With the permitting process now under way for Buck Creek No 2 mine, located in the Western Kentucky region of the Illinois basin, owner Paringa Resources expects construction of the mine to begin by the second quarter of 2017, with production due to get under way by mid-2018.
“We are very pleased to have already begun the permitting process . . . [and] we are looking forward to transitioning to the construction phase of the Buck Creek mine complex,” said Paringa president and CEO David Gay, adding that Paringa continued to make progress with potential equity and debt financiers in the US.
The ASX-listed coal developer said on Friday that the No 2 mine required standard permits for mining, surface facilities, refuse storage and transportation and, based on Paringa’s experience in successfully completing the permitting process for the Buck Creek No 1 mine, it expected to secure these standard mine permits by the June quarter of next year.
The company had retained the services of consulting firm Associated Engineers for the permitting of the new coal mine.
Paringa noted that almost 60% of No 2 mine’s yearly production during the five-year sales agreement was now contracted with Louisville Gas & Electric and Kentucky Utilities.
It added that there was potential for significant reductions to the operating and capital costs at the Buck Creek mine complex, owing to continued reductions in labour, materials, supplies and fuel costs.
Further, there was potential for market conditions to improve following an unprecedented rationalisation of US coal production, and further consolidation of supply into the Ohio River market.