Tennessee, feds clear the way for coal mining in Rhea County

Tennessee, feds clear the way for coal mining in Rhea County

October 23rd, 2014 by Ben Benton in Local Regional News

Illustration by Laura McNutt /Times Free Press.

State and federal officials have cleared the way for deep mine operations in Rhea County, Tenn., to begin extracting coal from Dayton Mountain.

Officials with Dayton, Tenn.-based Iron Properties LLC said on Tuesday that the coal mine at the larger of the two sites, the 127-acre Liberty Mine, could be in operation by 2017 and initially employ a little less than 100 people. That's one-third of the anticipated 300 jobs the Rhea County operations are expected to eventually create.

The salary for an underground miner is more than $50,000 a year in a county where the median household income in 2012 was $34,842.

But Dave Fortner, partner in Iron Properties with owner Jason McCoy, says the world coal market is down and the company is hoping for improvement down the road as the primary mine is developed and readied for opening.

"If the economy changes for coal, that can be accelerated a little bit. But the earliest we could be mining would be about two years," Fortner said.

Opponents of the mine are eyeing the same market trends.

"Although we are disappointed that state and federal regulators have allowed these mines to proceed, we are optimistic that market forces might slow down or stop the mining," Tennessee Clean Water Network attorney Stephanie Durman Matheny said on Wednesday. "Natural gas is out-competing coal as an energy source nationwide, and Tennessee is no exception."

A Notice of Determination issued by the Tennessee Department of Environment and Conservation and findings issued by the federal Office of Surface Mining Reclamation and Enforcement on the larger of the two mines represent the two final hurdles before construction of the Liberty Mine can begin. The product mined from the Richland Coal Seam probably will be sold mostly to foreign customers, primarily in the Far East and particularly in China.

Most coal produced in Appalachia for decades has not burned cleanly or cheaply enough for use in domestic manufacturing or power production, but companies elsewhere in the world use the type of coal to be mined in Rhea County to make steel.

China makes more than half the world's steel and 10 times the amount of steel produced in the U.S., Fortner said. That makes China the biggest likely customer, although Iron Properties has no customers lined up yet.

Steel production in some countries requires the same type of coal historically used to make coke -- a hot-burning fuel for steel mills that was lost to environmental controls put in place in the U.S. over the years.

Coke was produced in Rhea County's coal mining heyday in the late 1800s and early 1900s when coal operations crisscrossed the town and Walden's Ridge from one end to the other.

By the 1930s, the foundry belonging to Dayton's largest coal firm, Dayton Coal and Iron Co., was closed and demolished in the wake of mining accidents, labor strikes and low market prices for the region's coal for making coke.

In recent years, more companies have targeted the 74-mile-long Walden's Ridge and other portions of the Cumberland Escarpment to tap as a coal source.

The Office of Surface Mining issued its findings Monday about the concerns listed by local residents who attended a public hearing on the mines on April 26, 2012, and the company's responses. Most people expressed concerns about the impact of deep mining on groundwater and wells, toxic stormwater runoff and the impact of coal truck traffic on rural roads.

National Pollutant Discharge Elimination System permits were issued by TDEC on Oct. 8 for the Liberty Mine and Security Mine, while federal permitting from the Office of Surface Mining is still being sought for the smaller, Security Mine site, Fortner said. The regulatory agencies found that the company's plans for Liberty meet environmental requirements.

According to documents, the larger Liberty Mine, during the anticipated "seven-year life of the operation," is expected to produce 400,000 tons of coal a year, or 2.8 million tons over the mine's lifetime. The mine will be from 600 to 1,000 feet deep.

On Tuesday, Ann League, a member of Statewide Organizing for Community eMpowerment, said the Liberty Mine's "very large" processing plant is a big worry. And coal truck traffic could pose problems for school bus and agricultural traffic on Ogden Road, the main route in and out of the mine site on top of Dayton Mountain, she said.

League said a million-gallon spill of "black water" -- untreated water and coal waste -- a couple of years ago was released into the New River at Premium Coal's processing plant in Anderson County, Tenn., demonstrating what can happen when something goes wrong.

League expects the stunted coal market to play a role in the development and production at the Rhea County mines.

Fortner said Iron Properties "will be deliberate in starting and developing the operation" as work to open the mine begins.

Contact staff writer Ben Benton at bbenton@timesfreepress.com or twitter.com/BenBenton or www.facebook.com/ben.benton1 or 423-757-6569.