Twentymile enters Phase 2 of Sage Creek coal reserve expansion

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— Work has been going on at Twentymile Coal Co.'s Sage Creek reserve since 2011 in preparation for the company’s expansion. With the existing mine southeast of Hayden nearing the limit of its reserves, St. Louis-based Peabody Energy, which owns Twentymile, launched Phase 2 of prepping Sage Creek in May, beginning initial underground development of entry portals and longwall panels.

The Sage Creek reserve is estimated to hold 110 million tons of coal, Jerry Nettleton, environmental manager at Twentymile, said at the Aug. 14 Colorado Coal & Power Generation Conference in Craig.

Twentymile Mine produced about 7.75 million tons of coal in 2011, according to the Mine Safety and Health Administration website.

The Sage Creek project is a $200 million capital investment and Phase 2 of the expansion is slated to be complete by 2015, when full-scale production would begin, Peabody spokeswoman Beth Sutton wrote in an email.

Once production is under way, coal from Sage Creek will be trucked over a stretch of Routt County Road 27 back to Twentymile Mine for processing and loading at the railway station there.

A roundabout 200 feet in diameter is being constructed on C.R. 27 by Steamboat’s Duckels Construction in anticipation of heavier coal-related traffic. Peabody Energy is paying for the roundabout and upgrades to related county roads, but the project is being managed by the Routt County Road and Bridge Department.

Twentymile Mine has signed a 16-year contract with the Hayden Station coal-fired power plant, which will use Sage Creek coal.

Xcel Energy, which owns Hayden Station, recently completed the construction of a railroad spur over U.S. Highway 40 to eliminate the need for trucks to transport coal on C.R. 27. Coal from Sage Creek processed at Twentymile Mine will be transported by rail to Hayden Station, Xcel Energy spokesman Mark Stutz said.

Sutton wrote that the 16-year contract and exports will secure the future of the Sage Creek reserve.

“Peabody Energy has a leadership position in Colorado. We see our operations continuing well into the future, building on our half-century history in the state,” she wrote.

To reach Michael Schrantz, call 970-871-4206 or email mschrantz@SteamboatToday.com

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