Customers in Action

Coal Contractors (1991)

THIS COMPANY IS SURFACE-MINING FORMER UNDERGROUND-MINE PROPERTIES IN NORTHEASTERN PENNSYLVANIA

December 17, 2014

“First of all, we wanted the best truck.”

Coal Contractors (1991)

Anthracite coal was first discovered in northeastern Pennsylvania during the Revolutionary War period. Anthracite has the highest carbon content, burns the cleanest and produces the most energy/weight of any type of coal. Because of its high carbon content, anthracite is the preferred coal for the steel industry, metal reduction and water purification. It also has a high BTU value and clean-burning characteristics, so it’s a good heat source and is commonly used by residential and institutional customers in Pennsylvania and other northeastern states.

Anthracite constitutes only about 1 percent of the world’s coal reserves. Due to the high quality and relative scarcity, anthracite is also the most expensive type of coal. Northeastern Pennsylvania is far-and-away the largest anthracite-producing region in the United States. A multi-county region northwest of Philadelphia and south of Wilkes-Barre is ground zero for anthracite in North America.

As the oldest and hardest coal, anthracite tends to be located deeper in the ground than its younger and softer cousins, bituminous, sub-bituminous and lignite, which means anthracite was traditionally deep-mined (underground mining). The deep-mining heyday in northeastern Pennsylvania occurred during the late 1800s and early 1900s. By 1960, underground mining for anthracite had largely disappeared.

Since then, improved surface-mining techniques have allowed companies to go back in and re-mine properties that had previously been deep-mined. That’s what Coal Contractors (1991), Inc., a wholly owned subsidiary of Great Britain-based Atlantic Coal plc, is doing at the Stockton Mine near Hazleton, Pa.

“For the most part, the deep miners 100 years ago took the coal that was the easiest to get,” said Raymond Petrilla, VP of Finance for Coal Contractors. “They left about 50 percent of the original seams. Today, with improved exploration and mining techniques, we’re able to go back in and cost-effectively mine many of those properties.”

High-quality coal/dependable supplier

Coal Contractors (1991)

Coal Contractors has been mining the 600- plus acre Stockton site since 2000. It had previously mined and has nearly completed reclamation at the Gowen Mine near Nuremburg, Pa. The ratio of overburden to coal at Stockton is a little more than 10-1. There are more than 2 million tons of reserves remaining at the site.

“The quality of our anthracite is some of the best anywhere,” said Petrilla. “It’s very consistent. We meet customer’s specs every time, and we pride ourselves on our dependability. If we say we’re going to deliver coal to you, we’re going to deliver the coal. We have a rail loading facility a few miles from the mine, so when we need to ship by rail, we’ll truck to that facility. The rail can take it to barges for shipping to steel plants or to ports if it’s for export.”

The mine operates two 10-hour shifts per day, five days per week. The prep plant runs three shifts per day, one of which is for maintenance. Between the mine and prep plant, the Stockton Mine employs about 80 people. Coal Contractors is mining the site to a max depth of about 550 feet.

This year, the company expects to produce approximately 390,000 tons of raw coal, also known as run-of-mine or ROM, which includes dirt and impurities. Coal Contractors will process the raw coal into about 180,000 tons of clean coal for sale. To reach that number, it may have to move about 3.5 million cubic yards of overburden.

Derek Smibert manages the mine with help from Superintendent Derrek Singley. Smibert, who has more than 25 years of coal-mining experience across the world, including Great Britain and Mongolia, as well as the United States, has brought significant management expertise to the Stockton Mine.

“It’s all about figuring out how to load trucks and get them out of the pit in the most efficient manner,” said Smibert. “We don’t have a lot of room here, which means we have some steeper-than-ideal ramps. I’ve tried to redesign our ramps for maximum efficiency. Right now, we’re running at about a 10 percent grade. Even a small grade improvement can mean big savings.

“For example, we want a ramp incline that minimizes transmission shifts,” he explained. “Why? Because shifting creates transmission wear. If we can have even one less gear change per cycle, it can extend a transmission’s life by thousands of hours. We’ve also tried to improve the roads. A bad road causes premature tire wear and worsens fuel economy. It also beats up the truck and wears out the driver, making him less productive. Some seemingly small things like those can make a big difference to the bottom line.”

Smibert is also responsible for safety at the Stockton Mine. He says that’s the top priority for Coal Contractors and its parent company, Atlantic Coal plc.

“We have regular workforce safety meetings every two months to go over any issues and concerns. We’re in the process of instituting daily tool-box safety talks. I’m also working to improve the accident investigation process with the goal to prevent similar accidents from happening again.”

Komatsu trucks and Midlantic support

Coal Contractors (1991)

In order to improve productivity, the Stockton Mine recently added six new Komatsu HD785 (100-ton) rigid-frame haul trucks.

“Our old trucks simply weren’t providing the uptime availability we needed to be successful,” said Smibert. “Some of them were only working about 60 percent of the time. I told Atlantic Coal that we needed at least 95 percent availability to achieve the production levels they wanted. With the new Komatsu trucks, we’re probably at 99 percent availability. Of course, they’re still very new, but we’ve done little to nothing to them at this point.”

“We looked at various manufacturers and distributors before selecting Komatsu trucks from Midlantic Machinery,” said Petrilla. “First of all, we wanted the best truck. Komatsu haulers have an excellent reputation for performance. In addition, the price was attractive and Komatsu Financial was easy to work with and offered us favorable terms.

“Equally important, we wanted a dealer we could count on,” he added. “With Midlantic and our Sales Rep Tim Reilly, we’re confident they will be there for us if any issues occur. We’ve had a good working relationship with Tim and Midlantic for many years. They have good parts availability and good service. With two nearby branches, Frackville and Wilkes-Barre, we’re confident the support will be there if and when we need it.”

Operator Mark Koziol drives one of the new HD785s every day he’s on the job. “I love the way it handles. Everything I want it to do, it does. As soon as I touch the steering, it moves. As soon as I touch the retarder, it responds. Everything is immediate. Also, the smoothness of the ride and the comfort of the machine are great. I can work 10 hours and not feel as though I’ve been in a heavyweight fight. The Komatsu HD785 is a pleasure to drive, and it makes us more productive.”

In addition to the trucks, Coal Contractors also has a Komatsu PC2000 excavator and a Komatsu WA500 wheel loader.

“We bought the PC2000 used, for overburden removal, and it’s been an excellent machine,” said Petrilla. “We use the WA500 at the plant to load trucks. We had our operators demo it, and they said it was a good loader. Then when we compared the price and other factors, it was pretty clear to us that the Komatsu WA500 was the way to go.”

Future growth likely

Coal Contractors estimates it has seven or eight years of reserves remaining at the Stockton Mine. The company’s plan is to continue to improve the operation throughout that time period.

“In terms of productivity and profitability, we’re not where we want to be or where we intend to be, but we’re getting there,” said Smibert. “The good news is we have a very high-quality coal product. Because of its high fixed-carbon content, it’s in demand from steel companies and others. We take care to be sure it meets our customers’ specifications, and we’re always willing to verify that through independent labs.”

“We’re also still growing,” said Petrilla. “We’re already working to permit another site. Our intention is to have it operational before we close Stockton. We’re also continuing to look for other properties in the region. Our goal is to be the leading U.S. producer of anthracite coal, and we feel we’re well on our way to achieving that.”