North American Coal’s plan to start a new coal mine in North Dakota was approved Wednesday. Meanwhile, Dakota Westmoreland’s nearby Beulah Mine continues its pursuit of a new coal contract.

North American’s Coyote Creek Mining Company is developing a lignite mine in Mercer County. The mine is expected to produce 2.5 million tons of coal annually beginning in May 2016. The mine site contains some federally controlled coal seams and still needs approval from the secretary of the interior.

Mining is expected to take place at the new mine until 2040. It’s the first major new mine to be permitted since the 1970s.

“Coyote Creek Mining Company has an extensive coal drilling data set regarding the quality of coal,” said North American spokesman David Straley. “ We have taken many data samples and are confident it will meet the necessary levels required by the Coyote Station.”

The new mine will supply Coyote Station run by Otter Tail Power Company. Otter Tail made the decision to switch coal providers in 2012 on the promise that North American could deliver cheaper coal than the cooperative currently gets from Dakota Westmoreland.

Without the Coyote Station contract for 2.5 million tons, Dakota Westmoreland will be left with a small contract for a half-million tons it ships by rail to the Heskett power plant near Mandan, owned by Montana-Dakota Utilities.

The contract with MDU also expires in 2016 and a new one is under negotiation, said MDU spokesman Mark Hanson.

In 2012, Bill Weaver, mine manager of Beulah Mine, said his company was evaluating options after 2016 and thinks the Heskett contract is enough to keep the mine open.

“There are a lot of rumors that this place is for sale, but it wouldn’t make any sense to sell it,” Weaver said in a story published in the Tribune in 2012. “We have contracts to supply coal. We will do our best to supply them with the best quality coal that we have.”

Weaver did not respond to messages left by the Tribune Wednesday.

Full-time jobs

Coyote Creek Mine is planning to hire about 110 workers and staff members starting in spring 2015 and going into 2016 when mining will begin, according to Straley. He said the workers will likely all be hired full time to start rather than as temporary workers as the company does for seasonal work at its other mines.

The company will begin advertising for openings around March, with work to begin when the frost is out of the ground in April or May, Straley said.

Straley did not say whether the company would take on Dakota Westmoreland miners but said it would hire the most qualified applicants.

The new Coyote Creek Mine will cover 8,091 acres 10 miles southwest of Beulah. Of those, 4,530 acres will be mined. The rest will be used for stockpiles, haul roads and other infrastructure.

Straley said North American has not had any discussion with Dakota Westmoreland about buying the Beulah Mine, which backs up directly to Coyote Station. If it were to buy it in the future, North Dakota Public Service Commissioner Randy Christmann said the sale would have to be approved by the commission.

In March, the Public Service Commission permitted North American for 84 acres to begin building the mine’s shop, office and drag line construction. When production starts, the Coyote Creek Mine will truck the coal directly to the Coyote Station with coal haul trucks on a corridor directly from the mine, Straley said.

Reach Jessica Holdman at 701-250-8261 or jessica.holdman@bismarcktribune.com.

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Business Reporter