North Dakota approves first new coal mine in more than 30 years

North Dakota regulators approved a permit for the state’s first new coal mine since the late 1970s.

North American Coal’s Coyote Creek Mine will cover more than 8,091 acres — about 12.6 square miles — roughly 10 miles southwest of Beulah in Mercer County.

Meanwhile, Dakota Westmoreland’s nearby Beulah Mine continues its pursuit of a new coal contract.

North American’s Coyote Creek Mining Company is developing a lignite mine in Mercer County. The mine is expected to produce 2.5 Mt/a (3 million stpy) of coal beginning in May 2016. The mine site contains some federally controlled coal seams and still needs approval from the secretary of the interior.

Mining is expected to take place at the new mine until 2040. It’s the first major new mine to be permitted since the 1970s, The Bismarck Tribune reported.

“Coyote Creek Mining Company has an extensive coal drilling data set regarding the quality of coal,” said North American spokesman David Straley. “We have taken many data samples and are confident it will meet the necessary levels required by the Coyote Station.”

The new mine will supply Coyote Station run by Otter Tail Power Company. Otter Tail made the decision to switch coal providers in 2012 on the promise that North American could deliver cheaper coal than the cooperative currently gets from Dakota Westmoreland.

Without the Coyote Station contract for 2.5 Mt (3 million st), Dakota Westmoreland will be left with a small contract for a half-million tons it ships by rail to the Heskett power plant near Mandan, owned by Montana-Dakota Utilities.

The contract with MDU also expires in 2016 and a new one is under negotiation, said MDU spokesman Mark Hanson.

Coyote Creek Mine is planning to hire about 110 workers and staff members starting in spring 2015 and going into 2016 when mining will begin, according to Straley. He said the workers will likely all be hired full time to start rather than as temporary workers as the company does for seasonal work at its other mines.

Straley said North American has not had any discussion with Dakota Westmoreland about buying the Beulah Mine, which backs up directly to Coyote Station. If it were to buy it in the future, North Dakota Public Service Commissioner Randy Christmann said the sale would have to be approved by the commission.

In March, the Public Service Commission permitted North American for 84 acres to begin building the mine’s shop, office and drag line construction. When production starts, the Coyote Creek Mine will truck the coal directly to the Coyote Station with coal haul trucks on a corridor directly from the mine, Straley said.