Consol Plans to Expand Operation

Washington PA  Observer Reporter
6 February 2012
By Bob Niedbala, Staff writer

The largest underground coal mining complex in the nation could soon be growing larger.

Consol Energy Inc. is proceeding with plans to expand its Bailey Mine in Greene County, a project that will add a fifth longwall mining machine to its sprawling Bailey-Enlow Fork complex straddling the Greene and Washington county line.

In the company's capital budget for 2012, issued in January, the company said it would spend $205 million for projects to increase coal production including the Bailey expansion, which it refers to as the BMX Mine.

BMX will produce about 5 million tons of coal a year when the expansion reaches full production in early 2014 and will employ an additional 375 workers.

"We're seeing similar expansion (regarding coal operations) throughout the state," said George Ellis, president of the Pennsylvania Coal Association.

He cited projects by PBS Coals in Somerset County, Mepco in Greene County and Murray Energy Corp., with plans to reopen its High Quality Mine in Washington County.

"I think the expansion presupposes a strong market for coal," Ellis said. "You're not going to plan an expansion or open a new mine unless you have contracts to sell coal."

Bailey and Enlow Fork have always been among the highest producing underground mines in the nation.

In 2009, the last year figures were available, Enlow Fork and Bailey ranked number one and two, respectively, in underground production.

Enlow Fork, which mines in southern Washington County, produced about 11.1 million tons; and Bailey, which mines in western Greene County, produced about 10.2 million tons, according to the U.S. Department of Energy's Information Administration. Each mine operates two longwalls.

The company began what is called development mining, creating the entries it will need to operate a longwall, in 2010, according to the company's second quarterly report for 2010.

Coal production from development mining produced 650,000 tons of coal last year, said Lynn Seay, director of media relations, providing only a limited response in an e-mail to questions posed about the project.

Bailey now employs 303 workers; 110 were hired in 2011, and 60 to 80 more are expected to be hired this year.

According to Department of Energy, Bailey employed 780 workers and Enlow Fork employed 646 in 2009.

Coal from the two mines is now processed at one central preparation plant near Enon.

The company noted in its quarterly report costs of the expansion will be lower than starting a new mine because Bailey will use existing infrastucture and the central preparation plant.

Though not specific on where Bailey will mine, Seay said the total mineable acres will be 24,700.

The expansion will initially involve property to the east of Bailey's existing workings in Morris Township, Greene County.

Consol has proposed a new portal near Patterson Creek and McCollum roads in Morris Township that is part of the expansion project, Seay said.

The company also has filed permit applications with the state Department of Enviromental Protection to longwall a 3,135-acre block east of the village of Time that was previously permitted for development mining.

In addition, it has applied for a permit for 7,131 acres for development mining in a contiguous area stretching across Morris Township and centered roughly in Nineveh.

Greene and Washington counties are the only counties in Pennsylvania where longwalls are employed because of the nature of the Pittsburgh seam that is mined there. The seam, which has a consistent thickness and is relatively flat lying, is ideal for longwall mining.

"It's the most conducive to longwall mining, which is the most efficient method of mining today," Ellis said.

Pennsylvania coal continues to have a market in electrical power generation and steelmaking, he said. The high volatility coal produced in Pennsylvania is much preferred by steelmakers, Ellis said.

In a statement on the capital budget, J. Brett Harvey, chairman and CEO, cited the uncertainty facing the coal industry this year and noted the company has the ability to change its investment plan if necessary.

One of the biggest uncertainties facing the industry today, according to Ellis, is new air-quality regulations being imposed on coal-fired power plants, which he called the "overly-stringent regulations being promolgated by the federal Environmental Protection Agency."

During the past year, Consol also has purchased a number of properties in the area of Booth School and Rush Run roads in Morris Township.

Seay declined to comment on the purchases though township officials said they were told by the company earlier that the property would eventually be used for a coal refuse site.

The property sales stood out because of the high prices paid for the land. One parcel of 17.715 acres, for instance, sold for $800,000, or $45,159 an acre.