Deer Run Mine

From Global Energy Monitor
This article is part of the Global Coal Mine Tracker, a project of Global Energy Monitor.
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Deer Run Mine (also known as Hillsboro Deer Run Mine) is a U.S. underground coal mine near Hillsboro in Montgomery County, Illinois.[1] The mine is owned by Hillsboro Energy LLC, an affiliate of the Cline Group, and is operated by Patton Mining LLC. Foresight Energy was the mine's sole coal producer until 2015, when Murray Energy acquired a significant economic interest in Foresight.[2]

After being idle since March 2015, the Deer Run mine resumed production in January 2019.[1]

Location

The below satellite image shows the location of the Deer Run mine near Hillsboro, Illinois.

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Background

In 2009, Deer Run Mine was permitted to Hillsboro Energy, LLC, an affiliate of the Cline Group. According to the Cline Group, the mine would have the potential to produce roughly 8 to 10 million tons per year when the longwall mining was in full production. The estimated life of the mine is expected to exceed 20 years.[3]

Digging began, despite legal challenges

In April 2011, the Cline Group began digging at the site. The early production involved removing “development coal” to allow for construction of the underground mine. At the time, the mine was the subject of a 2-year-old appeal of its operating permit. The appeal was filed in early 2009 by a group of landowners called Citizens Against Longwall Mining (CALM) who contended that the longwall mining method to be used at Deer Run would damage farmland by causing long-term mine subsidence.[4]

Coal reserve purchases

In February 2012, Natural Resource Partners made its fifth purchase (out of a planned seven purchases) of coal reserves at the Deer Run mine. The company bought the reserves from Colt LLC, an affiliate of the Cline Group. At that time, Natural Resource Partners indicated that the construction of the new longwall mine was underway and that the company expected to start digging for coal in early 2012.[5]

By August 2012, Natural Resource Partners had completed a total of $255 million worth of purchases for approximately 200 million tons of reserves.[6] Natural Resource Partners L.P. is principally engaged in owning and managing mineral reserve properties. The company owns coal reserves and coal handling and transportation infrastructure in Appalachia, the Illinois Basin and the Powder River Basin.[5]

In November 2015, the two parties became embroiled in a lawsuit. Foresight leases the coal rights from NRP for royalty payments, or in the event no coal is being mined, minimum payments in lieu of royalty. When the mine was idled in March 2015 by an underground combustion event, Foresight claimed the fire was an act of God, terminating the lease. NRP disagreed, and filed a lawsuit. The lawsuit was pending for years before a settlement was finally reached in October 2018.[7]

Mine Production

Patton Mining LLC began operations in August 2012 on one longwall system with a productive capacity of 9 million tons per year. Transportation was by rail (Norfolk Southern and Union Pacific), and barge on the Ohio River and Mississippi River (via truck or railroad).[1] In 2014, the mine produced 5.6 million short tons—the sixth highest amount within the Illinois Basin.[8]

Environmental Issues

Coal slurry impoundment

According to Citizens Against Longwall Mining, when Hillsboro Energy got the go-ahead to build the coal mine, the permit application approved by the Illinois DNR’s Office of Mines and Minerals made no mention of a coal slurry impoundment to be located within the city of Hillsboro. yet in November 2011 it was revealed that the mine would store hundreds of millions of gallons of coal slurry—the liquid waste product leftover after coal is processed—into an 80-feet-tall impoundment that will cover over one square mile. It is rated as a High Hazard dam, meaning that if the coal slurry impoundment were to fail, it would result in massive loss of life and property in Hillsboro and Schram City, and could send pollution downstream into Old Lake Hillsboro. The coal slurry impoundment will last the mine fewer than five years, meaning a new impoundment may then be built.

CALM also says that Deer Run used the Insignificant Permit Revision and Incidental Boundary Revision process to receive approval from the Illinois DNR to build the base of the High Hazard coal slurry impoundment and begin dumping coal slurry there before any opportunity for public comment, and before the mine received a dam permit from the DNR’s Office of Water Resources.

At an August 13, 2011 Office of Mines and Minerals public informal conference on the proposed coal slurry impoundment, local residents raised their concern that the Public Notice for the dam permit was not publicized, and asked the Illinois DNR to stop slurry disposal and dam construction activities by the mine until the issue was resolved. Instead, the Illinois DNR’s Office of Water Resources rescinded its original Cease and Desist Order and opted to grant Deer Run Mine an Emergency Dam Permit which allowed the mine to proceed with building the High Hazard Dam before the agency considered comments from the public.[9]

In November 2011, publicly available data showed the mine had violated its water pollution permit 24 times.[9]

Mine idled in 2015, reopened in 2019

In July 2014, operations were suspended at the Deer Run mine due to high carbon monoxide readings, indicating an underground fire.[10] This fire was extinguished, but on March 26, 2015, the Mine Safety and Health Administration ordered the mine shut after high carbon monoxide levels were found again. The mine was essentially idled as further efforts were made to smother the fires. They were unsuccessful and hotspots in the same area were detected in 2017. Foresight Energy submitted plans to permanently seal the initial longwall, abandoning up to $67 million worth of equipment inside, in December of 2017.[11]

After being idle since March 2015, the Deer Run mine resumed production in January 2019 with one continuous miner unit. This miner unit is developing longwall gate entries to allow for the potential resumption of longwall mining.[1]

Citizen Groups

Project Details

  • Sponsor: Hillsboro Energy/Patton Mining LLC
  • Parent Company: Foresight Energy LLC, as a joint venture with Murray Energy
  • Location: Montgomery County, Illinois, United States
  • GPS Coordinates: 39.1443698, -89.4670799 (exact)
  • Status: Operating
  • Production Capacity: .19 million tons per year (2019)
  • Total Resource:
  • Mineable Reserves: 322.1 million tons (total for the complex)
  • Coal type: High-sulfur
  • Mine Size:
  • Mine Type: Underground
  • Start Year: 2012, 2019
  • Source of Financing:

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References

  1. 1.0 1.1 1.2 1.3 Operations: Mines Foresight Energy, accessed November 2019.
  2. About Foresight Energy, accessed November 2019.
  3. "NRP's Headway for Illinois Buyout" Zacks Investment Research, Jan. 18, 2011.
  4. Tim Landis, "Deer Run producing 'development coal'" State Journal Register, Apr 26, 2011.
  5. 5.0 5.1 "Natural Resource Partners L.P. Completes Fifth Acquisition of Coal Reserves at Deer Run Mine in Illinois Basin" MarketWatch, Feb. 2, 2012.
  6. "Natural Resource Partners makes final Deer Run coal reserve buy" Transmission Hub, Aug. 22, 2012.
  7. "Settlement Agreement Reached In Deer Run Suit" The Journal News, Oct. 28, 2018.
  8. "Deer Run, other Illinois Basin mines could change coal market dynamics" S&P Global Platts, April, 19 2017.
  9. 9.0 9.1 "Deer Run Mine to Construct High Hazard Coal Slurry Impoundment in City of Hillsboro" Citizens Against Longwall Mining, accessed Nov. 2011.
  10. "Foresight Energy LP Reports Fire at its Hillsboro Mine" MarketWatch, July 17, 2014.
  11. "Foresight's Deer Run coal mine in Illinois beset with carbon monoxide issues" S&P Global Platts, Dec. 26, 2017.

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