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Blankenberger moving forward with new underground coal mine in Indiana

Highlights

Permitted mine could come online in 2020 or 2021

Owners eyeing export market for roughly 11,500 Btu/lb coal

Louisville, Kentucky — The Illinois Basin appears poised to welcome a second major new underground coal mine with the decision by Blankenberger Brothers to start construction later this year on a 3.5 million st/year, 11,300-11,500 Btu/lb underground mine in Pike County, Indiana.

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Donnie Blankenberger, president of the family owned excavation company in Cynthiana, Indiana, told S&P Global Platts in a Wednesday interview that 2019 should be the year the company finally moves forward with a project that has been on the drawing board for several years.

The mine will be developed by Blankenberger's BB Mining subsidiary, which has mined previously in southern Indiana.

The company is in discussions with potential offtake customers and expects some positive developments over the next couple of months, he said.

Blankenberger is eyeing the strong US export market for the mine's coal, although he did not elaborate about potential destinations. He predicted the mine will be among the lowest-cost producers in the region, which should make it competitive with other ILB companies selling into the seaborne market.

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In addition to the mine's Btu content, the coal's specifications include an average of 6 lb SO2/MMBtu.

Construction on the room-and-pillar operation is estimated to take about 18 months or so. Depending on whether construction commences before mid-year or late in 2019, initial production could come in late 2020 or 2021.

The mine is fully permitted. In September 2016, Blankenberger Brothers was issued a final permit by the Indiana Department of Natural Resources' Division of Reclamation covering just under 1,000 shadow acres for the proposed project.

The new mine will be the second coal mine developed in the region in recent years.

Australia's Paringa Resources has begun production at its Poplar Grove underground mine near the Green River in McLean County, Kentucky. Paringa has sales commitments in excess of 5 million st for Poplar Grove, including a "cornerstone" 4.75 million st, five-year agreement with Kentucky's two largest electric utilities, Louisville Gas & Electric and Kentucky Utilities.

Hallador Energy's Sunrise Coal subsidiary recently was issued a final permit for its proposed Bulldog underground mine near Allerton in Vermilion County, Illinois.

The company has said Bulldog also would be in the range of 3 million st/year. However, Hallador/Sunrise have not released a definitive schedule for developing the mine.

-- Bob Matyi, newsdesk@spglobal.com

-- Edited by Derek Sands, newsdesk@spglobal.com