Company wants to ship Beluga coal to Asia

If everything falls into place in the next couple of years, ships bound for Asia could be loading coal from the Beluga coalfield west of Kenai across Cook Inlet, the head of the company managing the re-source development project said in Kenai last week.

By the second or third quarter of 2007, Alaskans could see the start to infrastructure construction, including port facilities, housing, a road and an airfield, said Bob Stiles, whose company, the DRven Corp., is acting as project development manager of the Chuitna Coal Project for its owner, the Texas-based firm PacRim Coal.

“That’s contingent on nailing down a customer,” Stiles said. “We think we are getting close, but we’re not there yet. It’s all contingent on financing, and that is contingent on customers.”

Stiles delivered his comments at Paradisos Restaurant a luncheon of the Kenai Chapter of The Support Industry Alliance on Nov. 22.

Coal is unlike other commodities, he said. It just can’t be dumped on the market. Such development projects succeed where there are long-term, reliable customers ready to buy. The situation is symbiotic.

“What the coal market needs is a long-term, stable-priced, reliable coal supply,” he said.

Right now, that market is likely Asian nations, Stiles said, though he declined to comment further about which nations they’re talking with. However, other news reports suggest those markets are likely to be in Taiwan, Japan or South Korea.

If all goes well, the first shipments of coal could leave a new port facility by late 2009 or early 2010, Stiles said.

The coal mine near the Chuitna River will be a surface mine, not a pit. Essentially, mining will involve removing any overburden, extracting the coal and putting the overburden back into the resulting hole. Because the overburden would be less compact than it was originally, it should fill the hole to the level it was before mining began, Stiles said.

PacRim owns five leases covering about 20,000 acres at the Chuitna field, which has been broken into three units called LMU’s (Logical Mining Units). The company plans to start work where the most promising deposits lie.

That’s in LMU 1, which Stiles said is believed to contain some 300 million metric tons of recoverable coal. Mining could produce between 3 million and 12 million tons per year.

When in full production, coal would be transported to the dock at Cook Inlet by a conveyor system. There, machines would be capable of loading two ships at once at a rate of about 3,000 tons per hour.

Plans call for some 300 to 350 employees. Those not choosing to live in Tyonek would be picked up and dropped off in Kenai, Stiles said.

“We can’t tell workers where to live, but we can tell them where we will pick them up and drop them off. We would prefer to have the work force living in the same political subdivision as the mine.”

If built, the Chuitna project would become Alaska’s second coal mine, the other being Usibelli’s at Healy.

The two contain virtually identical sub-bituminous deposits. Marketing coal from Chuitna, however, would not harm coal exports from the Usibelli coal mine, which goes to Asia, Stiles insisted. On the contrary, pushing Usibelli out of the market would be “the worst thing that could happen for us,” he said, because world coal markets look at producing regions as a whole.

“It is important to have more than one (producer),” Stiles said.