With an eye on shipping coal to Asia, a Wyoming-based coal mining company has purchased a new mine site along the Wyoming-Montana border in the Powder River Basin.
Gillette-based Cloud Peak Energy Corp. announced Monday it had closed a $300 million deal for the Youngs Creek site, an area permitted yet undeveloped for coal mining and located 13 miles north of Sheridan.
“The significant coal and surface assets we acquired position Cloud Peak Energy well for future growth in our Asian exports as additional terminal capacity becomes available,” said Colin Marshall, Cloud Peak Energy president and chief executive, in a media release.
The site was purchased from Chevron USA Inc. and Consol Energy Inc. It consists of approximately 60 square miles of land holding 291 million tons of recoverable coal, Cloud Peak said.
The permitted but as-yet undeveloped site is located seven miles from Cloud Peak’s Spring Creek Mine in Montana. The new mine would extend to the border of the Spring Creek Mine to the north, extend into the Crow Indian Reservation in the west and abut the Decker Mine to the east.
Cloud Peak said it had yet to complete a mine development plan for the site.
“Future development timing and production levels are expected to depend largely on the availability of additional export terminal capacity on the West Coast and continued strong Asian demand for thermal coal,” Cloud Peak said in its release.
Cloud Peak has been one of several Powder River Basin coal producers to ship coal via Pacific Coast ports to Asia.
Cloud Peak shipped 4.3 million tons of coal to Asia in 2012 through terminals in Canada and continues to emphasize only a lack of port capacity is blocking a boost in exports.
“While demand from our Asian customers remains strong, this year’s exports will again be limited by available terminal capacity out of the Pacific Northwest,” Cloud Peak said in a quarterly report released April 30.
A number of new export terminals are in the works for Washington and Oregon, despite opposition from some local residents and environmental groups.
Groups, including the Sierra Club, are joining some local residents to argue against coal mining companies’ plans to ship millions more tons of coal to the coast by rail, citing congestion and coal dust pollution concerns.