Global demand for thermal coal is forecast to rise by 170 million tons a year by 2015, a niche PacRim Coal would like to help fill with the 300 million tons of ultra-low-sulfur, sub-bituminous coal sitting near tidewater at its Chuitna coal project on the west side of Cook Inlet in Southcentral Alaska.
Chuitna was originally evaluated through an environmental impact statement and nearly permitted in the 1990s, but a coal mine was never developed. With the increased demand and price of steam coal, PacRim has put the project back on the regulatory track.
Over the past two years, the Chuitna developer has made several modifications to the project design aimed at reducing the environmental impact of the proposed mine.
“Our main focus has been on reducing impacts of the project, Chuitna Project Manager Dan Graham informed attendees of the Alaska Miners Association 2010 Annual Convention. “Those changes have been wrapped up and we are re-entering the EIS process in earnest.”
Innovative conveyorAn agreement struck with Tyonek Native Corp. in March allows for easement across the Alaska Native village corporation lands lying between the mine and Cook Inlet about eight miles southeast. This access has allowed PacRim to make changes in the proposed infrastructure alignment that could significantly reduce the environmental footprint of the project.
Originally, the company proposed to transport the coal from the mine to ship-loading facilities via a 12-mile conventional conveyor system that skirted Tyonek lands. With the access between mine and the loading facilities, PacRim can utilize an innovative conveyor that is suspended from widely spaced towers. This new system provides a multitude of advantages.
One of the primary advantages of the proposed transportation system is that it would reduce total ground disturbances from 400 acres to 100 acres, and wetlands from 100 acres to about 25 acres. One of the reasons this system reduces the environmental footprint is it is maintained and repaired from a car that travels above the belt, eliminating the need for a service road.
Having the coal fully covered during transport and a belt that flips after dumping its payload, allowing the dirty side of the belt to always be facing up, are additional features that make the suspended conveyor more desirable.
“It is really intriguing technology for us. It comes at a cost, but in this situation, we feel it’s worth it,” Graham explained.
A second suspended conveyor will be used to load ships nearly two miles offshore in Cook Inlet, where water depths of 65 feet allow the loading of cape-size vessels. The conveyor, which would require nine towers to span the 10,000 feet between land and ship-loader, would require 40 percent of the piles that would be needed for a conventional pier. This is an important reduction of barriers in an area considered critical habitat to beluga whales.
Water and fishGraham said the company also has made changes to the mine area, primarily focused on water management and fish protection.
The project manager explained that while the company will need to contend with groundwater and runoff from precipitation, water will not be needed to process the coal at the proposed mine.
“We are not an operation that requires a wash plant, we don’t have processing – the only thing in our mill is crushing the coal down to a 2-inch-size – so there are no tailings impoundments or that sort of thing,” Graham told the audience.
PacRim has two aquifers to consider; the groundwater in the gravels above the four coal seams the company proposes to mine and an aquifer below the coal. Any of the flows in the upper gravels, which currently do not meet water quality standards but reflect the water quality in the area streams, encountered by operations may need to be treated or mixed before being discharged. The company will only need to release enough pressure off the lower aquifer to prevent it from flooding the pit.
One salmon-bearing stream winds its way up into the Chuitna mine area. To mitigate disturbances to this anadramous waterway, PacRim proposes to build side-stream habitat below the mine area for the Coho salmon.
Graham provided examples of where this technique has successfully been employed.
Other mitigation measures being considered are adding nutritional supplements for the salmon and a salmon egg fertilization system developed by Wrangell-based Alaska Resource & Economic Development Inc.
The ARED system harvests eggs from wild salmon native to the stream, fertilizes them, protects them in an onsite incubator and once the eggs reach a stage of resiliency injects them into the bed of the waterway.
“By utilizing those extra eggs that nature provides, we increase the yield of emerging wild salmon from their natural spawning grounds. The salmon hatch in their natural environment and continue their life-cycle,” according to the ARED Website.
“We are not proposing this as our centerpiece, but it is a tool that is available. If our planned mitigation does not meet expectations, there are tools we can add to it,” Graham said.
Looking aheadDue to these design alterations as well as changes in coal regulations, the U.S. Environmental Protection Agency is requiring that PacRim complete a supplemental EIS for the coal project.
On Nov. 1, EPA relinquished its role as the lead agency for the Chuitna SEIS to the U.S. Army Corps of Engineers. This transition is primarily a result of the State of Alaska gaining primacy of mining wastewater permits in the state.
The Chuitna Project Manager said PacRim has filed the SEIS applications, and the company is now working on updating the individual permit applications to reflect the redesigned project.
The SEIS and permitting process for Chuitna is expected to take at least 18 to 24 months, if the permits are approved by state and federal agencies, the company will evaluate market conditions and make a decision whether to proceed with development.
China and India demand are expected to drive strong growth in the Pacific Rim seaborne thermal coal market, increasing supply deficits and prices.
“By 2015, growth in Indian thermal power generation capacity should raise import volumes close to 115 million metric tons annually, a level that would match the anticipated size of the Chinese and Japanese markets at that time. Because of these developments and continued infrastructure-related supply constraints in the Asia/Pacific market, we are forecasting annual deficits in the seaborne market out to 2014,” said Morgan Stanley researchers.
By 2015 demand for thermal coal in Asia is expected to be around 647 million metric tons, a 35 percent increase from the 477 million metric tons expected to be needed there in 2010.
“The coal market is doing unbelievable on a worldwide scale. The demand is up and the prices are up; and they have been for several years now,” Graham said.