The Tunnel Ridge reserve area, tagged by Alliance for “immediate development”, covers 9400 acres in Ohio County, West Virginia and Washington County, Pennsylvania. It includes about 70.5 million tons of high sulfur coal in the Pittsburgh No 8 seam.

Opting to fast-track the underground complex, the company said it should see commencement of production during the second held of 2010 and a full staff of about 300 by the end of that year.

"ARLP has secured coal sales commitments for 30 million tons over 10 years to support the opening of the Tunnel Ridge mine and is experiencing strong interest from other customers for the remaining production from this operation," president Joseph Craft III said.

"The decision to open the Tunnel Ridge mine enhances ARLP's position in the strategically important Northern Appalachia region and complements our continued growth in the Illinois Basin region."

Officials for ARLP estimated coal sales from Tunnel Ridge will be 1.5-3 million tons in 2010, increasing in 2011 to 5-5.5Mtpa and again the following year to 5.5-6Mtpa.

The company has earmarked $US265-285 million in capital expenditures between now and 2010 for the mine’s development. It has increased its 2008 capital costs to $220-240 million to include Tunnel Ridge’s needs.

The new mine will add to a number of development already flagged in the Northern Panhandle region. While it has no immediate plans to develop it, Massey Energy said last December it had acquired a 50% ownership of 35 million tons of the Sewickley and Pittsburgh seam reserves located in Marshall County, as well as full lease rights.

Massey investor relations director Roger Hendriksen told International Longwall News at the time the reserves are in an area just north of Moundsville and east of the Ohio River, which provides strategically vital river transportation access.

The deal, inked for an up-front cash consideration of $US2.8 million, includes gas and oil rights within about 15,000 acres of land as well as a commitment to a long-term lease for the operator.

Massey chairman Don Blankenship said the region was becoming increasingly important to the coal and energy industry and enabled the company to take advantage of the growth in demand for Northern Appalachian coal.

In July, Consol Energy said it and Synthesis Energy Systems had plans to develop the first coal gasification and liquefaction facility in the US in Benwood, Ohio County.

Consol’s Terra Firma Company division and SES will become known as Northern Appalachia Fuel to develop the mine-mouth project that will be supplied by Consol’s Shoemaker mine to produce gasoline and methanol.

The two estimated the syngas will be used to produce about 720,000 tons a year of methanol that can be used as chemical feedstock.

The project will also be capable of converting methanol production to 100 million gallons of 87-octane gasoline a year.