Published: December 15, 2021 |

West Elk mine east of Somerset in Delta County is leading mines statewide in production. (Photo: Dean Humphrey)
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After a big dip in 2020, Colorado coal production volumes are improving somewhat this year, boosted by higher demand for thermal coal used in power production as the United States and world recover economically from the worst impacts of the pandemic.

Arch Resources’ West Elk Mine is leading mines statewide in production, at about 2.12 million tons through the first nine months of the year, according to Colorado Division of Reclamation, Mining and Safety data. That puts it on a pace to exceed this year the 2.4 million tons it mined in all of 2020.

Combined, seven mines in the state produced 8.68 million tons for the first three-quarters of the year. Statewide production for the year as a whole looks like it will easily eclipse the 10.3 million tons mined in 2020, which was down from more than 13.6 million tons in 2019 and was the lowest amount of production in the state since at least the late 1970s.

The future for thermal coal production in America faces big challenges amid a push for utilities to close coal-fired power plants due to their greenhouse gas and other pollution impacts, and to convert to use of more renewable power and cleaner-burning natural gas.

Most of Colorado’s coal production involves thermal coal. The Trapper Mine outside Craig supplies the nearby Craig Station power plant and is expected to close once the first two generating units at the plant close in coming years.

Tri-State Generation and Transmission has committed to close the Colowyo Mine between Meeker and Craig, which also supplies the plant, by the end of 2031 even if it can find other customers for the mine after Craig Station’s last unit is shut down by the end of 2029.

The Deserado Mine in western Rio Blanco County supplies only the Bonanza power plant just across the Utah border, which is to close down under a legal agreement once it finishes burning 20 million tons during this decade.

Peabody Energy’s Foidel Creek Mine in Routt County will lose a nearby customer when Xcel Energy closes the nearby Hayden Station power plant by the end of 2028.

Arch Resources is now focusing on producing coal for steel and metallurgical markets, but continues to own what it calls legacy thermal coal mines, including West Elk. It said in an October news release on its third-quarter results that global and domestic thermal coal markets are “exceptionally strong at present, as countries around the world struggle to secure sufficient supplies of energy to support quickly recovering economies.”

Arch Resources’ mines in the Powder River Basin outside Colorado and at West Elk “are now effectively sold out for 2022, at record-high average pricing levels,” the company reported.

Mountain Coal Co., the Arch Resources subsidiary that runs the West Elk Mine, recently commented on the mine’s status in a letter submitted to the U.S. Forest Service on its draft management plan for the Grand Mesa, Uncompahgre and Gunnison national forests.

“While coal markets have declined over the past six to eight years, there has been improvement in the past year and MCC has increased staffing and projects its mining operations will continue to provide high-paying jobs, support of local businesses and communities, and help local economies with payments of taxes and royalties,” Weston Norris, general manager of Mountain Coal Co., said in the letter.

State data shows 213 miners working at West Elk as of September.

West Elk has capitalized over the years on export markets for its coal.

Norris pointed to improvements in both the national and export markets in contending in his letter that while two other area mines (Elk Creek and Bowie #2, both in the North Fork Valley) have closed or idled, “it is not appropriate to say that coal mining on the GMUG is on its way out.”

While the Forest Service in an environmental impact statement for its draft GMUG plan says coal leasing, development and production are expected to continue to decline during the period the new plan is in effect, Norris wrote that Mountain Coal believes the increased demand for thermal coal seen over the past year is sustainable.

Through September, the Deserado Mine has produced 1.8 million tons of coal this year, followed by Colowyo with about 1.79 million, Foidel Creek with 1.32 million and Trapper with 1.2 million.

The King II Mine in La Plata County produced nearly 333,000 tons of coal for the first nine months of the year.

The New Elk Mine, which reopened this year in Las Animas County to provide coking coal used for steel production, had produced nearly 105,000 tons through September.

Source: The Daily Sentinel

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