Colowyo's future may include underground mine

Kenecott's presentation Thursday covers both short-term, long-term plans for future operations

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By RYAN SHERIDAN
Daily Press writer
The future of Colowyo mine is a solid one.
With the new western pit opening 40 million tons of coal and the possibility of an underground mining operation in the coming years, said John Harmon, general manager of Colowyo Coal Company L.P.
Colowyo mine is presently a three pit operation that owns or controls 150,000 acres in Routt and Moffat Counties.
The east pit is projected to close in a couple of years and the section 16 pit should be finished in about one year, Harmon said, and the pit closings will not affect employment levels at Colowyo.
"We've recently opened the west pit, and that is producing a good portion of our production," he said. "We are on target for our production levels for this year, and we don't foresee a change in that in the short or long term.
"All we're doing is ending one pit while developing another pit. Our production will remain in the same range, and the number of employees [at Colowyo] will stay the same."
Kennecott Energy Company hosted a presentation on Thursday to discuss its fiscal and industrial health, and specifically the Colowyo mine, which it owns.
Charlene Murdock, manager of public and state government affairs for Kennecott, and Harmon gave an overview of some of the things their companies project will be happening in the future.
Murdock makes presentations such as this because "we get lots of questions in our office [in Gillette] about what is happening with our company and nationally."We feel we have raised the bar for safety and the environment for our industry we're not required to do reports like this, but it is something we want to share with the communities."
The trend of energy usage has shown a rise, and Kennecott believes that trend will continue, and impact their holdings positively, Murdock said.
Only a significant economic slowdown that affects the manufacturing sector of the economy could make demand drop. The company is "in a kind of holding pattern," she said.
The mine's labor force fluctuates slightly from year to year, from 300 to 325 regular employees, in addition to summer interns and other student programs, Harmon said.
The Colowyo mine has coal reserves of 160 million tons for surface mining, and 110 million tons available for an underground mine, which Colowyo is considering opening, Harmon said.
"[Underground mines] are much more competitive, because they are so efficient," he said. "They have better tax burdens, which is another advantage. We are a surface mine, and we basically have to line up behind Twentymile and Deserado, and sell our coal when they've sold out.
"We've made no commitment to a decision. We could run an underground mine at the same time as the surface mines, only run an underground mine, or stay with only running surface mines. All options are currently available, and it will be a few years until we make that decision."
For the short term, Colowyo is in a very good position with "40 million tons of coal in front us."
The Rio Tinto group, which is one of the world's largest mining companies with operations on six continents, owns and operates Kennecott Energy Company. Kennecott provides management services to properties in Montana, Wyoming, Colorado, New Mexico and Tennessee.

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