Oxbow moves toward opening second mine
Oxbow Mining LLC is looking at opening another mine on much-mined Oak Mesa in Delta County.
Oxbow applied for permits to drill in the area to determine the amount of coal remaining on Oak Mesa. Oxbow is considering where to mine next after its coal mine near Somerset plays out, said Brad Goldstein, director of corporate affairs.
The reasons to consider mining on Oak Mesa are twofold, Goldstein said. The area has a long history of coal mining, and Oxbow has a ready supply of miners who will need work once the recoverable coal in Elk Creek Mine is removed.
“We don’t want to have to relocate the entire work force offshore,” Goldstein said.
Delta County, with an 11.6 percent unemployment rate, has another reason to welcome a new mine for the 361 people who now work at the Elk Creek Mine. Though the Elk Creek Mine has been associated with Delta County, the coal actually is removed from beneath Gunnison County, which receives the mine’s taxes. In previous years, the mine has run beneath Delta County, resulting in revenue to that county, but mining has been in Gunnison County in recent years.
Delta County does have a working mine within its boundaries, the Bowie Resources No. 2 mine, but Bowie Resources is in arrears on property taxes it owes Delta County. This is the second year that Bowie Resources has failed to pay its taxes on time, even though the company late last year received an infusion of $1 million from a Seattle-based company. Bowie Resources used the money to restart the mine.
In 2010, Bowie, the county’s largest taxpayer, caught up with its delinquent taxes in March and April, presenting checks of $550,000 in each of those months.
Bowie is setting up its longwall equipment that scrapes large swaths of coal from the mine wall, and it hopes to resume operations in the next few weeks, Delta County Treasurer Jim Ventrello said.
Ventrello has yet to discuss the potential of a new mine with Oxbow, but he said he would welcome it because coal mines “are a great source of revenue and good jobs.”
Oxbow filed for Bureau of Land Management permits for exploratory drilling, but those permits most likely won’t be in place until next year, said Randy Litwiller, Oxbow vice president. Litwiller and other Oxbow officials have met with property owners in the Oak Mesa area, and they met Tuesday with the Delta Area Chamber of Commerce.
It could take five years to complete the permitting for an Oak Mesa mine, BLM officials said.
Oxbow is trying to extend the life of the Elk Creek Mine for as long as a year. It produces about 5 million tons of coal a year.
A U.S. Geological Survey study in 2000 estimated there were more than 744 million recoverable tons of coal in the North Fork Valley, which accounts for about 40 percent of Colorado’s coal production.
Some of the old mines under Oak Mesa weren’t mapped, so Oxbow remains unsure of the size of the resource, Goldstein said.