Cloud Peak Energy is trying to revise its 1977 permit for Youngs Creek, an idle coal mine site that sits along the Montana border and could one day provide Wyoming coal headed to Asia.
The Gillette-based company operates the Cordero Rojo and Antelope mines in Wyoming and the Spring Creek mine in Montana. It is one of the few Powder River Basin companies exporting coal to Asian markets, via a port in Canada.
Deadline for public comment on Cloud Peak’s proposed permit revision closes Wednesday and the firm hopes permitting will be complete by late this year. Potentially Youngs Creek could produce coal by 2019, ultimately providing the firm with up to 1 million tons per year, according to Cloud Peak.
Wyoming gubernatorial hopeful Sam Galeotos recently filed his support for the mine, noting Cloud Peak’s strong safety record. He also plugged for the Asian markets. Cloud Peak has only tapped Asia with its Spring Creek coal, just across the border from the Youngs Creek site.
“This proposed mine gives Wyoming the opportunity to extract high energy coal for use in Asian markets via the Pacific Northwest,” Galeotos said. “These markets are ripe for more coal imports.”
Sending coal to Asia has long been a hope for Wyoming coal producers. Nationally, coal plants have been retiring early as demand declines. The Energy Information Administration projects coal’s portion of the national electricity mix could fall to 29 percent this year.
That decline has put pressure on the Powder River Basin, which many say has more coal capacity than buyers at the moment. There hasn’t been a new lease for coal in the state since 2012.
Cloud Peak CEO Colin Marshall noted in an investor’s call earlier this month that many hope the wave of coal-fired power plant closures is coming to an end. But Marshall and others acknowledge the structural decline in the national coal market.
The hope to send coal elsewhere has only intensified for operators, miners and coal-dependent business owners in the Powder River Basin, who are desperate for new long-term customers.
There is a demand internationally. Though coal-burning plants continue to shutter in the U.S., countries like South Korea and Japan continue to build. Middle Eastern countries like Iran and Pakistan also continue to add new coal-fired plants, according to the Energy Information Administration.
But, the economics remain a problem for Wyoming mines. Hotter value coal from Montana mines — which are geographically closer to ports — continue to be the Powder River Basin source for Asian-bound coal. And the economics of coal in Wyoming are currently less than ideal.
Cloud Peak is billing Youngs Creek as part of its Spring Creek mining complex, potentially adding higher heat Wyoming coal to its marginal Asian business in 2020 to 2021.
In 2012, the coal firm bought the Youngs Creek Mining Company from Chevron for $300 million, which included 450 million tons of in-place coal and 38,800 surface acres. It has sat idle since the mid aughts, when operations and reclamation activities ceased.
The company has also applied for a permit in recent years from the Army Corps of Engineers. According to that application, mining would impact two waterways as early as 2020. Post mining reclamation was slated to begin in 2051.