CONSOL's $200 Million Wyoming Coal Mine Begins Permitting Process

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Researched by Industrial Info Resources (Sugar Land, Texas--As the world slowly sees signs of economic recovery, CONSOL Energy Incorporated (NYSE:CNX) (Canonsburg, Pennsylvania) and Chevron Corporation (NYSE:CVX) (San Ramon, California) are proceeding cautiously with plans to develop one of the highest quality reserves remaining in the Powder River Basin.

CONSOL and Chevron have been working together for years in the form of a joint venture company, Youngs Creek Mining LLC (Sheridan, Wyoming), to develop and operate a proposed 15 million-ton-per-year surface coal mine north of Sheridan.

The Youngs Creek property consists of 315 million tons of sub-bituminous Powder River Basin coal, with an estimated heat content of 9,350 British thermal units per pound and an average sulfur content of 0.47%.

Due to the nature of the coal in this deposit, a preparation or wash plant will not be necessary. The preliminary mine plan includes an open-pit coal mine with a crushing facility; maintenance shop; nine-mile rail spur; two to six silos; truck load-out system; haul trucks; front-end loaders; mechanical shovels; and overland conveyors.

Even though permits were submitted just three weeks ago, officials at Youngs Creek Mining LLC stress that actual mine construction will not begin until the joint venture has sufficient coal sales under contract to justify the planned $200 million investment. They anticipate the permitting process to take anywhere from one to one-and-a-half years.

Once all required permits have been obtained, it is estimated that bidding and construction will proceed accordingly, with the hope that initial operation could begin as early as late 2012 or early 2013. While the mine is being permitted for 15 million tons per year, it will most likely begin operations at a much lower capacity and ramp up production over the course of a year, or as market conditions warrant.

Youngs Creek Mining LLC has retained Aqua Terra Consultants Incorporated (Sheridan, Wyoming) to assist with the permitting and engineering for the project.

Industrial Info Resources (IIR) has been tracking this project since July 2002.

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