| Commissioners support Bowie Resources’ royalty reduction request |
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| Written by Hank Lohmeyer | |||
| Wednesday, 19 November 2008 03:00 | |||
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The Board of County Commissioners have agreed to support a request by Bowie Resources that state royalty payments from its North Fork Valley coal mine production be cut from eight percent to five percent.
If the request is approved by the legislature and signed by the governor, the cut in royalty payments will apply to 18 million tons of mine production. Coal produced the mine operation from May of last year and into 2011 would be affected by the royalty rate reduction. Senior Mine Engineer for Bowie Jim Abshire told the BoCC on Oct. 27 that the mine has already produced three million to four million tons of coal that would be affected by the royalty rate reduction if finally approved. The county commissioners do not have authority to grant the royalty reduction, but said they will write a letter to the governor supporting the reduction. Abshire said that a number of technical and economic factors relating to the mine’s operation have contributed to the royalty rate reduction request. Those factors include the following: • Mine operations in the company’s B Seam produce more gas than the previously-mined D Seam has been, which requires additional expense for venting gasses. • The company has had to spend millions of dollars on its Hubbard Creek ventilation shaft, and the costs of ventilation equipment has gone up. • Mine operations are encountering more overburden which requires more high-cost steel be used in roof reinforcing safety structures. Abshire also referred to “seismic” events. • Government oversight of mine operations has increased since the Crandall Canyon Mine disaster near Huntington, Utah, last year. During that August 2007 accident, six miners and three rescue workers lost their lives in two separate mine wall failures. The mine has since been closed and sealed. • Bowie’s money-making long wall operation was shut down for seven months in 2007, and will be idled for another two months this year. In agreeing with Bowie’s request for support of the royalty rate reduction, county commission chairman Wayne Wolf said that any impact on county revenues from the reduction would be minimal, and far less overall than the contributions the mine operations make to the county’s economy.
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