Western Fuels-Colorado buys Colowyo Mine
Fuel supply cooperative to continue to serve Craig Station
September 17, 2011
Western Fuels-Colorado LLC, a cooperative fuel supplier that delivers coal under contract to the Craig Station and Nucla Station power plants in western Colorado, has entered into an agreement to purchase the Colowyo Mine from Rio Tinto, according to a news release.
Western Fuels-Colorado currently delivers coal produced by Colowyo Mine to the 1,304- megawatt Craig Station, which is operated by Tri-State Generation and Transmission Association.
"The purchase of Colowyo Mine secures a clean-burning fuel supply," said Duane Richards, chief executive officer of Western Fuels Association, an affiliate of Western Fuels-Colorado, in the release. "This transaction provides certainty in the long-term supply and cost of fuel."
In 2010, the Colowyo Mine produced approximately 1.5 million tons of coal under contract for Western Fuels-Colorado for delivery to Tri-State.
"Western Fuels-Colorado's purchase of Colowyo will ensure a reliable and affordable supply of coal to Craig Station for the expected life of the power plant," said Mike McInnes, senior vice president of production at Tri-State.
Craig Station, which has undergone a series of efficiency improvements in recent years, is expected to operate in its current state for the next 30 to 40 years.
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Craig Station's three generating units are fueled with coal primarily from Colowyo Mine and Trapper Mine, which is located adjacent to the power plant.
Trapper Mine will continue to deliver coal to Craig Station. Colowyo Mine is located approximately 30 miles from Craig Station, and transports coal by rail. All three facilities are located in Moffat County.
"This purchase further strengthens the energy economy in Northwestern Colorado," said Darcy Owens-Trask, director of the Craig/Moffat Economic Development Partnership. "Our region will continue to stay strong with the high-value jobs that responsibly and safely generate electricity from locally-produced coal."
Colowyo Mine, Trapper Mine and Craig Station make a significant contribution to the Northwest Colorado economy. An economic impact study of the plant and mines identified a $428 million annual direct and indirect economic output value of Craig Station that supports 752 direct and indirect jobs with a payroll of $54.8 million.
Based on standard multipliers for the industry, the study shows the coal purchased annually for Craig Station supports 446 jobs with a payroll of $38.9 million.
A transition team will support Colowyo Mine's employees as they transfer to Western Fuels- Colorado, with a priority on continuing the safe operation and environmental stewardship of the mine.
"We expect a seamless and positive transition of all of Colowyo employees into the Western Fuels family," Richards said in the release. "There is a lot of work that needs to be done between now and when the sale closes, but we are confident that for Colowyo employees, it will be a positive and welcoming experience."
Terms of the transaction will not be disclosed. The sale is expected to close by the end of the year.