The coal business finished weak in 2015 and its off to a slow start in 2016, and the information contained in Coal Age’s annual U.S. Longwall Census reflects a market in turmoil.
Similar to overall U.S. coal production, total longwall production saw a double digit decrease. Collectively, U.S. longwall installations produced nearly 182 million tons in 2015, a 12.3% decrease over 2014. The four top-producing longwall complexes operate two faces each, and three of them produced more than 10 million tons. Last year, 17 longwall installations produced at a capacity of 5 million tons per year (tpy) or more, compared to 20 in 2014.
This year, one longwall face was removed and the ownership of 15 faces changed hands. Alpha Natural Resources is no longer operating a longwall face at the Emerald mine in Pennsylvania and it was removed. Year-on-year, the total number of longwall mines dropped to 40 from 41. Similarly, the number of longwall faces dropped to 45 from 46. Five mines operate two longwall faces.
CHANGE IS THE ONLY CONSTANT
Last year, Murray Energy Corp. (MEC) supplanted CONSOL Energy as America’s longwall leader from a production standpoint. Foresight Energy’s Sugar Camp mine and MEC’s Marshall County mine posted total production figures of more than 10.5 million tons and nearly 10.3 million tons, respectively. The new Nos. 1 and 2 longwall mines displaced CONSOL Energy’s Bailey and Enlow Fork mines, which have held those positions since 1992.
Two years ago, MEC eclipsed CONSOL Energy on an ownership basis when the company purchased six of its West Virginia longwalls. In 2015, MEC purchased a controlling interest in Foresight Energy, adding four more longwalls to its portfolio and bringing its total to 14 longwalls. Despite some payroll reductions, much of MEC is operating as it has been. UtahAmerican Energy’s West Ridge mine ceased operations in 2015 as it had reached the end of its reserve life. The group is now operating the Lila Canyon longwall mine in Utah.
Two of three Foresight Energy longwall mines in Illinois (Sugar Camp and Mach Mining) resumed production in early 2016 following a lengthy Christmas holiday break. The company’s Deer Run longwall mine remains idled indefinitely, however, because of a stubborn carbon monoxide problem that has dogged the mine since March 2015. While MEC’s acquisition of the Foresight Energy mines was a big deal, it wasn’t the only deal in 2015.
ERP Compliant Fuels has emerged as a new U.S. longwall operator. The company, which is affiliated with the Virginia Conservation Legacy Foundation (VCLF), acquired the American Eagle and the Federal No. 2 longwall mines in West Virginia from Patriot Coal through a bankruptcy sale at the end of October. ERP is actively marketing the sale of compliant fuel, which bundles reforestation carbon credits with coal sales to reduce the rate of growth in atmospheric carbon dioxide. Their goal is to rebalance the domestic supply through the purchase, reclamation and retirement of 135 mining permits in five states.
In December, Cliffs Natural Resources agreed to sell its two longwall mines, the Pinnacle mine in West Virginia and Oak Grove mine Alabama, to Seneca Coal, an affiliate of ERP Compliant Fuels. At the time, the company said Seneca planned to produce 4.4 million tons of metallurgical coal in 2016 and employ 811 people in West Virginia and Alabama.
As this edition was going to press, Walter Energy announced it was selling its remaining assets to Seminole Coal Resources, an affiliate of ERP (see Breaking News, p. 4). Walter Energy, formerly Jim Walter Resources, operates the Blue Creek longwall mines in Alabama. They produce metallurgical coal from some of the deepest and gassiest mines. Similar to Patriot, Walter Energy and its U.S. subsidiaries had filed for relief under Chapter 11 of the U.S. Bankruptcy Code.
Now ERP operates a total of six longwall mines, three mines in Alabama (four faces) and three in West Virginia. The company’s Pinnacle mine is the only plow face operating in the U.S.
Bowie Resource Partners purchased the Twentymile longwall complex in Colorado from Peabody Energy. Although the Twentymile mine only produced 4.1 million tons in 2015, it is capable of producing 8 million tpy or more. Bowie now operates two longwall mines in Colorado and three longwall mines in Utah. In September 2015, the company said it would be scaling back production at its Bowie No. 2 mine near Paonia, Colorado, as a result of idling its longwall while it develops a new longwall panel and continues to evaluate the market. Bowie expects the new longwall panel to be fully developed by September 2016.
During the summer of 2015, Alliance Resource Partners gained complete operational and marketing control of Hamilton No. 1, formerly known as White Oak No. 1, from privately owned White Oak Resources. The mine near McLeansboro, Illinois, was commissioned three years ago and quickly ramped up to 5.8 million tons in 2015. This gives Alliance three longwalls including the two in West Virginia: Tunnel Ridge and Mountain View.
In May 2015, Westmoreland Coal Co. purchased the San Juan mine in Farmington, New Mexico, from BHP Billiton and entered into a new long-term coal supply agreement with the owners of the San Juan Generating Station. The San Juan mine is one of America’s leading longwall operations. In 2014, it produced nearly 8.8 million tons of coal from a single face. The mine has also developed new technology and implemented ventilation techniques to remain competitive.
In February 2015, Tronox Ltd. acquired FMC’s Alkali Chemicals Division, which included the Westvaco longwall mine. Westvaco mines trona (or soda ash), which is a relatively soft rock that can be cut similar to coal.
BY THE NUMBERS
With 13 faces, West Virginia remains the longwall leader, followed by Illinois (7), Pennsylvania (6) and Alabama (5). Looking at the numbers, the average U.S. longwall mine operating in coal produces 4.5 million tpy, compared to 4.4 million tpy in 2014. On average, it has a cutting height of 91.6 in., a panel width (or face length) of 1,215 ft, and a panel length of 11,935 ft. Last year, those numbers were 91.4 in., 1,228 ft and 12,117 ft, respectively. Thirteen longwall faces have face lengths of 1,500 ft or greater. A total of 16 longwalls operate in the Pittsburgh No. 8 seam. The maximum overburden on average reaches 1,089 ft. Except for a few mines in Utah, most are developed with three entry gates. Using a 1,828-hp double-drum, ranging-arm shearer, they take a 39.7-in. cut. The average yield setting on the shield is 1,024 tons. All of the faces except for five are high voltage (4,160 volts).
As far as extremes, the deepest longwall mine is CONSOL Energy’s Buchanan mine in Virginia, operating at a depth of 2,000 ft. The Powhatan No. 6 mine in Ohio operates the longest face: 1,548 ft. At 22,500 ft, Signal Peak Energy’s Bull Mountains mine in Montana has the longest panel. The West Elk mine in Colorado and the SUFCO mine in Utah are operating 2,805-hp shearers.
