A United Kingdom-based holding company is reopening a metallurgical coal mine in Mingo County.
Bens Creek Group is reopening the Glen Alum mine, raising the equivalent of $9.6 million (7 million pounds sterling) from investors to finance mining operations expected to begin in the fourth quarter of 2021.
The company will be engaging contractors alongside employees, and the total number of people working on the mine once it is up and running will be about 60 to 70, according to Llewellyn Angus of Belvedere Communications, a London-based communications firm.
Bens Creek CEO Adam Wilson alluded to this year’s strong recovery of global demand for steel in a statement.
“The macro picture currently looks favourable,” Wilson said.
Metallurgical coal is used in steel production.
Bens Creek was admitted to the London Stock Exchange’s AIM market last week, a move that Investment Week, a United Kingdom-based investments publication, said raised “questions about the market’s ESG [environmental, social and governance] credentials of the UK market.”
More investors are considering environmental, social and governance, or ESG, factors when analyzing risk and profit opportunities. Such factors consider what impact a company may have on the environment, as well as the company’s conscientiousness on social and governance issues.
There will be no blasting at the site, which will consist mainly of high-wall mining, Angus said. In high-wall mining, coal is extracted from exposed horizontal seams.
Funds raised will be used by Bens Creek to finance refurbishing the coal preparation plant and railroad, repairing infrastructure and acquiring mining equipment, Angus said.
Bens Creek Carbon LLC, a wholly-owned subsidiary, has reclamation bonds for licensed permits with the West Virginia Department of Environmental Protection which amount to $1.5 million, according to Angus.
Research and Markets, a market research firm, projected the global market for steel to reach 2.2 billion metric tons by 2026 — up nearly 30% from the farm’s estimate for 2020 of 1.7 billion metric tons.
The firm in part cited an expected rise in construction activity and subsequent rise in the demand for, and production of, a range of machinery production and metal goods fabrication.
Bens Creek Group, on Thursday, announced it had entered into its first offtake agreement for its metallurgical coal with Integrity Coal Sales, Inc., a Long Island, New York-based coal supplier to the global marketplace.
An offtake agreement is an arrangement between a buyer and a producer to sell or purchase goods to come from the producer.
The agreement is for 22,000 short tons of product per month for an initial 12-month period from January to December 2022, according to Bens Creek Group. The agreement covers about half of the expected production volumes of the company’s proposed annual production under the existing mine plan, the company said.
Wilson said his company will seek additional sales agreements with Integrity or with third-party customers.
“Our primary objective remains to move the first underground mine into production by the end of Q4 2021 and following our listing on AIM,” Wilson said. “[W]e are deploying certain of the net proceeds of our placing in pursuit of this work programme and to ensure the necessary steps are taken towards meeting this primary objective for the benefit of all shareholders.”