Gas line affect Usibelli Coal business

Posted: Sunday, November 05, 2000

FAIRBANKS (AP) -- Usibelli Coal Mine Inc. is keeping an eye on proposed North Slope natural gas projects, which could pose a long-term threat to the company, company officials say.

It's too early to tell how much of a threat, said Steve Denton, Usibelli vice president of engineering, but natural gas has been replacing coal-fired electric generators in the United States and elsewhere.

''It's pretty hard for us to come up with a plan until we know what we have,'' Denton said. ''If I had to guess at things, I say we're pretty stable for the next couple of years.''

In fact, Healy-based Usibelli could benefit from economic growth and social unrest in Asian countries, company officials said.

China's economic boom is keeping its coal at home and making it unavailable for Korea, one of Usibelli's major customers. Labor strikes at some Indonesian coal mines have stopped production.

''The Koreans had to scramble from time to time to fill their stockpiles with coal,'' Denton said. ''We see the supplies become a little bit tighter in years to come, but don't know how long.''

Alaska has huge coal reserves that could make the state a reliable supplier for hundreds of years, he said.

Usibelli ships about 1.4 million tons of coal a year to seven major customers, said Ernie Siemoneit, Usibelli senior project engineer.

Currently, the company is closing its Poker Flats mine and opening its Two Bulls mine. That's keeping Usibelli workers busy, Denton said. A coal mine's life is 20 to 30 years, he said.

''It's a once-in-a-career thing,'' Denton said.

The Two Bulls mine has 30 million tons of coal, and Usibelli expects to find more, he said.

The switchover to the new mine will take four to five years. Most of the current work at Poker Flats is reclamation, which should be complete by 2010, Siemoneit said at the Alaska Miners Association annual convention.

Usibelli submitted bids for lease of more than 12,400 acres of state land north of their existing leases, Denton said. The state will announce Monday if Usibelli won the bid.

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