Foresight Working to Reopen Idled Deer Run Coal Mine in Illinois
By Bob Matyi
December 9, 2018 - Foresight Energy is moving to reopen its long-idled Deer Run longwall mine in Montgomery County, Illinois, which the company "permanently" closed last February after a "combustion event" occurred in 2015, officials said Friday.
"It's looking that way," said an official with Patton Mining, the contract miner for Deer Run, when asked if the mine, also known as Hillsboro, will be producing coal again.
On December 4, Foresight subsidiary Hillsboro Mining filed a permit renewal application for Deer Run with the Illinois Department of Natural Resources' Office of Mines and Minerals. The request covers nearly 5,000 shadow acres.
Cody Nett, spokesman for Ohio-based Murray Energy, Foresight's owner, said Friday that the permit application "speaks for itself."
While Nett would not confirm if a final decision has been made to restart Deer Run, he said: "We are absolutely exploring the potential to reopen Deer Run."
The impetus for a likely restart was a recent settlement in a lawsuit between St. Louis-based Foresight and Natural Resource Partners, a Houston investment company that holds the lease on Deer Run's mineral rights, Nett said.
"The settlement gave us operating flexibility," he said.
Under the October deal that involved both Deer Run and Foresight's Shay No. 1 underground mine in Macoupin County, Illinois, Foresight agreed to pay $25 million to NRP resolve past due lease amounts. In addition, the companies agreed to amend the Hillsboro Energy mining lease to provide $11 million of non-recoupable annual minimum payments to NRP and to extend the lease term through 2033.
Neither Cornell nor Nett disclosed whether Foresight has a market for Deer Run's coal. Cornell noted, however, that "it's an asset. You want to keep it close to you."
Murray/Foresight had distanced themselves from the troubled mine early this year after months of dogged efforts to quell what was believed to be an underground fire or hot spot in a longwall area proved unsuccessful. Nett said the company "sealed the area where the event was" in February.
According to Cornell, "there's no fire" in the mine.
For months, the combustion event triggered elevated levels of carbon monoxide in Deer Run, a development that initially prompted the US Mine Safety and Health Administration to order the mine closed in March 2015.
The move came after Deer Run enjoyed a good production year in 2014, turning out 5.5 million st of coal, MSHA records showed. Foresight had touted Deer Run as one of its most productive operations since longwall mining began there in August 2012.
Foresight said in a November 8 third-quarter earnings call that coal sales increased in the July-September period to more than 6.1 million st, a 17.2% gain from a year ago, as a result of strong export and domestic markets. Projected sales volumes for 2018 rose to 22.4 million-23 million st, 9 million st of which are expected to be sold into the international market.