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Work Begins on $1 Billion Coal Mine

Posted by Steve Rogers | July 20, 2012 / 07:53am | Local News, Business
By Patrick Rupinski/Tuscaloosa News
TUSCALOOSA --Walter Energy's new $1 billion-plus underground coal mine that will be developed over the next six years was granted about $25 million in tax abatements Thursday by the Tuscaloosa County Industrial Development Authority.

The mine project, which was announced in early May by Hoover-based Walter Energy's CEO Walter Scheller and Gov. Robert Bentley, will see a $1.2 billion investment by Walter Energy with development in four Alabama counties. The lion's share of the investment will be in northern Tuscaloosa County, where the mine with its underground coal reserves covering about 20,400 acres will be located.

Some site preparation work for the mine has begun near Brandon School Road and Alabama Highway 69, said Dennis Hall, a Walter Energy spokesman.

The mine will produce 3 million to 4 million tons of metallurgical coal yearly when put into production and will be in production for 40 years. Metallurgical coal is a highly valued, low-sulfur coal that is used to make steel.

The new mine, which will operate as a new Walter Energy subsidiary called Blue Creek Energy Inc., will have its coal shipped by barge and train to Mobile, where the coal then will exported mostly to South America with some going to Europe.

The mine will employ 450 full-time people in Tuscaloosa County by 2019, according to information provided by the industrial development authority.

Hall said the mine is expected to be put into production in late 2018 or early 2019.

Hiring for the mining jobs is still several years off, but he said about 3,000 construction workers will be employed in building the mine and its support facilities over the next several years.

Construction of the future mine's ventilation shafts will start this summer, Hall said. Then work will begin on an almost two-mile-long underground entrance that will allow vehicles to transport miners and equipment to the coal seams and transport coal out.

Additional construction will include coal processing facilities and a new eight-mile railroad spur line that will be used to move some of the coal to the Norfolk Southern rail line in Fayette County. A 14-mile giant conveyor belt will be built to move additional coal to a barge-loading facility on the Black Warrior River in Walker County.

As part of the project, Walter Energy also acquired the old U.S. Steel coal terminal site at the port of Mobile. The terminal has been torn down and a new state-of-the-art coal terminal will be built on the 35-acre site.

Under a new state law, Walter Energy also might be eligible for tax abatements in the other counties in which it will be making investments for the project.

"This is not chicken feed," said Tuscaloosa County Probate Judge Hardy McCollum. "This is going to create some good, high-paying jobs for two generations."

The mining jobs on average will have annual wages and fringe benefits of about $125,000 per worker.

In addition to the pay and fringe benefits, Hall said Walter Energy will spend more than $100 million annually to keep the mine running and furnished with updated equipment.

In addition to the new mine, Walter Energy owns and operates two Jim Walter Resources underground coal mines near Brookwood and the North River underground coal mine in Fayette County. Those mines also produce metallurgical coal.

Hall said the North River mine is approaching the end of its production and its miners will be moved to the company's other mines over the next few years. He said their positions are not part of the 450 jobs that will eventually be created at the Blue Creek mine.

Walter Energy, whose stock is traded on the New York Stock Exchange, also has coal mines in West Virginia, western Canada and Wales. It has natural gas wells in Tuscaloosa County, a coking plant in Birmingham and other coal-related businesses. It has about 4,000 employees, the majority of which are in Alabama.
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