Ooops.. wrong article.
Here is the correct one.
Las Animas County may see the beginnings of an economic recovery sooner than later if changes made at the Weston coal mine come to fruition.
Dave Stone, chief operation officer of the New Elk Coal Mine, said on Tuesday, “Everything is right to reopen.”
Stone has been working with Cline Mining for the past 16 weeks, making the drastic changes needed to reopen the mine and rehire employees. “I have redone the whole mining plan on a mining engineering basis from first principles,” he said, adding that “targets had successively not been hit and thus we were unable to sell the coal in the time” when they were in an undersupply environment and that the company was ready to go with a new action plan.
He said there are four interested parties in the metallurgical coal that New Elk produces and based on these tentative contracts, the mine is working on an internal plan to try to reopen in the first quarter of 2013.
After a site visit to the mine, an analysis by Dundee Capital Markets, Dundee Securities Ltd., reported that “production could start almost immediately upon the announcement of coal sales and would ramp up progressively with the manpower rehires planned in stages over a four month period.”
Currently 22 people are employed at the mine. Those employees include tradesmen and mining supervisors who are doing the care and maintenance but are also preparing the actions from the action plan for reimplementation. Stone said they are working on “the action plan implementation,” and there will be “a lot of changes” when the mine reopens.
He said many past employees were paid traveling expenses, but with the new plan, families would get incentives to move to Trinidad “with a bonus system place” to get workers to move to town.
New Elk employed 330 people at its peak in early May 2012. The first layoffs of 75 occurred May 18 and the layoff of 200 occurred July 13. But if everything works the way Stone thinks it will, the mine’s rephrased plan would hire 50-60 workers or one section within 30 days of securing a sales agreement and 60 days after later, will hire another section and again hire 50 employees in the next 60 days, repeating the same in another 60 days. “We will end up with four full sections with 300 people,” said Stone.
In Stone’s new plan, he anticipates within 18 months to two years bringing in a longwall crew and longwall equipment. In longwall mining, a cutting head moves back and forth across a panel of coal about 800 feet in width and up to 7,000 feet in length. The coal falls onto a flexible conveyor for removal. Longwall mining is done hydraulic roof supports (shields) that are advanced as the seam is cut. The roof in the mined out areas falls as the shields advances, according to the United Mine Workers of America website.
Stone hopes to have “two mines, two prep plants and two longwalls and 700 people. That’s our goal.” However, he stressed that the market will determine whether the company’s goal is met.
According to Stone, in the global market, China has pulled back to control its real estate prices and are undergoing a government transition and the United States market has slowed down so there now is more coal available than is demanded. Currently there is about 2.1 million tons of coal stockpiled at the ports in China, whereas at the start of the year, there was only 1.75 million tons and this has “lead to an oversupply in the coking coal market.”
Globally, 247 million tons of coking coal is traded annually and as the market has softened, Stone said, “New Elk has never put coal on the ground and as the markets turned, New Elk was trying to sell its coal in a market that was extremely tough.”
He said, “There was always an underlying concern that the mine could not do what it says it going to do,” and the reasons the analysts came to site to “see if they thought we could do what we said we could do.”
According to the Dundee report, New Elk has put into place a very good team to run the mine. “It is ready for production once coal sales are secured and a solid ramp-up plan is in place to ensure production targets can be met consistently.”
The report also states Cline’s three major objectives: to sell the met coal stockpile that currently sits on site, to secure long-term sales and contracts, and to restart production. “Coal production is now being driven by sales rather than production capacity and will remain this way until coal markets are turn and sales contracts are established.”
“I just need the community to know we are working on it and we’re not dragging our feet. We want to get back to work. We want to get people back to work. But they need to know that when we open we are going to open differently,” said Stone.
Stone said there is going to be an expectation that the behaviors and performance will be different. “They will be outcome focused,” he said.