McLeansboro Times-Leader

Local

November 17, 2011

Construction of coal mine continues

White Oak president: Hiring of supervisors, miners about a year away

PIOPOLIS — Hiring of coal miners and supervisors could be under way by the third quarter of 2012, the president of the company building a new coal mine in Hamilton County said.

“We are creating jobs ... that your kids, grandkids, nieces and nephews will be able to work for a long time,” Scott Spears of White Oak Resources told a Hamilton County Chamber of Commerce audience Saturday night at St. John’s Catholic Church.

Construction of the longwall mining operation northwest of McLeansboro began in April, and Spears provided a progress update at the annual Chamber of Commerce Dinner.

He also dispelled rumors about his company’s continued involvement with the project, noting that White Oak closed Sept. 22 on financing with Alliance Resource Partners, L.P. The company  is a diversified coal producer and marketer with mining operations in Kentucky, Indiana, West Virginia and Maryland as well as Illinois, according to information on the company’s Web site.

ARLP has committed $140 million to acquire and fund development of 200 million tons of coal reserves related to White Oak’s Mine No. 1; up to $110 million to acquire surface rights and construct the coal-handling, preparation plant, rail and coal-loading facilities to support Mine No. 1; and a minimum of $150 million, up to a maximum $275 million, for a preferred equity interest in White Oak, according to published reports.

While ARLP will operate the above-mentioned surface facilities and be “the sole provider of coal preparation and handling services,” White Oak continues its involvement in other aspects of the operation, published reports indicated.

“People who’ve heard rumors that we sold out — we did not,” Spears said.

The market for Illinois Basin coal has “improved dramatically,” he said. Production costs for this quality coal have increased dramatically in the East, a lot of marginal-quality coal is being shipped overseas and “the world is craving this quality coal,” he said.

The Hamilton County mine project was first identified in 2005, and the company to spearhead the project formed in 2006, said Spears, who joined the company about three years ago.

“We have accomplished a lot in the last three years,” he said.

White Oak is anticipating a life of 25 years for its first mine, and has enough coal reserves for multiple mines, he said.

The 350 expected to be employed at Mine No. 1 will include a mix of experienced and new miners, Spears said.

“My goal would be 80 to 100 (experienced) miners, and we’d work on training the rest,” he said.

White Oak’s local staff has increased from seven at the start of the year to 46 since then, Spears said. And 75 percent of those employees are from Hamilton County or elsewhere in Southern Illinois, he added.

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