Phoenix's Gryphon full speed ahead

KENTUCKY producer Phoenix Coal has filed a technical report for Gryphon, its newest project and first underground operation, in preparation for the mine’s 2011 opening.
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A Phoenix facility working to load coal. Courtesy Phoenix Coal.

Donna Schmidt

The report on the Illinois Basin operation was by consultant Marshall Miller and Associates.

Phoenix spokesperson Stephen McLean said the report’s completion kept the company on schedule for ramp-up in the second half of 2011.

The mine reserves include a massive contiguous block of No. 9 coal in Webster and Henderson counties, Kentucky.

McLean told ILN the initial block, Pratt, was purchased in 2007. The Panama South reserve was later added and the two were joined just recently with the acquisition of the Petersburg reserve in late March.

"Since we completed our public offering in June of 2008, we have increased our reserve base from 43.7 million tons to more than 80Mt of proven and probable coal reserves, including our surface mining assets," company president David Wiley noted.

"In addition to the increase in reserves, we have significantly enhanced the value of Gryphon with [the] acquisition of a strategically located portal site and by the fact that it is one of the largest contiguous blocks of underground coal in Western Kentucky."

With 68.4Mt of recoverable reserves, Gryphon’s Illinois Basin foothold will go on for decades, McLean said. At prime production, the complex is anticipated to extract 3Mt per annum using continuous mining machines running supersections.

Development progress continues, with work on a drilling program nearing completion. In addition, he said, bid packages for construction are being prepared, the portal site’s surface layout is being finalised, a preparation facility contractor is being retained and the company is meeting with equipment producers to determine which will supply the fleet of CMs and other mining machines.

With many of the permits for Gryphon already received, McLean said no delays to the company’s timeline were expected with regards to the remaining approvals.

“We have already received all the required permits for our original portal site,” he said.

“However, through the acquisition of the Petersburg reserve, we gained access to an alternative portal site which is larger than the original, and we believe can sustain higher throughput capacity. We are in the process of permitting that alternative site.”

Phoenix will capitalise on its investment and future capital expenditure by mining the coal in-house, versus bringing in a contractor.

While a mine beginning production in 2011 could allow time for some market rebound, McLean said Phoenix had “no hesitations” about developing Gryphon.

He said there was sufficient demand for the low-chlorine product Gryphon would produce from the No. 9 seam. Many of its regional neighbours had found that higher levels of chlorine were limiting customer base options, since the chemical causes scrubber damage.

In the case of this new complex, McLean added, the company has been in active discussions with utilities and the mine product is ideal for its chlorine-heavy neighbours seeking a blending partner. Phoenix officials declined to identify any current or potential customers or the status of talks.

Additionally, the property has a significant transportation advantage – a readily available portion of CSX rail line that runs through the property, which is currently greenfield.

Once the mine is up and running, its design will permit for a very short trip from the portal to the adjacent preparation plant and rail loop, or less than one mile to water transportation outlets at Green River.

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