Rio Blanco County coal mine seeks 2,592-acre expansion
A Rio Blanco County underground coal mine that employs about 167 people is seeking to lease 2,592 acres of additional federal coal reserves that it would use to continue supplying a Utah power plant.
The Bureau of Land Management is seeking comments on an application by Blue Mountain Energy Inc., operator of the Deserado Mine, about seven miles northeast of Rangely.
The acreage is at the northern border of the mine’s coal-lease boundaries. A BLM planning document indicates the reserves, within what are called the Red Wash Tract, don’t outcrop there and would be best reached through the existing mine’s coal workings. Some surface disturbances would be required, such as for bore holes for gas monitoring and mine-ventilation shafts.
While the logical assumption is that Blue Mountain Energy would end up getting the lease, it would be offered through a competitive auction, BLM spokesman David Boyd said. The BLM also would establish a confidential, fair-market value for the lease and reject any bids that fall below that.
The BLM is undertaking an environmental assessment to evaluate impacts based on the premise that Blue Mountain Energy would receive the lease, but Boyd said a new review would occur if another company got it instead.
Blue Mountain Energy operates a longwall mine that has produced coal since 1983 and supplies the Bonanza Power Plant near Bonanza, Utah. The power plant is the mine’s sole customer.
The mine currently produces about 2.5 million to 3 million raw tons of coal per year, and it delivers about 2 million tons annually to the plant.
According to the Deserado Mine’s plan, about 14.2 million raw tons of coal are estimated to be recoverable from the Red Wash Tract, and another 10.1 million tons may be recoverable from peripheral areas, based on the results of exploratory drilling. As a result, a potential 19 million clean tons might be delivered to the power plant.
At current production rates, the Red Wash reserve could last nine years. If the company gets the lease, it might reach the reserves from its existing mine next year.
Deserado also is doing exploratory drilling in search of reserves to the west of the proposed lease area.