Vectren 2008 Annual Report Download - page 20

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to the mine is planned via a 90 foot deep box cut and a 2,200 foot slope on a 14 degree grade, reaching coal in
excess of 375 feet below the surface.
Oaktown is a room and pillar underground mine meaning that main airways and transportation entries are
developed and maintained while remote-controlled continuous miners extract coal from so-called rooms by
removing coal from the seam, leaving pillars to support the roof. Shuttle cars or similar transportation is used to
transport coal to a conveyor belt for transport to the surface. There are two mines separated by a sandstone
channel. The seam thickness ranges from 4 feet to over 9 feet. The mine’s wash plant is sized to process 800 tons
per hour initially with a planned expansion to 1,600 tons per hour. The mine will also be connected to a railway
and equipped to handle 110 to 120 car unit trains.
Prosperity Mine
Prosperity is an underground mine located on 1,100 surface acres outside of Petersburg in Pike County, Indiana.
Prosperity is also a room and pillar mine where coal removal is accomplished with continuous mining machines.
The mine entrance slopes gradually for 500 ft on a 9 degree grade and is more than 250 feet below ground level.
The coal seam varies in thickness from 4-1/2 to 8 feet. The mine has a wash plant sized to process 1,000 tons/hour.
The mine is connected to a railway and can handle 110-120 car unit trains. Coal is also transported via truck to its
customers, which include Vectren’s power supply operations and other third party utilities. The mine opened in
2001, and the total plant and development costs to date are $152 million. Through December 31, 2008,
approximately 4,000 acres of coal have been mined with approximately 6,000 acres remaining. Reserves at
December 31, 2008 approximate 32 million tons, not including possible nearby expansion opportunities. The
remaining unamortized plant balance as of December 31, 2008 approximates $75 million, inclusive of $15 million
of land and buildings and $61 million of mine development and equipment. Reserves, absent expansion, are
expected to be completely accessed by 2019.
Cypress Creek
Cypress Creek is an above-ground, or surface mine, located on 155 acres about 4 miles north of Boonville in
Warrick County, Indiana. Cypress Creek is a combination truck/shovel, dozer push and high wall mining
operation, meaning large shovels or front-end loaders remove earth and rock covering a coal seam and loading
equipment place the coal into trucks for transportation to a blending and loading area. Cypress Creek’s coal, is sold
as a raw product after sizing and blending with coal. Because of the cost of extensive digging, the coal mining limit
is 125 to 135 feet deep. All coal mined from Cypress Creek is transported via truck to Vectren’s power supply
operations. The mine opened in 1998 and the total plant and development costs were $29 million. As of December
31, 2008, remaining reserves approximate 500,000 tons, all of which is expected to be accessed in 2009. The
remaining unamortized plant balance as of December 31, 2008 approximates $11 million, inclusive of $1 million of
land and buildings and $10 million in mine development and equipment.
Following is summarized data regarding coal mining operations:
Cypress Oaktown Oaktown
Creek Prosperity Mine 1 Mine 2 Totals
Type of Mining Surface Underground Underground Underground
Mining Technology Truck & Shovel Room & Pillar Room & Pillar Room & Pillar
Tons Mined (in thousands)
2008 1,150 2,378 - - 3,528
2007 1,433 2,632 - - 4,065
2006 1,212 2,790 - - 4,002
County Located in Indiana Warrick Pike Knox Knox
Coal Reserves (thousands of tons) 500 32,000 50,000 38,000 120,500
Average Heat Content (BTU/lb.) 10,500 11,300 11,100 11,300
Average Sulfur Content (lbs./ton) 8.0 4.0 5.6 4.8