US mine to undergo major expansion

CAM (Central Appalachia Mining) Holdings has announced plans to expand the company’s McClane Canyon mine and develop a brand new rail spur that would connect the mine to a Union Pacific mainline nearby.

Donna Schmidt

McClane Canyon mine is currently the smallest mine in Colorado and the $US163 expansion would increase production nearly twentyfold to approximately six million tons per annum, according to CAM Holdings chairman Terry Coleman and president Jim Slater, who spoke at the Tilman Bishop Unified Technical Education Campus (UTEC) this week. Now staffed with about 25 employees, the mining operation’s payroll after hiring an additional 150 workers could grow to nearly $US43 million when expansion efforts come to fruition and production begins.

“We will be diligent in providing a workforce that will meet our needs and provide stability to the workforce in the future,” Coleman said.

The rail line extension will not only make a significant economic impact, it will also exponentially improve efficiency to the degree the increased production will require. The company currently hauls product by truck to the Cameo power plant in nearby De Beque; however, the additional production will allow it to ship its low-sulphur coal east of the Mississippi River, where demand is high.

While the expansion is coming, it is not eminent, according to Slater. Increased production may not begin for four years or more pending environmental investigations and subsequent construction, which will include moving the entrance to the mine four miles to the south – adjacent to a planned loading facility at the rail spur.

The plans, however, had always been in the cards for CAM, said Coleman; the company purchased the mine in May 2003 during a bankruptcy sale. “We started talking about a major expansion almost immediately,” he said. With an 18ft seam, the mine would have more than two decades of production ahead, assuming 6Mtpa.

Coleman also announced CAM would help finance a miner training program at UTEC, but did not identify the amount of funding to be provided. With coal’s continuing upward demand swing, he said, such a program would guarantee it a qualified, sturdy staff as demand for coal spikes even higher.

“There’s a realisation now that you can’t expand utilisation of natural gas for electrical generation and have any left for people to heat their homes,” said Coleman. “The fuel for the next generation of power plants is going to be coal.”

CAM said it had begun the necessary course of public review to gain approval for the spur, and this week would submit its land-use application to the Bureau of Land Management, owner of some 60% of the land the line would pass through. The bureau would also oversee its EIS (environmental impact statement), which, Coleman noted, it was important the company put up its hand for.

“We will build this and operate it very responsibly,” he said, “We want to minimise environmental impacts in constructing and operating the rail line.”

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