New Elk Coal Company

MINING PAST RETURNS TO TRINIDAD, COLO., AS ONCE-ABANDONED COAL MINE IS REOPENED

In the late 1800s and early 1900s, Trinidad, Colo., was a hotbed of underground coal-mining activity. The region was one of the best sources in the U.S. for high-quality, clean-burning, metallurgical-grade coal (usually referred to as met coal or coking coal), which is used in the steel-making process. But by 1950, most of the easy-to-get coal was gone, and so were most of the coal mines.

Now, coal mining has returned to Trinidad with the reopening of the New Elk mine. New Elk, which was previously owned by a Pueblo steel company, was the last Trinidad mine to open (1951) and the last to close (1981). The fact that it was the newest mine in the region meant some of the infrastructure was still usable, which made it more feasible to reopen when Canada-based Cline Mining went looking for new sources of met coal.

“Cline Mining bought the New Elk mine primarily to be a source of met coal for the Asian steel market,” said New Elk Mine Manager Ron Thompson. “The cost to reopen the mine is substantial, but far less than it would have been to open a brand-new mine here or somewhere else.”

Cline Mining bought the property in 2008 and began redeveloping it. New Elk coal is described in a Cline news release as a “high-volatile, high-fluidity, high-FSI (free swelling index) and low-sulfur product.” With an estimated 388 million tons of coal at the property, there’s enough recoverable coal there to last for many decades.

Early production

Today, the New Elk mine is still under construction, but it’s also already producing coal.

“We’re in what I’d call ‘early’ production,” said Thompson. “We’ve sent a preliminary shipment to a potential customer for evaluation. We’re confident it meets all specs and will be fully accepted. We expect to be in full production at the mine this summer, at a rate of 3 million tons per annum. Our intent is to stay at that level going forward, increasing as demand warrants it.”

Thompson said they will initially mine an upper seam that’s near the surface and, therefore, relatively accessible. They’ll use proceeds from that to spearhead development to advance into other available seams.

“Generally speaking, most of the seam heights we’re targeting range from about four feet to seven feet, whereas former seams from during the mining heyday here were probably more like seven to nine feet. Obviously, the larger the seam, the easier it is to mine and the better the return. That’s why the early mine companies left the seams they did. They were less profitable. We’re able to mine them today because our equipment is more productive and because the high quality of the coal brings a premium price. Those factors make it a cost-effective proposition today.”

Currently, trucks are hauling coal from the mine down to the Jansen Rail Yard near Trinidad (while the mine office is located in Trinidad, the mine itself is west of town, near Weston, Colo.). From there, the coal is transported by rail to the Gulf of Mexico for shipping overseas. Back in the day, there was a rail line connecting the mine to the rail yard — a distance of about 30 miles. The old track has been removed but the right-of-way remains. New Elk is in the process of reinstalling track, and hopes to restore the rail service by the end of this year, which will provide a significant savings in transportation costs.

Plenty of mining experience

New Elk is a 24/7 mining operation. Currently, 350 people are employed at the mine. That number is expected to increase to about 500 when it reaches full production later this year. In addition to Thompson, key people include Mine Engineer Steve Smith, Safety Manager John Lewis, Purchasing Director Al Weaver, Assistant Mine Manager Danny Miller, Plant Coordinator Gary Wright, Surface Superintendent Bobby Steele, Production Coordinator J.P. Boldt and TK Mining Mine Manager Terry Davis (New Elk contracted with TK to operate the mine).

“Our top personnel all have significant mining experience throughout Colorado and elsewhere,” noted Thompson. “All of the TK staff are highly professional as well. We’re confident in our ability to do what we say and to meet our production goals this year and beyond.”

Top equipment and Power Motive support

New Elk is an underground mine but needs mobile equipment for handling the coal after it reaches the surface. Most of that mobile fleet consists of Komatsu machines, including three WA500 wheel loaders and a WA380, two dozers (D155 and D85), a GD655 motor grader and a PC450 hydraulic excavator. The mine is also renting three 35-ton Komatsu HM350 articulated haul trucks.

“We use wheel loaders primarily to handle the coal after it comes out of the ground — from stockpile to prep plant to loading trucks,” explained Thompson. “Also, about 30 percent to 50 percent of the material that comes out of the mine is reject material (refuse rock) and we use our Komatsu front-end loaders to handle that material.

“We’ve been very pleased with the performance of all our Komatsu machines,” he added. “We went with Komatsu because it’s quality equipment, but equally important, because of the trust we have in Power Motive as a dealer. I was very impressed with the program Power Motive put together for us, which included a favorable lease option for the machines. It also included a service program (RAMP) whereby they are responsible for all our maintenance and repairs. It means we don’t have to have our own shop or staff of mechanics for mobile equipment. If there’s a problem, we call Power Motive and they take care of it — period.”

Thompson says he’s also a fan of the KOMTRAX machine-monitoring system.

“With KOMTRAX, we and Power Motive can forecast machine problems before they become evident, even to the operator. It can also be valuable in monitoring such items as idle time and fuel consumption.”

New Elk Assistant Mine Manager Danny Miller says the vast majority of his operators love the Komatsu equipment.

“They’re productive machines and they’re holding up really well. It’s an excellent product and that’s one of the main reasons we got Komatsu equipment. But, from my point-of-view, the biggest factor in buying equipment is the service we get from the dealer and how they take care of issues that arise. Frankly, for what I want and need, Power Motive blows away the other guys when it comes to service.

“What I really like is that it just takes one call to our Power Motive Sales Rep Dan Tafoya, and that’s all I have to do. Whether it’s a new machine, a rental machine, a mechanic or a part — I call Dan and he takes care of it. No hassles. No finger pointing. No passing the buck. No excuses. Power Motive makes doing business with them easy.”

Full speed ahead

For Cline Mining, the reopening of the New Elk mine is a big step, but it’s just the first step of what they anticipate will be many. Prior to this project, Cline was known primarily for exploration and development. The New Elk mine is its first venture as a producer. Cline President Ken Bates told Coal Age magazine that the 3 million tons-per-year target is just the beginning.

“We’re aiming to go further with New Elk by doubling its production over time to 6 million tons per year,” said Bates. “During the next few years, we’re looking to develop other properties in Colorado and elsewhere to reach at least 10 million tons per year.”

He added that Trinidad city leaders and the business community are big supporters of Cline’s efforts at New Elk as well. And although Trinidad may never again be the boom town it was 100 years ago, 500 high-paying mining jobs will certainly be a huge economic boost to the community of 10,000.