(The following appeared at BillingsBusiness.com on September 15.)
BILLINGS, Mont. — The new owners of an underground coal mine south of Roundup plan to invest up to $450 million into the mine and an accompanying railroad, and Montana coal could be shipped to utilities in the Midwest within a year.
Boich Cos., a coal company based in Columbus, Ohio, and FirstEnergy Corp., a utility based in Akron, Ohio, have purchased the Bull Mountain coal mine, renaming it the Signal Peak Energy mine. During a recent news conference, company officials said they hope to boost production to 13 million tons of coal per year. Two years ago, the mine produced about 250,000 tons.
“We’re very happy to be involved in the project,” said chief executive officer Wayne M. Boich. “We plan on being here for a long time. We feel we won’t have a problem selling the coal.”
The rail line is under construction and will transport coal from the mine to the BNSF Railway line at Broadview. The companies will maintain and operate the railroad spur while BNSF supplies the cars. The coal will be sent to utilities in the Midwest.
FirstEnergy has a 15-year contract to buy up to 10 million tons of coal annually from the mine and has tentative contracts with rail haulers. The coal will supply four power plants along Lake Erie and be marketed to other power plants in Ohio and Pennsylvania, company officials said.
The owners can market additional coal to other areas, including to potential customers in the West or international markets.
The Signal Peak coal will replace Powder River Basin coal burned at the Ohio plants, said Anthony J. Alexander, president and chief executive officer of FirstEnergy. Delivery of the Montana coal is to begin in late 2009 or early 2010. Coal mined in the Bull Mountains compares favorably to Powder River Basin coal because of its higher heat content, company officials said.
The Bull Mountain coal mine has been plagued by financial troubles for nearly 20 years. At one point previous owners had proposed building a coal-fired power plant on the site. The Bull Mountain mine has also been touted as a site for producing liquid fuels from coal.