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By Shane Lasley
Mining News 

Mining Explorers 2009: Increasing reserves to meet demand

Usibelli closes in on nearly 1 billion tons of coal to position company for future growth

 

November 1, 2009



Usibelli Coal Mine Inc. completed a property wide reassessment of all available geologic data of its leases in the Nenana Coal Field in Interior Alaska, increasing its surface mineable coal reserves to around 700 million tons. The fourth-generation, family-owned company said future exploration and analysis is expected to push its reserves up to nearly 1 billion tons.

The coal company has been collecting information about the Nenana Coal Field since 1943, when Emil Usibelli began supplying the newly constructed Ladd Army Air Field (now Fort Wainwright) near Fairbanks with coal that he mined near Healy.

To identify the 450 million tons of proven reserves and 250 million tons of probable reserves the business reviewed data from hundreds of exploration drill holes, outcrop mapping, production data and other pertinent geologic information collected over more than six decades.

Today, the Usibelli family continues to supply coal to Fort Wainwright as well as five other coal-fired power generation plants in Interior Alaska. In addition to supplying nearly 1 million tons of coal per year to power the Alaska Railbelt, the Usibelli Mine ships about 500,000 tons annually to Pacific Rim destinations.

Defining Jumbo

With coal reserves that would last more than 400 years at current production rates, the mine has little need for an extensive exploration program.

"We have got this whole entire area on the computer so that we can look at the reserves in 3-D. So, when we pick an area that looks like it would be the most lucrative to go to, then we will go in and hit it with drill holes," said Usibelli Chief Engineer Alan Renshaw.

One such lucrative area is at Jumbo Dome, a deposit that contains several hundred million tons of coal, Renshaw said.

With a budget of about US$300,000, the 2009 drill program focused on better defining the Jumbo Mine Area, the most economical 100-million-ton-portion of Jumbo Dome, and the next deposit for which the company plans to seek permits to mine.

With reserves already established at Jumbo, the chief engineer said a 20-hole program in 2009 is focusing on better defining the pit area and coal quality prior to permitting.

Renshaw said he expects drilling in 2010 to focus on the Sandwich pit, a smaller pit about one mile from Jumbo Dome.

With its low-sulfur coal located next to established infrastructure, the Usibelli mine is well-positioned to address opportunities for new clean coal technology initiatives, such as coal-to-liquids production, and projected expansion in coal demand from the Pacific basin.

The Usibelli leases are adjacent to the Alaska Railroad, which provides year-round rail shipping to an ice-free port in Seward, Alaska, where a Usibelli affiliate, Aurora Energy Services LLC, operates a coal terminal for the Alaska Railroad Corp.

The Sub bituminous C-rank coal that is mined at Healy typically runs about 7,650 Btus per pound, with 28 percent moisture, 9 percent ash and 0.2 percent sulfur content. In addition to very low sulfur, the Healy coal is also low in mercury and other trace elements of concern, making it one of the cleanest burning coals in the world, the company said.

Joseph E. Usibelli Jr., who heads the family-owned business, said for most of the company's history, the Usibellis "have been content to assess and report reserves that are required to cover our existing markets for about 30 years."

"Recent initiatives requiring several times our current demand have pointed to the need to expand our focus to evaluate the total reserve picture throughout our lease holdings. The results show that we are well-positioned to address major increases in future demand for our coal," he added.

 

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