-notch mine rescue team trained Day Two First Place: Patriot Coal Magnum, confident in them as I would the first place and ready to go.” Travis Lett, Captain team,” said Stricklin. Williams’ was beaten out by his own First Place Mine Rescue Trophy: Alpha Chris Williams, safety director at Kentucky Coal Academy team member and Natural Resources, Black Mountain White Advent Mining in western Kentucky and a fellow employee at Advent, Patrick Gomez, Team, Philip Muncy, Captain

December 2011 www.coalage.com 41 illinois basin update

The Illinois Basin Supply-side Story A new study sheds more light on the revitalization taking place in Illinois, Indiana and Western Kentucky

BY STEVE FISCOR, EDITOR-IN-CHIEF

Judging by all of the reports coming from the region, the Illinois the most part production remained about 120 million tons until the Basin (Illinois, Indiana and Western Kentucky) is experiencing a Clean Air Act Amendments of 1990 went into effect. As utilities resurgence in interest as utilities scout for low cost and dependable began to switch to lower sulfur coals, ILB production dropped coal supplies to accommodate the investment in new pollution steadily to about 90 million tons per year (tpy). Now that trend has controls or “scrubbing,” taking place to meet more stringent envi- reversed and production since 2003 has grown steadily to more ronmental controls. In a scrubbed scenario, Illinois Basin (ILB) coal than 100 million tons. is a suitable replacement for lower sulfur Appalachian coal. With Major coal producers exited the ILB during the 1990s. In 1994, increasing demand abroad, ILB coal may soon be taking advantage CONSOL Energy produced more than 7 million tpy. In 2002, its final of international thermal markets. operating Illinois mine, Rend Lake, closed. Similarly, the former John Hanou, principal, Hanou Energy Consulting, recently pre- AMAX Coal (now Alpha Natural Resources) Delta and Wabash pared a multi-client consulting study on ILB coals. His investigation is mines’ annual production dropped from more than 5 million tpy to certainly the most current and probably the most comprehensive a little more than 1 million tpy in 1997 before closing in 2007. Arch review available on the region’s coal geology, reserves, quality, his- Coal closed the Captain mine complex in 1999 after production toric, current and future coal production, coal control/ownership, declined steadily to more than 2 million tons from 6 million tpy in transportation infrastructure, strip ratios, mine productivity and pro- 1994. Arch Coal regained a presence in Illinois after it purchased a duction costs for all active, idled and proposed mines. During his portion of Knight Hawk in 2006 and gained more momentum in research, Hanou analyzed more than 300 mines, reserves and prop- 2011 with the acquisition of International Coal Group (ICG), which erties. He makes a bold 10-year production forecast. These predic- operated the Viper mine. Through a series of transactions, Peabody tions were based on estimated FoB mine, railcar and barge for all Energy transitioned away from mostly union production. Peabody active projects. The ILB contains substantial low cost surface and deep mineable coal reserves that are currently and will continue to be extracted in the future. While the ILB contains a substantial amount of low-sulfur reserves, most of the new production coming on line will be greater than 4 lb-SO2/mmBtu. Peabody Energy and Armstrong control the remaining large blocks of low-ratio surface mineable coal. Peabody, Foresight Energy, Drummond, CONSOL Energy, Alliance Resource Partners LP and Arch Coal control large blocks of deep mineable coal. ILB producers are positioning themselves to nearly double pro- duction over the next 10 years. In 2010, production totaled 107 mil- lion tons. During 2011, production will likely expand to 116 million tons. By 2014, producers are planning to expand to 159 million tons and to more than 200 million tons in 2017. Hanou cautions that these expansions are market dependent. With its superior reserve base, Illinois will expand at a greater pace than Indiana or Western Kentucky, and most of it will come from underground mines. Peabody Energy was the top ILB coal producer in 2010, followed by Alliance and Murray Energy. By 2017, Foresight Energy is pro- jected to become the second largest ILB producer as it adds long- walls at Sugar Camp and Deer Run. In spite of Alliance opening Gibson South and taking one-third control of White Oak, Alliance will likely drop from the second largest ILB producer to the third largest producer. If Alliance would obtain 100% of White Oak, it will likely remain second with Foresight becoming a close third.

Reversing Trends The ILB saw coal production grow steady from less than 100 million tons in the mid-1950s to the 140 million ton mark in the 1970s. For

42 www.coalage.com December 2011 company profile - paid advertisement KBR Creates Stand-alone Minerals Unit to Raise Sector Profile; Better Serve Clients

On 1 January 2012 KBR created a stand-alone Minerals business with specialist sub-consultants and in-country skilled resources,” unit as part of a key strategy to better service clients all over the Read said. “This takes the work to our people wherever they are world and significantly increase its global presence in the sector. located, rather than moving resources to where the work is. The move comes after KBR’s acquisition in November 2010 of “It gives our clients top-level service in a cost-effective way, Roberts & Schaefer Company (R&S), a global leader in bulk materi- wherever they are based. It also gives them access to people who als handling and minerals processing. have worked on complex mining projects around the world, such as With the integration of R&S now complete, KBR’s decision to Teck Corporation’s coal preparation plant in Canada and Rio Tinto’s separate Minerals will allow the business unit to more effectively tar- Hope Downs mines in Western Australia.” get its core markets and build its profile as a global business. KBR project teams are specifically structured with people who KBR has appointed Mark Read as President of the new unit, have the qualifications and experience to meet the multitude of spe- which will be headquartered in Melbourne, Australia. Read has more cialized demands that the many components of large-scale mining than 30 years’ experience in minerals, with particular expertise in developments require. large projects. He was formerly Managing Director and CEO of “This ability to draw on our global resources to deliver projects is ASX-listed resources sector services company Sedgman Limited; supported by local capability through local offices, which provide the served 20 years at Sinclair Knight Merz, where, as General Manager all-important link to our clients,” Read said. of Mining and Metals, he led the division to strong international The new Minerals business unit is currently supporting mining growth; and began his career with BHP Engineering Pty Ltd. operations all over the world. It will focus on work in bulk materials “KBR has identified the growth potential of minerals and the new such as iron ore, copper and particularly coal, but will also work with business unit will ensure that we’re well-positioned to secure new precious metals when linked with key clients. It will deliver integrated work,” Read said. “The unit is poised to leverage off the megapro- solutions: all the needs of a complex mining development, including jects with which KBR has been involved, particularly in oil and gas, power, water, roads, camps, bulk materials handling, and port and such as the world’s largest GTL complex, Pearl GTL in Qatar.” marine infrastructure. The acquisition of R&S, which included R&S subsidiary Soros KBR has long provided engineering, project management and Group, a specialist in materials handling solutions for port and procurement services to mining companies; its strength in the marine applications, created a company with the capability to deliver design and delivery of mining facilities has been built up over a pit-to-port-to-plant solution. The full integration of R&S and Soros decades of hard-won experience. The R&S acquisition revolved with KBR’s global systems, procedures and pool of expertise gives around engineering excellence, enhancing KBR’s strategy to be a clients a wealth of technical expertise across all regions. leading services provider in commodity markets and enabling the The NYSE-listed KBR has about 35,000 staff in 45 countries and company to significantly broaden its services offerings to a wide had turnover of US$10 billion in 2010. As one of the world’s largest range of commodity, materials handling and process customers. providers of engineering, procurement and construction services, “The integration of R&S has given KBR the ability to supply its and program and logistics management, KBR has helped deliver clients pre-feasibility and feasibility, design, and construction pro- projects – large and small, in major cities and remote locations – in jects for materials handling primarily for mining and power opera- more than 100 countries during the past century. The company has tions, creating a pit-to-port and port-to-boiler capability,” Read said. leveraged the expertise and lessons learned from these projects by “KBR’s global footprint, financial resources, systems and capabilities developing processes to facilitate global work sharing. underpin R&S’s capabilities to give clients a highly competitive “We can access a vast resource pool of managers, engineers option for minerals projects, both in North America and globally. It’s and technicians through a network of hubs, work-sharing and high- a winning combination that aligns with our aspiration to be the lead- value engineering centers, and to this we can add key relationships ing provider for engineering services in mining.”

December 2011 www.coalage.com 43 illinois basin update continued acquired the Black Beauty operations in Indiana and Illinois, while efficient underground mining and by tapping low-ratio reserves on closing mines in Illinois. It then spun off mines as Patriot Coal to the surface. complete the transition. More recently, new names entered the ILB and began ramping up A direct reflection of the activity would be the amount of pro- production. Armstrong Energy began producing in 2008 and quickly duction represented by organized labor. At one time, the United built production to more than 8 million tpy. Hallador Energy’s Mine Workers of America (UMWA) controlled more than 90% of ILB Sunrise mine came online in 2005 and grew to more than 3 million production. On a tonnage basis, the union began to lose traction in tpy today. The biggest ILB success story, however, is Foresight Energy. the late 1980s and reached parity in the mid-1990s. It now accounts In 2000, the owner began to acquire reserves in Illinois. In 2006, it for less than 5%. Hanou does not believe the UMWA will recover in opened the Pond Creek (Mach) mine, which quickly ramped up to the ILB. more than 5 million tpy. Foresight bought the former ExxonMobil As UMWA mines closed, mine productivity improved as more Monterey mine, rehabilitated the property, and renamed it (Shay). It efficient non-union mines opened. Starting in 2000, productivity also opened the Sugar Camp and Deer Creek mines. Foresight’s pro- flattened for a few years and declined from 2005-2007 due to reserve duction grew to more than 11 million tpy in 2011. depletion and the Mine Improvement and New Emergency Currently, total mineable ILB reserves stands at more than Response Act of 2006 (MINER Act), which required mines to install 14.4 billion tons. Peabody Energy holds 4.9 billion tons (34%), fol- better seals. The ILB, however, has reversed that trend with more lowed by Drummond, 2 billion tons (14%); Foresight Energy, 1.8 bil- lion tons (13%); White Oak, 800 million tons (6%); and CONSOL Energy, 800 million tons (6%).

Keeping Costs Low “Since 2008 overall ILB productivity has increased and will likely continue to improve going forward,” Hanou said. “Low ratio surface mineable reserves have been accessed by Armstrong in West Kentucky and Knight Hawk in Illinois. Peabody Energy will be accessing low ratio reserves in Indiana. With new longwall technol- ogy, Foresight Energy has succeeded in developing the most pro- ductive longwall mine in the U.S. The company has several more longwalls planned in the next several years. Relatively thick, virgin, deep reserves are now being accessed and mined by room-and-pil- lar methods by Arch Coal/Knight Hawk, Alliance, Peabody Energy and Foresight Energy. “During 2010 our cost curves [FoB railcar and FoB barge] indi- cate that all three states were somewhat in parity with Illinois and Indiana having the edge over West Kentucky for railcar deliveries, and West Kentucky having the edge over Illinois and Indiana for barge deliveries,” Hanou said. “Going forward, it is very apparent that Illinois will dominate the other two states as several very effi- cient, low cost longwall operations are opening soon. “The low cost mine in 2010 was Foresight Energy’s Pond Creek longwall mine in southern Illinois,” Hanou said. Alliance’s room- and-pillar mines, Cardinal, River View, Dotiki, Elk Creek in West Kentucky and Gibson County in Indiana, Hanou explained, were very low cost, as were Peabody Energy’s Gateway mine in Illinois and Hallador’s Carlisle mine in Indiana. “In the future, Foresight Energy’s Sugar Camp longwall mines in Illinois are expected to become the low cost mines,” Hanou said. “With Alliance now involved with White Oak, we expect the White Oak’s new longwall mine will also be one of the lower cost mines. Alliance’s existing room-and-pillar mines as well as its new Gibson South mine will also be low-cost operations. Hallador’s Carlisle mine, Knight Hawk’s Prairie Eagle mine, Arch Coal’s Lost Prairie mine and Peabody Energy’s new Gateway North mine are expected to be low-cost coal producers.”

Realizing its Full Potential For 2012, total ILB production is estimated to reach 125 million tons—its highest level in more than 15 years. Moving forward, Hanou said planned production will exceed 150 million tons in 2013 and eventually reach 200 million tons by 2017. The region’s level of potential production could reach 250 million tons by 2017 and 300 million tons by 2021.

44 www.coalage.com December 2011 illinois basin update continued

Looking at total 2016 ILB production vs. 2010, the projected dif- ference would be 194 million tons vs. 107 million tons. Of the 87 million tons of added capacity, 58.5 million tons would originate from Illinois. Illinois currently produced 33.4 million tons in 2010. Coal production in Western Kentucky and Indiana would grow by 14.2 million tons and 13.8 million tons respectively. Illinois would overtake the other two states. Western Kentucky produced 37 mil- lion tons in 2010 and Indiana produced 36.7 million tons. “This does not mean the capital has been invested,” Hanou said. “Of the 87 million tons of projected growth, 45% to 50% has been capitalized. This 40 million tons or so will come online no matter what happens. Other companies have announced plans to open mines, such Alliance Gibson County. The remaining companies are looking for markets so they can open new mines.” These are not demand numbers, Hanou explained. “This is a sup- ply study and this is planned production. Peabody Energy is expand- ing with the Lively Grove mine. The company’s Bear Run is expanding by 4 million tons. Armstrong is looking to grow from 6 million to 12 million tpy. Murray Energy is expanding the Galatia complex by 2 portation. Decision on environmental regulations and regional pol- million tpy.” Mines such as Foresight Energy’s Sugar Camp mine, itics also influence the market. Peabody Energy’s Lively Grove mine, Solar Sources’ Charger mine, Some of the potential new markets for ILB include power plants and James River’s Log Creek mine have been capitalized. installing new scrubbers systems, new power plants (as much as 15 The study also assumes the higher cost mines will stay in busi- million tons), and thermal exports, which are expected to reach 6 ness. “If they have the reserves, this study projects continued opera- million tons in 2011 and could possibly grow to 10 million tons or tions,” Hanou said. more in the future. The ILB has the ability to greatly expand production should the The Illinois Basin Coal Supply Study 2011–2021 is available in markets develop, Hanou concludes. There are some concerns. hard copy. Founded by John T. Hanou in 2010, Hanou Energy Supply is outpacing demand. Prices for natural gas are low and will Consulting is based in Annapolis, Md. (www.hanouenergy.com). He remain until the economy improves. ILB coal still competes with can be reached at Tel: 410-279-3818 (E-mail: jthanou@hanouener- coals from the Powder River Basin. Bottlenecks exist with trans- gy.com).

December 2011 www.coalage.com 45 suppliers news

Joy Global Executives Ring the Bell on NYSE

drilling equipment, Sandvik. “Our strategy is to combine proven automation with world-class drill rigs and a strong global aftermarket support.” “By listening to customers and serving their needs our min- ing solutions deliver real operational, safety and financial value for our customers,” said Allen Patterson, COO, Flanders. “Our ARDVARC automated drill system continues to prove that. Working with Sandvik helps us in our mission of being a force for good to our customers, business partners like Sandvik and the communities we serve. Together we can better standardize the offering and formalize field support on a global scale. Our partnership will accelerate implementation and acceptance of ‘automation’ on drill rigs and benefit a growing number of min- ing companies.” To celebrate the transfer of its stock listing, Joy Global rang the bell at the NYSE on December 6, 2011. Triple Point Technology Acquires QMASTOR Triple Point Technology, a leading global provider of software to Joy Global completed the transfer of its stock listing to the New manage commodities and enterprise risk, has acquired QMASTOR York Stock Exchange (NYSE) with a bell-ringing ceremony on Ltd., a premier provider of mining software solutions to manage the the exchange floor December 6, 2011. Joy Global owns P&H tonnage, quality, and value of coal and mineral supply chains from Mining Equipment and Joy Mining Machinery. The company’s “pit” to the point of export, import or consumption. common stock had been trading on the NASDAQ under the QMASTOR’s mining supply chain solutions are used to manage JOYG symbol. more than 1 billion tons of coal and mineral movements per year. “I am very fortunate to be part of a company that has an out- The company, headquartered in Newcastle, Australia, supports its standing reputation, not only for our high quality products and ser- global client base through regional offices located in Africa, South vices, but also for our financial performance,” said Michael America and North America. Sutherlin, CEO, Joy Global. “There is no question that this opportu- “Our product strategy is to provide the deepest functionality, nity is only possible due to the efforts of all Joy Global employees from upstream to downstream, in each commodity class. Given the around the world. I view our move to the NYSE to be just one more importance of coal to future global economic growth, the addition validation of the outstanding strength and reputation of Joy Global. of QMASTOR to the Triple Point portfolio is extremely compelling,” The NYSE offers unparalleled visibility to investors and greater said Peter F. Armstrong, president and CEO, Triple Point financial flexibility for listed companies. This combination will Technology. “QMASTOR solutions are a perfect addition to the allow Joy Global to continue growing, while investing in our people, Triple Point portfolio in that they supply all the functionality to opti- products and facilities.” mize an end-to-end coal and mineral supply chain, while at the same time being completely complementary to the rest of the Triple Sandvik, Flanders Partner on Automated Drilling System Point product set.” Sandvik and Flanders Electric have entered into a formal partner- The companies’ complementary customer bases, target mar- ship to automate surface mining drill rigs and provide autonomous kets, and product sets create substantial opportunities for contin- operation. With this new partnership, the two suppliers will collab- ued and accelerated growth in combined market share, revenue orate closely to offer customers one of the most effective and effi- and profit. The outstanding financial performance of QMASTOR— cient drilling systems in the industry. The agreement between the in terms of strong revenue growth, healthy profit margins and a sol- two companies ensures that drillers get the world’s best combina- id balance sheet—underscores the suitability and attractiveness of tion of technologies for state-of-the-art automation or machine the transaction for both Triple Point and QMASTOR employees and autonomy. The Flanders ARDVARC systems have been field-proven customers. on multiple blasthole drills around the world. For factory-supplied QMASTOR Managing Director Trent Bagnall has been named systems on new Sandvik drills, the initial automation modules will Triple Point’s managing director of coal and mineral supply chain be offered during the first quarter of 2012 on machines with electric- solutions. “This is exactly the right time in the life cycle of QMAS- over-hydraulic controls. TOR to become a part of Triple Point,” said Bagnall said. “Together, we will deliver automated and autonomous “Integrating with a larger, successful organization gives us the machines directly from the factory, and offer sophisticated resources and reach to accomplish our ultimate goals. This is an retrofits for more than 2,000 Sandvik drill rigs currently operat- important time in the mining software market, and our joining-of- ing globally,” said Gregg Scanlan, vice president of surface forces will underpin and accelerate our growth.”

46 www.coalage.com December 2011 suppliers news continued

Bridgestone Increases Tire Prices German safety technology is very much in demand, and particu- Bridgestone Americas Commercial Solutions announced that effec- larly so abroad. The mining machinery section of the German tive January 1, 2012, it will increase base prices on Bridgestone, Engineering Federation, the VDMA, has therefore started a South Firestone and Continuum off-road tire products and Continuum America Initiative aimed at further expanding the trade relations pre-cure tread rubber and related retreading materials by 15% in with that part of the world. “Our high-quality technology helps the United States and 10% in Canada. Individual increases will vary make mines in South America safer,” said Dr. Paul Rheinländer, by channel. VDMA chairman. Accordingly, German technology and know-how “We are committed to providing our customers with products of will be contributing to increased safety in the Colombian mining the highest possible quality and value,” said Kurt Danielson, presi- industry, particularly in underground mining, and it will help boost dent, BACS. “While we make every effort to absorb rising costs, extraction volumes. A strategic cooperation, as well as a partnership increases related to market conditions, supply pressures, global on safety, will also encompass technology transfer. competition and manufacturing expenses have made these adjust- The mining machinery section of the VDMA expects to enjoy ments necessary at this time. one of the best years in their history in 2011, with sales increasing by BACS manufactures, markets and sells medium and heavy duty 32% to around €5 billion. “For us this is an all-time record, and we truck tires and off the road tires for the original equipment and are tremendously pleased about it,” said Rheinländer. “As such we replacement markets in the United States and in Canada through are one of the few sectors in Germany which have managed to con- Bridgestone Canada Inc. tinue growing during the whole crisis.” The explanation for this growth, Rhinelander explained, lies in the ever increasing demand Schmidt, Kranz Group Acquires 75% of Allmineral for raw materials around the world, in particular from the emerging Citing new opportunities for growth and substantial synergies, countries which are developing fast. Schmidt, Kranz Group Germany, a global mechanical engineering Under the motto of “Future Mining,” the VDMA has also company based in Velbert recently purchased 75% of the shares in launched a series of events at the universities which have mining allmineral GmbH. faculties--Freiburg, Aachen and Clausthal—with the aim of sup- According to Dr. Ing. Heribert Breuer, managing director, porting the mainly medium-sized companies in the field as they allmineral, the Schmidt, Kranz Group’s interest is a further expres- strive to meet the challenges of the future. This involves not only sion of the company’s consistent, internationally-oriented market coordinating research activities but also, in particular, attracting strategy. “The international market for ore and coal processing, young engineers. The crisis-resistant mining sector can offer them a which is our core business, has grown considerably over the last secure future. Further information can be found at www.bauma.de. years,” Breuer said. “Now that an established company with a strong global presence like Schmidt, Kranz Group has joined us, we will be able to offer our clients even more qualified expertise and to enter into new markets.” The Schmidt, Kranz Group has various subsidiaries around the world and manufactures and sells crushers, mining vehicles, tunnel boring machines and high pressure hydraulics as well as other products. The acquisition was made possible by the previous share- holders, Klösters und Ackermans, who transferred their shares to the Velbert-based company. With a strong interest in India, the companies aim toward taking joint action in the near future. allmineral Asia wants to greatly expand its activities there with those of Hazemag India. Since 2009, allmineral Asia Pvt. Ltd. is responsible for marketing, project man- agement and service for allmineral’s complete solutions in the field of mineral processing in India and Southeast Asia. Hazemag India Pvt. Ltd. is part of Hazemag & EPR GmbH, another subsidiary of the Schmidt, Kranz Group. Hazemag & EPR manufacture and distribute machines and plants for processing and crushing above ground and underground, as well as machines for underground mining. bauma 2013 Again Turns the Spotlight on Mining bauma is not only the leading trade fair for construction machinery and building material machines. Of the 420,000 trade visitors to bauma in 2010, a good quarter of them were interested in mining, according to Messe München International, the trade fair organizer. At the next bauma, April 15-21, 2013, in Munich, Germany, compa- nies engaged in the mining sector will again present their products and services to the international trade audience in a dedicated exhi- bition hall and on the outdoor area.

December 2011 www.coalage.com 47 product news

Clearing the Air Underground with Shotcrete

Based in Anniston, Ala., Blastcrete Equipment provides a variety of wet and dry shotcrete equipment. With more than 60 years of experience in the manufacturing industry, Blastcrete has established itself as a company committed to providing high value equipment for enhancing mine safe- ty. The company offers a variety of mixer and pumps in its product line. Waggett began working with Blastcrete in June 2010 when he purchased cus- tomized versions of the company’s AA020 Piccola gunite machines. At the time, Strata was using the dry gunite process almost exclusively for the overcast systems, and Waggett was looking to add some new machines to the mix. “As a development engineer, I have a lot of involvement on the product and equipment side of the busi- ness,” Waggett said. “So I’m always the type of person seeking out new, advanced equip- ment. Something that’s easier to operate, The compact Mine Mate system applies 12 cubic yards of shotcrete per hour. safer and more cost-effective.” What initially drew Strata and Waggett to Blastcrete was the ability to obtain custom In recent years, a string of coal mine igni- These structures consist of two layers of equipment. “Unlike other manufacturers tions have exposed the danger posed to wire mesh with polystyrene in between we’ve worked with in the past, we didn’t underground coal miners. Explosions are each layer. The layout is similar to that of a have to purchase the model ‘off the shelf,’” one of the extreme hazards associated highway overpass, except in this case, it’s air Waggett said. “Blastcrete was willing to work with underground coal mining; others (not vehicles) that is being redirected to closely with us to customize the equipment include a lack of fresh air, working in con- avoid collision. Before the structures can be to suit our exact needs. Up to that point, no fined space, and reduced visibility. Miners deemed complete, they must first be rein- other company had been willing to do that.” enter this environment on a daily basis to forced with wet or dry shotcrete (gunite). Strata had been using dry process cut coal. Wet shotcrete is the process of pumping shotcrete, as it had been the industry stan- Strata Mine Services (SMS) is one of the a low slump concrete material to a dis- dard. But gunite certainly comes with its companies trying to help ensure the safety charge nozzle where compressed air is share of drawbacks and Strata was really of those working underground. SMS is a injected allowing the material to be sprayed beginning to notice the negative implica- contracting service company that mining on to vertical and overhead surfaces. Dry tions. Because it’s a dry-mix process, gunite companies employee to handle a variety of shotcrete (gunite) is the process of intro- applications produce a lot of dust—a major projects, anything from general labor to ducing a dry or predampened shotcrete problem in underground mines where air ventilation controls. “One of our specialties material into an air stream that conveys the passes throughout the entire mine. Once is in the application of shotcrete as under- material to a nozzle where water is injected that air is laden with dust, it will circulate to ground reinforcements for use with spray in to the material. Both processes require the other areas in the mine causing a seri- panel overcasts,” said Jeff Waggett, P.E., special equipment to apply the material. ous health and safety concern. senior development engineer, SMS. Specialized construction work such as For Waggett, the health and safety issues Spray panel overcast systems are often this is part of the SMS repertoire. The were a top concern. “In addition to breath- used to properly ventilate underground company has a long-standing commit- ing in harmful dust, there’s also the safety workings. Constructed of lightweight pan- ment to safety, with quality work and cus- issue of reduced visibility. You can’t see as els, overcasts are designed to isolate a pas- tomer service key to its core values. For well when there are dust particles every- sageway or prevent air from mixing at the the company to provide this elevated lev- where,” he said. intersection of two aircourses. “As one can el of service to customers, it needs reli- Strata had been exploring the idea of imagine, ventilation is a crucial element of able equipment from trusted suppliers. using a wet-mix, or wet shotcrete, process underground safety so it’s a major compo- Blastcrete Equipment Co. is one such to combat some of the issues posed by the nent of our offerings,” Wagget said. supplier. dust. Typically, a wet-mix shotcrete process

48 www.coalage.com December 2011 product news continued generates less airborne particles and What Waggett ultimately wanted was a Waggett was also very pleased with rebound (waste) than gunite, simply machine that could operate underground how easy the system was to clean. One of because the material has 100% of the mois- and allow the crew to mix and pump right the misconceptions and deterring factors ture added to it. Another advantage is the inside the mine. This would combat the lack about using wet shotcrete equipment is speed factor; wet shotcrete can be applied of efficiency with the company’s current that it needs more attention than gunite much faster than gunite. The Strata crew shotcrete process. machinery. While wet shotcrete equip- had actually even tried to use wet shotcrete “I was confident the crew at Blastcrete ment does require more immediate atten- for overcast installations on a few occa- would provide us with what we needed,” he tion after operation, both types of sions. But while the process cut down on said. And he was right. Early that summer, machines require frequent cleaning and some of the safety issues associated with Blastcrete met the SMS challenge with the maintenance. Waggett noted that cleaning gunite, the equipment system wasn’t as Mine Mate. and maintaining the Mine Mate has been efficient. The Mine Mate, a new machine featur- quick and easy every time, particularly “We didn’t have any wet shotcrete ing the X-10 high-pressure swing tube thanks to Blastcrete’s innovative continu- equipment that was compact enough to pump, can apply up to 12 cubic yards per ous feed mixer. The mixer is easily cleaned actually go underground, so we had to do it hour. The machine also includes a high- by removing the mixer housing and flush- from the surface,” Waggett said. shear continuous mixer. Perhaps most ing. The pump is simply engaged in The lack of compact equipment meant importantly, the Mine Mate is designed to reverse and flushed with water until the there was a large divide from the surface be compact enough to work underground. swing tube and material cylinders are where shotcrete was being pumped, to “I’ve still never found another piece of clean. where the application was actually taking equipment, other than Blastcrete equip- Beyond customized and user-friendly place underground—resulting in a less effi- ment, that can operate in the mine,” equipment, Blastcrete also provides excel- cient process than the traditional gunite Waggett said. “This was exactly what we lent customer service. The domestic method. So in May 2011, familiar with needed.” nature of Blastcrete’s operation allows Blastcrete’s willingness to customize solu- Since using the Mine Mate, Waggett Waggett’s crew to reduce downtime. tions to his company’s specific needs, and his crew have seen a significant reduc- Replacement parts can be overnighted Waggett approached Blastcrete’s Sales tion in the amount of dust emissions from Blastcrete’s facility in Anniston. And Manager Tripp Farrell with another chal- underground. Waggett estimates the crew the significance of reducing downtime lenge: Solve the problem of inefficiency with is seeing “about 40% to 50% less dust. can’t be overstated, especially with safety a customized machine. That’s a huge reduction.” and lives at stake.

December 2011 www.coalage.com 49 product news continued

The Mine Mate continues to help Strata Category M1. This certification standard for Cold Weather Mask provide safe and efficient overcast installa- the European Union confirms the equip- Ergodyne has expanded its N-Ferno tion, but Waggett and his crew have kept ment as intrinsically safe. “These approvals Extreme Warming product line to include the machine busy with other tasks as well. open a new door of opportunity for Mine the new, redesigned N-Ferno 6970 Extreme The crew often detaches the wet shotcrete Site Technologies in Europe, with the instal- Balaclava with Hot Rox. This technologically nozzle in order to simply mix and pump lation of these technologies now being pro- advanced cold weather mask combats the concrete for various underground applica- gressed in mines in Germany, Poland and damaging effects of cold air, controls mois- tions. It sounds simple, but according to Russia,” said Lloyd Zenari, CEO, Mine Site ture and warms to the core. Cold air pre- Waggett, “It’s very convenient and provides Technologies. “We make modern and fit- sents a serious threat to the body’s vital us with the versatility we need for several for-purpose technologies available to our organs and systems. Helping prevent rapid applications.” This convenient and versatile customers with a focus on enhancing safety loss of body heat, the new Hot Rox balaclava nature has allowed the Mine Mate to benefit and productivity through applied technolo- captures heat from each exhaled breath and crews in various tasks. gy. We provide the opportunity for increas- brings it back to our body’s core—easing With a commitment to safety a core val- ing productivity, safely.” Formal testing of breathing and allowing workers to maintain ue of the company, Strata Mine Services has the MinePhone and NS40 was carried out full lung capacity in the most extreme winter found the key to meeting that goal is a com- by DEKRA-EXAM of Germany. conditions. The N-Ferno 6970 Extreme bination of finding the right equipment to www.minesite.com.au Balaclava with Hot Rox will be available ensure productivity and refusing to settle December 2011. www.ergodyne.com for anything less than the ideal solution. In both cases, Waggett credits Blastcrete with being an essential element in the mix, pro- viding Strata with concrete results and a safer environment in the mine. www.blastcrete.com

Digital Mine Phones The MinePhone VoIP digital phone and NS40 Wireless Access Point for integrated underground mining communications have achieved ATEX certification, Group 1

50 www.coalage.com December 2011

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December 2011 www.coalage.com 53 CONSULTANTS AND SERVICES

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54 www.coalage.com December 2011 FOR SALE HELP WANTED

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December 2011 www.coalage.com 55 legally speaking When the Mine Door Closes, Another Door Opens

BY CHRISTA ROCK

The adage that “bad facts make bad law” is Section 103(k) order. Even though the plain language of the as old as the law itself. But in an extraordi- statute says that an operator may use it to seek relief from modi- narily rare turn of events, “catastrophic fication or termination of “any order,” both Administrative Law facts” have made law that is very, very good Judge Margaret A. Miller and three members of the Review for the mining industry. Commission sided with MSHA in deciding that the law was Those “catastrophic facts” arise from the intended to apply only to orders under Section 104. These deci- explosion at Performance Coal’s Upper Big sions would have given Performance Coal—and any other oper- Branch mine in West Virginia that killed 29 ator facing down the barrel of a 103(k) order—absolutely no coal miners in April 2010. The quote comes from a federal appel- recourse in the face of MSHA’s mine closure powers. late court that recently decreed that MSHA cannot abuse its Performance Coal appealed to the U.S. Court of Appeals for power to issue mine closure orders, no matter how bad the acci- the District of Columbia. Apparently realizing that its abusive dent that preceded it. Performance Coal v. Federal Mine Safety investigative orders would create “bad facts” for the appeal, and Health Commission, 642 F.3d 234 (D.C. Cir. 2011). MSHA withdrew those parts of its 103(k) order that seemed most The case began with the accident: Just after the fatal explo- unjust. MSHA then argued to the appellate court that the issue sion, the Mine Safety and Health Administration (MSHA) issued was “moot.” The federal appellate court saw it differently. an order seizing control of the Upper Big Branch mine “to insure Because a 103(k) order could be issued again to Performance the safety of any person in the...mine.” The order was issued pur- Coal—or any other mine operator—at any time, the controversy suant to Section 103(k) of the Mine Act, a provision familiar to needed to be settled. More importantly, the court found the lan- any operator who has experienced the misfortune of having a guage in the Act was a “model of near-perfect clarity” that serious accident. But MSHA’s 103(k) orders at Upper Big Branch unquestionably gave mine operators the right to get relief from were anything but ordinary—the agency modified the order modifications of Section 103(k) orders. more than 60 times in six weeks to assist with rescue and recov- Just how much the Performance Coal decision will impact the ery at the mine, and then to direct the accident investigation. rights of mine operators subject to 103(k) closure orders will be But this is where MSHA made bad facts worse. Rather than determined in the coming months and years. In November, limit its Section 103(k) authority to oversee rescue, recovery and Pattinson Sand became the first operator to invoke Performance reopening of the mine—purposes expressly identified in Section Coal to modify a 103(k) closure order. Up for consideration was 103(k) of the Mine Act—MSHA began using its authority to gain whether MSHA’s 103(k) order should be evaluated under a strin- tactical advantage in a very complex investigation. According to gent “arbitrary and capricious” standard or a more lenient mea- the circuit court opinion, revised 103(k) orders prevented sure, and whether the Review Commission has the authority to Performance Coal from “taking or retaining photographs, col- modify a 103(k) closure order, or simply vacate it. The court in lecting and preserving mine dust samples, employing mine Pattinson Sand Company, CENT 1012-137 (December 13, 2011) mapping technology, and participating in or objecting to any decided both of these questions against the operator, but an destructive testing of materials gathered underground.” That appeal is imminent. means MSHA was allowed to gather evidence and perform All in all, the Performance Coal decision is good news for tests—including tests that Performance Coal would be unable to operators. The picture of what that relief will ultimately look like replicate later to defend itself—but the operator was not. in practice is just being sketched out in decisions like Pattinson In litigation briefed and argued by my colleagues at Patton Sand Company. But operators should be aware of their ability to Boggs, Performance Coal sought relief from the Federal Mine seek expedited relief from the modification of Section 103(k) Safety and Health Review Commission. The Mine Act includes a Orders and invoke it as necessary. It’s always a good idea to clause that allows an operator to request “temporary relief from involve counsel in a Section 103(k) Order situation. This new law any modification or termination of any order or from any order makes it doubly important that counsel is consulted before issued under section [104 of the Mine Act].” 32 U.S.C. § 815(b)(2). deciding how to respond to a modification of a Section 103(k) However, this provision of the Act had been invoked only to Order that appears unreasonable. challenge withdrawal and unwarrantable failure orders under Rock is an associate in the Denver office of Patton Boggs LLP. She Section 104 of the Act. It had never been put to use to contest a can be reached at 303-894-6141 or at [email protected].

56 www.coalage.com December 2011