Arch Coal Continues Pursuit to Construct New Wyoming Mine

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Arch of Wyoming LLC (Hanna, Wyoming), a subsidiary of Arch Coal, Incorporated (NYSE:ACI)(Saint Louis, Missouri), is continuing with permitting of a combined surface/underground mining operation in Carbon County, Wyoming. If permitted, the Elk Mountain coal mine, which will produce Carbon Basin western bituminous coal, will be located about twelve miles southeast of Hanna, Wyoming.

Arch of Wyoming recently ceased mining operations at its two nearby coal mines, the Medicine Bow and Seminoe II mines, and is currently reclamating both of those operations.

Initial plans include developing a surface strip mine at Elk Mountain and trucking the coal about fifteen miles to the existing loadout facilities at Seminoe II. Some revamp of those facilities would be necessary to get the operation up and running. The Seminoe II and Medicine Bow mines are connected to and serviced by Union Pacific Railroad.

Eventually, development of an underground longwall mining operation, with surface coal preparation and loadout facilities at the new Elk Mountain mine site is envisioned. Estimates peg the capital cost of developing the mine between $75-100 million.

Shining positive light on the project, on March 10, 2005, Arch Coal signed an option agreement with DKRW Energy LLC (Houston, Texas), whereby DKRW would acquire the Carbon Basin coal reserves to supply six million tons per year feedstock for a minemouth coal-to-liquids (CTL) plant and 350-megawatt IGCC power plant. Arch of Wyoming would operate the new mine.

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