Post by
Coalmnr on Apr 17, 2014 11:28pm
New Elk Coal shines possible ray of light
New Elk Coal shines possible ray of light By Steve Block The Chronicle-News The 2012 halt in mining operations at the New Elk Coal Mine, located 25 miles west of Trinidad, was a serious blow to the area's economy, as approximately 200 miners lost their jobs, and some were forced to move to other locations to find employment. During a Tuesday appearance before the County Board of Commissioners, two representatives of the new management team at New Elk Coal said the mining company would begin testing some of its existing coal in a few weeks. Jeff Johnson, the new general manager of New Elk Coal Mine, said he was glad to report some positive news about the mine, which produces metallurgical, or coking, coal that's used in steel production. Johnson said the company is working hard to secure new contracts for its coal, but he said it was too early to reveal who the potential customer was. He said there hadn't been much good news about the mine lately but said that gloomy picture was beginning to change. "We have an entirely new corporate board, and we have a new chief executive officer," Johnson said. "We've had the opportunity to go after different markets, and we're really, really close in our early negotiations, and there should be some coal trucks coming into town. We'll start hauling with the coal trucks within three weeks to a month. If that goes good, then hopefully we can bring on a few more people and pick up some more contracts. We're still in early negotiations, and we can't say who it is or where the coal's going, but thinks are definitely picking up." The new leadership that Johnson referred to works at Cline mining Company, the Toronto-based firm that owns New Elk Coal. New Elk's Louis Head, a human resources manager who also works in accounting for the mining operation, added that he felt the future looked good for the mine and said its new leadership team was committed to making it successful. "We've been able to self-sustain so far, and hopefully, going forward that will continue," Head said. "we've put a lot of heart and soul into this. We've got a good team together now, again with a new board and new management, and we want to go forward and salvage what we've got and move forward in a positive manner." Head said the trucks would haul the coal to its existing outdoor storage facility near Jansen, with the hauling only being done after the school buses have completed their daily routes, so as to avoid adding to the congestion on the narrow and busy State Highway 12. The coal will then be shipped by truck to a testing facility. County Sheriff James Casias asked Head to contact his office when the hauling by truck began, so Casias could work with the Colorado State Patrol to ensure highway safety during the coal transportation process. Head said that New Elk would make an announcement once it received a signed contract to sell its metallurgical coal. He said the new management team wanted to let the community know what's going on at the mine and wanted to be good community partners. "We wanted to be up front with you, and we understand that that hasn't always been the case in the past," Head said. "We're hoping to make the best relationship that we can with the County, the City and the community. going forward, we want to have a better relationship with everybody. We hope to have better communications with everybody. That's one of our goals." Metallurgical coal must be tested to determine its various qualities and its suitability for making coke, which is used in the steelmaking process, according to the website consoleresearch.com Mining for metallurgical coal at the mine site began in 1951. Colorado Fuel & Iron (CF&I), the mine's owner, used the coal in its Pueblo steel plant until 1981, when the plant was converted to direct-electrolytic reduction of steel, which eliminated the need for metallurgical coal. The mine was sold to Wyoming Fuels in 1981, and mining continued there through 1989, although the coal preparation plant, which was built in 1984 to improve product coal specification, continued operation with coal from other nearby mines until 1996. Cline Mining purchased the New Elk Mine from a group of companies for $15.4 million, plus the assumption of $3.8 million in mine reclamation bonds. Mining resumed in 2010, and New Elk's coal-mining lease with the Colorado Department of Wildlife was nearly doubled to a total area of 29,940 acres. The mine employed more than 300 people at its peak in 2011, but a combination of low prices for metallurgical coal and weak foreign markets for its product eventually forced it to cease mining operations in July 2012. Some maintenance and office personnel were retained. Tuesday's announcements was the first good news about the mine in quite some time. The new management team, however, has some major hurdles to clear before the mine becomes profitable.