Texas Strip Coal Mine Comes Back to Life After 20 Years

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Researched by Loretta Clark for Industrial Info Resources (Sugar Land, Texas)--A Texas coal mine project is moving forward after being delayed almost 20 years. Dos Republicas Coal Partnership (Dos Republicas), a general partnership made up of North American Coal Corporation and Camino Real Fuels LLC, which are subsidiaries of NACCO Industries (NYSE:NC) (Mayfield Heights, Ohio), and Minera del Norte, has applied to renew/amend a permit that would let one of its partners, North American Coal Corporation, operate a 6,300-acre strip coal mine in Eagle Pass, Texas.

Industrial Info Resources has been tracking the Eagle Pass coal mine project since October 15, 1992.

According to the Texas Third Court of Appeals Web site, Dos Republicas originally applied to the Texas Railroad Commission for a permit to mine a 2,700-acre strip mine in 1992, and while it was approved in 1994, Dos Republicas did not request a permit since it did not have a coal customer.

Dos Republicas tried to sell its coal to the Comision Federal de Electricidad, a Mexican state-owned electricity provider that operates two coal-fired plants near Piedras Negras, Mexico, just across the border from Eagle Pass. In 2000, the Comision Federal de Electricidad issued a request for proposals for coal suppliers, so Dos Republicas asked the Texas Railroad Commission to issue the permit it had previously approved. The permit was issued in April 2000.

Years passed and Dos Republicas was unable to secure a coal contract so it sought to terminate its original permit as it would expire after three years. Just before the termination deadline passed, but before the termination could be completed, Dos Republicas came across another potential coal customer. The Texas Railroad Commission granted this extension, but then was met with opposition, and private parties appealed the decision. Local residents have expressed concerns that mining will harm the environment, and even though the coal will be burned at Mexican power plants across the border, U.S. border towns will still reap the benefits of the pollution.

To this day, the matter is still in court, and the Texas Railroad Commission will ultimately decide whether to renew the company's permit. However, officials with North American Coal Corporation and Dos Republicas hope and believe a permit could be granted within four months. Once the new permit is in hand, construction could begin by the end of the year or early 2013, with the first coal being shipped by January 2014.

Dos Republicas indicates there will be many contracts associated with this project, including mine equipment (such as trucks, shovels and dozers) and the design and construction of office buildings, rail loop, ponds and roads. The Eagle Pass coal mine is expected to produce 2.8-million tons per year and include a rail loadout, which is currently out for proposals for design. The loadout will include 135 box cars. The total investment capital for this project is still being determined by final design, but could easily fall within the $30 to $60 million range.

The 10,000-ton-per-day operation will create about 140 to 240 jobs.

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