Consol made two major announcements in June, beginning with its Enlow Fork mine in southwestern Pennsylvania would be the focus of a major expansion. The $US500 million expansion would increase annual production by 70% to 17Mtpa and provide 400 new jobs for the area.
The company then established the CNX Gas Corporation to control 18.5% of the methane gas segment of its business. These two announcements were augmented by strong second quarter numbers showing a 97% increase in earnings from operations and a 23% increase in total revenues.
To follow up the strong second quarter, Consol posted its best-ever earnings during the third quarter, showing a profit of $US377 million. However, costs continued to escalate, increasing 21% from the same period last year. As a result, Consol announced it would be closing its Shoemaker mine in West Virginia sometime during 2007.
Other problems plagued Consol through the year, including a February longwall fire that forced the company to seal its Buchanan mine in Virginia. The total cost of the fire was later determined to be $US23.3 million which the company hopes to recover through insurance.
Production at the Buchanan mine was also halted in September due to a broken skip hoist; a problem which kept the mine idle until mid-December. To add injury to insult, a maintenance worker at the soon-to-close Shoemaker mine was killed in May when he was struck by a battery-powered scoop.
Just as the loss of life and production time didn’t adversely affect the company’s banner year financially, neither did it dampen the company’s plans for the future.
In the first quarter, the company was able to use geologic modeling and reserve evaluation to increase its Pittsburgh seam reserve by 352mt, significantly extending the life of the operation.
In September, showing its interest in a cleaner environment, Consol, along with other major US coal producers American Electric Power, BHP Billiton, Foundation, Rio Tinto, Kennecott, Peabody and Southern, formed the FutureGen Industrial Alliance. The non-profit company will work with the US Department of Energy to build the world’s first near-zero emissions coal-based power plant. Such a facility may ensure coal’s viability as a power-producing natural resource for generations to come.