Published in the December 2006 American Longwall Magazine

Southern Wyoming, Utah and Colorado will face some testing times in the next 10 to 20 years. Utah is at a major crossroad with reserves suitable for longwall mining depleting; Colorado is facing rising transportation costs and the loss of its low sulfur premiums; and Southern Wyoming remains constrained by what has historically been a local market. Despite this, operators remain optimistic with several new mines currently being constructed or planned.

What challenges will operators have to overcome for the Western Bituminous Region to continue to thrive? American Longwall Magazine speaks with Denver-based Hill & Associates senior consultant Bob Burnham about the current situation and outlook for reserves, transport and the impact of flue gas desulfurisation equipment (scrubbers) for the region. Hill & Associates has conducted extensive research into the region with its Western Bituminous Coal Supply, Demand and Price Trends 2005-2015 study.

Dwindling reserves

While Burnham forecasts adequate reserves for the next 10-20 years, Utah is perhaps the Western state most impacted by a dwindling reserve base. “The major reserve blocks are being mined out quite rapidly and the future reserve blocks suitable for longwall mining are quite limited,” he said. According to the Utah Geological Survey (UGS), the Wasatch Plateau coal field contains 1.3 billion tons of reserves, followed by the Emery coal field, then the Book Cliffs.

One solution to reserves that are becoming harder to find and harder to mine is for operations to move away from large longwall operations and into less capital-intensive room and pillar operations. During 2005 there were six longwall mining operations and 24 continuous miners in operation in Utah.

While this issue will not rear its head for another 10-20 years Burnham said telltale signs are already evident. Genwal Resources’ Crandall Canyon mine stopped using its low-profile longwall in August last year and is now pulling pillars before closing the mine in 2008. The longwall system is now operating at its South Crandall mine.

Operations are also being forced to uncharted depths. Operations in the northern Utah coal fields have gone well beyond 2500ft of cover and in spots are hitting 3000ft. The Aberdeen longwall is currently mining around a depth of 2800ft with plans to approach 3150ft – deeper than any longwall that has ever successfully been used in the US. The operation told UGS that while the longwall seemed to be managing the depth, “the development work with continuous miners causes delays and concerns. In order to mitigate ‘bounce’ problems, large barriers of coal are left between longwall panels for additional support.” The mine is also drilling gob-vent gas wells to aid ventilation.

In Colorado, Burnham said the state was in a better position with plenty of replacement reserves. According to the Energy Information Administration, estimated recoverable reserves for the state are 10 billion tons (6.3Bt are underground). Colorado ranks seventh among the states in coal production, and is the nation’s fourth leading producer of coal by underground methods.

“There are still a number of good reserve blocks in Colorado so I don’t see any long-term problems as far as production capacity – bringing the coal out is the difficult part,” Burnham said.

The main producing region will be the Uinta area, near Somerset. Replacement reserves, according to Burnham, are available in the Book Cliffs and the area north-northwest of Grand Junction also has large potential.

Burnham said the Yampa region, near Steamboat Springs, held promise and was currently making a transition from surface mining to underground operations. Of note is Peabody’s Twentymile operation in the area, which has just installed a new longwall system and is aiming to produce 12Mtpa. According to Burnham, the operation has plenty of life in it, with several other reserve blocks that are amenable to a longwall in the area. He said reserves at the Twentymile operation will probably be depleted in the next six or seven years but replacement reserves are available in the region.

Several large surface mines also do periodical evaluations of underground mining including Rio Tinto Energy’s Colowyo operation and the Trapper mine.

In Southern Wyoming the area has experienced a period of shutdowns but few replacement mines to fill the void. One exception is PacifiCorp’s Bridger mine near Rock Springs, which after 30 years of opencut mining is now installing a longwall for ramp-up early next year. The longwall will access underground reserves containing about 100Mt of mineable coal from 250-900ft in depth.

One of the biggest challenges the mine faces is the strata conditions with a soft siltstone and sandstone roof. “Given the history of the now-closed Shoshone mine, operators in the area need to watch for propensity for spontaneous combustion. When the Shoshone longwall originally opened it had trouble with the gob caving with air entering the gob from the surface – increasing the risk of [spontaneous combustion]. Knowing it has been a problem in the past hopefully makes the folks up at Bridger and in Arch be a little more aware of the potential and take steps to try and eliminate it,” Burnham said.

The other prospective mine is Arch Coal’s Medicine Bow project in the Carbon Basin. The project is being planned as a mine-mouth coal-to-liquids facility that will use coal from Arch's Carbon Basin reserves in Southern Wyoming as a feedstock. As part of Arch’s deal with DKRW Advanced Fuels, it will explore potential reserves and project opportunities of similar size to Medicine Bow in two other coal basins in the state.

Sulfur blues

Over the past 10-15 years the Western Bituminous Region has enjoyed the premium price paid for its low-sulfur coals – but not for long. By 2012 almost all coal-fired power plants in the east and mid-west will have scrubbers – meaning the advantage of low-sulfur coal is no longer financially significant.

“For most of the west – because of a change in the environmental laws to switch to scrubbers everywhere – we see some cost pressure on most of the Western Bituminous mines. On the general market there are a number of mines that are captive and they won’t be affected as much, but for the ones that aren’t – they will feel it,” Burnham said.

“In the next five to seven years these...click here to read on.