The No. 1 auger and highwall complex in Whitely County initially commenced production with its first auger in late November and announced the start of the second in early December; however, NAG cited the unusually cold weather that has come with the latest eastern US arctic blast for a delay in the latter machine’s start.
The company also noted last week that Blue Star Energy, the customer of the No. 1 mine, has approved the coal quality from the product received.
“As a result, the coal purchased by Blue Star will command full market price,” officials said.
Blue Star, a coal production and brokerage firm which serves industrial coal users and electricity suppliers in the Appalachian region, is purchasing up to 15,000 clean tons of product monthly from the No. 1 operation.
Blue Star completed its Jellico seam analysis at the mine in November and found the sample to contain 8% ash, less than 1% sulfur and 12,800Btu.
The company announced last month that its proposed No. 3 highwall, auger and surface operation was set to begin drilling.
NAG submitted the permit application for the operation to the Kentucky Department of Natural Resources in late November, just days after kicking off production at No. 1.
Both the Jellico and Blue Gem seams are included in the permit’s mine plan; the former is high-quality steam product while the latter is a specialty coal used typically for silicon metal production.
In total, the producer holds about 5000 acres of coal reserve leases in Knox and Whitley counties in Kentucky, and is actively developing seven for permits.
Based in Vancouver, North American Gem has a coal focus in Saskatchewan, Kentucky and West Virginia.