Western Kentucky Minerals

HARD WORK, NOT LUCK, HAS LED TO SUCCESS FOR THIS COAL MINING OPERATION NEAR OWENSBORO

Dec 10, 2013

Komatsu dozers and trucks help mine the coal cost-effectively

To friends and acquaintances in the Philpot/ Knottsville area east of Owensboro, Ky., Tony Lanham is sometimes referred to as “Lucky” Lanham because of his success in business, specifically, in coal mining. But in reality, luck has had very little to do with Lanham’s accomplishments.

“My grandfather had an underground coal mine in Daviess County that he ran from the 1920s until he passed away in 1970,” Lanham recalled. “After he passed away, I worked for another company throughout the ‘70s. In 1981, we drilled and discovered coal on my dad’s farm. We worked that until 1989, when my dad sold it. I bought it back in 1991 and ran it until 1999, when I sold it because the market had dropped. Once my five-year non-compete expired, coal prices were on their way up, so I started Western Kentucky Minerals (WKM) in 2005.”

Lanham started WKM with just a handful of employees. Today, the company has between 45-50 people on the payroll and another 35 or so contractors working at the mine sites, which are a 24-hour-per-day operations. Western Kentucky Minerals produces nearly 50,000-tons of coal per month, most of which goes to Owensboro Municipal Utilities and Kentucky Utilities as fuel for their power plants.

To some observers, Lanham was “lucky” to get in and out of business at the right time, but that was due much more to his study and understanding of the coal industry than to good fortune. And, as is always the case, any luck he did have was significantly enhanced by hard work.

“To say that dad is lucky is to greatly underestimate him,” said Tony’s son Brandon Lanham, who, along with his brother Jordan, are foremen at the company’s two active pits (other family members in the business include Tony’s daughter Tonea and son-in-law Corey Scarbrough). “We’re working owners. Nobody spends all day in the office. We’re out on the job.”

“Dad primarily handles the financial side of the company including coal sales and equipment, but he keeps his boots on all the time,” added Jordan. “If we’re busy and need him to do anything in the pits, we call him, and he’s right on it. That’s the work ethic we pride ourselves on, and it definitely starts at the top.”

Employees are “a cut above”

It starts at the top but doesn’t end there. Tony says Western Kentucky Minerals’ greatest asset is its employees.

“I think we have by far the best coal mining team in the region,” said Lanham. “Most of our guys have a farm background, which is ideal because they have a great work ethic, and they tend to know equipment.”

“The quality of our employees is a cut above,” said Brandon. “We have experienced hands at every position. They don’t need us looking over their shoulder all day long. The best way to put it is that all of our guys are leaders. They could all be running jobs, and I don’t think you see that at a lot of other places.”

“Those guys came here because of dad,” said Jordan. “Many had worked with him previously. It’s because of his reputation, credibility and the respect he has within the industry and the community that we were able to attract the work force we have.”

“Tony is a successful entrepreneur who knows how to treat people and knows how to get things done,” added Mine Superintendent Greg Wettstain, who, along with Brandon and Jordan, also has an ownership stake in WKM. “He also knows how to surround himself with good people and let them do what they do best.”

Western Kentucky Minerals pays its people well and provides full benefits. In addition, the company offers small perks such as a free catered lunch for employees each Wednesday and breakfast on Saturday mornings.

“Everybody likes a little love,” said Lanham. “In addition to good pay, benefits and steady employment, things like the lunches are a way to show our guys that we respect them and appreciate what they do for us. As a result, our turnover rate is essentially zero. I’ve got guys that I hired in 1975 who are still with me today.“

Komatsu trucks and dozers

To help mine the coal cost-effectively, Western Kentucky Minerals has turned largely to Komatsu dozers and trucks from Brandeis Machinery’s Evansville branch. The company has five working Komatsu dozers (three D475s, a new D375 and a D65) plus a spare dozer for parts. The company also has six 100-ton rigid frame haul trucks (two Komatsu HD785s and four Haulpak 330Ms).

“When we started in 2006, trucks were hard to come by,” Lanham recalled. “Fortunately, Brandeis had some, and it’s worked out really well for us because they’ve been outstanding trucks – they are rugged, reliable, and repairs have been minimal. They’re also fuel efficient. We’ve been very pleased with our Komatsu trucks.”

“We use the big Komatsu dozers to remove overburden, and they’ve also worked well,” said Wettstain. “The D475s and D375 do a good job pushing large amounts of material. We try to use them in tandem to maximize production.”

“Komatsu makes good equipment, and that’s definitely important to us, but equally important, and maybe even more so, is the support we get from Brandeis,” said Lanham. “Our Brandeis Sales Rep Dustin Olander and Product Support Rep Joe Barnard go out of their way to make sure we get what we need to be successful, whether it’s parts, heavy repairs, or undercarriage or electrical work. Brandeis is always there for us, and we appreciate the way they stand behind their products and work with us to get the most out of the machines.”

Doing more for less

This isn’t the best time to be a coal miner. Prices are at a multi-year low, but Lanham says WKM is holding its head up.

“We’ve got some advantages over coal producers in some other regions. Our production costs are fairly low compared to some areas. Another factor is that while we’re in the Illinois Basin, ours isn’t typical Illinois Basin coal, which tends to be high in chlorine. We’re low chlorine and low mercury. We also blend and wash our coal as necessary so when the customer gets it, it meets his spec and is ready to burn.”

Lanham says WKM is also on a continual production improvement program, which entails learning to work smarter.

“In any business, it’s crucial to keep trying to become more efficient, which for us means producing more coal in less time or for less money. For years, we’ve measured how much diesel fuel it takes to produce a ton of coal. The answer is three gallons. Now, we’re trying to reduce that to 2.5 gallons. Komatsu equipment helps, and we’re looking to shorten our haul. We’re re-examining everything with an eye toward greater efficiency.”

Western Kentucky Minerals has won a number of reclamation awards. “We don’t ruin property, we improve it,” said Lanham. “We mine farmland, and we return it as farmland, but in better condition because we’ve brought the hollows up so it’s easier to plant and harvest.”

Lanham says he believes the current regulatory climate surrounding coal is unjust. “As an industry, I think we’re being unfairly and unreasonable attacked. Steps are being taken to clean up coal emissions and take care of other issues. I’d like to see the government slow down a little on regulations and enforcement, or they’re going to negatively impact our entire economy. We all want the lights to turn on when we flip a switch, and we don’t want to pay an-arm-and-a-leg for it. Coal is such a cost-effective fuel – it’s one of the reasons our energy is as cheap as it is.”

Because of increased regulations and competition from other fuels such as natural gas, Lanham acknowledges that coal mining today is difficult.

“Maybe it does take some luck to succeed. It’s certainly a challenge, but one I enjoy. For me, the pros definitely outweigh the cons. And one of the biggest pros, from my point-of-view, is being able to provide good jobs for good people. I truly believe coal mining helps the nation in general and this community in particular, and that makes me feel good about what we do.”