The first mine is expected to be fully operational by early 2009, with the second mine to open the following year. The development will replace production from the Cypress Creek surface mine in Boonville, Indiana, where reserves will be depleted within the next two to three years.
The company said the new reserves – estimated at 80 million tonnes of recoverable number-five coal – were located within 50 miles of eight coal-fired power plants and were immediately adjacent to the mainline railroad to easily serve neighbouring facilities.
The two mines will produce around 5Mt annually, with the majority of the output to be used at Vectren's A B Brown and F B Culley power plants in Posey and Warrick counties.
“This project allows Vectren to not only continue using Indiana coal to serve our customers in southwestern Indiana, but also provide a number of good jobs," said Vectren chief Niel Ellerbrook.
“Our coal mining operations have been successful, and I'm confident this venture will continue that trend as recent advancements in clean-coal technologies for electric generation suggest continuing demand for coal."
The mineral rights for the reserves were purchased from Templeton Coal Company.
The company operates the Prosperity underground mine at present and once the two new mines are in production, company-managed production will increase to about 8Mt of coal per year.
