Wyo coal finds another customer

Wyo coal finds another customer

A Canadian company has shut down its 35-year-old coal mine in Washington state, throwing 600 people out of work, but plans to keep a major generating plant running with coal from Wyoming.

TransAlta Corp. has signed long-term contracts with Rio Tinto Energy America and Peabody Energy for coal with less sulfur and mercury from the Powder River Basin in Wyoming and with BNSF Railway Inc. to handle shipments, according to a statement from the company.

The 1,404-megawatt plant in Centralia, Wash., supplies about 8 percent of the electricity used in Washington state and has long been an economic mainstay of Lewis County, especially with the decline in the forest products industry in the past 20 years. As of 2000 mine and plant workers were paid an average of $54,000 a year, The Olympian newspaper of Olympia reported.

The 225 power plant jobs were not affected, and workers who were idled when the nearby mine closed Monday afternoon will continue to receive pay and benefits through the end of November, according to the statement issued by TransAlta Corp. president Steven G. Snyder after financial markets closed for the day.

The mine has become increasingly expensive to operate as workers had to go ever deeper into the earth, and the coal’s high sulfur and mercury content has boosted pollution control costs at the power plant, Snyder noted.

“The maturity of the Centralia mine, its rapidly deteriorating mining conditions and escalating costs from excessive overburden have combined to make the mine uneconomic,” Snyder said. “In order to produce competitively priced electricity from our Centralia coal-fired plant, we have to meet the fuel requirements for our plant from a more predictable and economic source.”

Powder River Basin coal is shipped to some 35 states and as far east as New Brunswick, N.J. Canada has long been a small market Powder River Basin coal, too, particularly for power plants near the Great Lakes because of good delivery access, according to Dave Johnson, who represents the Powder River Basin Coal Users Group.

Johnson said he’s not surprised to see Powder River Basin coal still gaining contracts in the utility industry. New power plant construction in Arizona, Texas and Iowa all plant to use Powder River Basin coal.

“If you look at all of the power plants that are coming on, you’ll see they’re filling a huge energy gap which is spurring a construction boom in the industry,” Johnson said. “Most of them are going to be using Powder River Basin coal.”

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