The company announced on Tuesday the green-light had been given to mine permit 861-0513 by the Kentucky Department of Natural Resources.
NAG will now have its first opportunity to mine the highly sought after Blue Gem coal seam at the auger and surface mine, which will also extract from the Jellico seam.
"Blue Gem coal is a rare and increasingly valuable seam of coal used in the production of silicon metals," company president Charles Desjardins said.
"Producing Blue Gem coal has been our primary strategic business focus; this new mine is a significant step forward for the company and we are aiming to achieve our goal of becoming a long-term Blue Gem coal producer."
The highest-priced coal grade in the US, Blue Gem coal’s value is about 200% higher than high-quality steam coal.
NAG’s contract miner, Kentucky Mine Partners, has obtained and staged all necessary equipment to begin operations.
Initial estimates for the No. 2 mine from Blue Gem and Jellico total 8,000-10,000 tons per month combined.
Once mined, the coal will be sent to the North American Gem Processing Facility, the company’s central operation and distribution point for its operations in the region.
NAG has already secured a buyer for all of the No. 2 mine’s coal production.
In related company news, production at the NAG No. 1 highwall/auger operation in Whitley County has been completed.
“The Jellico coal, which averaged in quality less than 12% ash, less than 1.1% sulfur and greater than 12,200Btu [British thermal units], was sold to four buyers over the course of the mine's operations,” NAG officials said.
“Since North American Gem Mine No. 1 was opened for the primary purpose of initiating and streamlining NAG's Kentucky mining operations, the decision to conclude mining at the … mine was based on profitability analysis of the remaining coal at the mine and the need to dedicate assets to more profitable mining operations.”