Vectren 2010 Annual Report Download - page 21

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over 9 feet. The mine’s wash plant was originally sized to process 800 tons per hour and has been expanded to 1,600 tons per
hour, although the addition to the wash plant will not be utilized until the Oaktown 2 mine is opened. The two mines are
connected to a railway equipped to handle 110 to 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. Reserves, absent expansion, are expected to be
completely exhausted over the next 20 years.
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 per hour. The mine is connected to a railway and can
handle 110 to 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 $190
million. Through December 31, 2010, approximately 6,000 acres of coal have been mined with approximately 13,000 acres
remaining. Reserves at December 31, 2010 approximate 33 million tons, not including possible nearby expansion opportunities.
The remaining unamortized plant balance as of December 31, 2010 approximates $81 million, inclusive of $3 million of land and
buildings and $78 million of mine development and equipment. Reserves, absent expansion, are expected to be exhausted by
2021.
Cypress Creek
Cypress Creek was an above-ground, or surface mine, located on 155 acres about 4 miles north of Boonville in Warrick County,
Indiana. Cypress Creek was a combination truck/shovel, dozer push and high wall mining operation, meaning large shovels or
front-end loaders removed earth and rock covering a coal seam and loading equipment placed the coal into trucks for
transportation to a blending and loading area. Cypress Creek’s coal was sold as a raw product after sizing and blending with
coal. Due to the cost of extensive digging, the coal mining limit was 125 to 135 feet deep. All coal mined from Cypress Creek
was 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, 2010, no significant reserves remain, and the mine is substantially reclaimed. The
remaining unamortized plant balance as of December 31, 2010 approximates $2 million, inclusive of $1 million of land and
buildings and $1 million in 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)
2010 91 2,685 995 - 3,771
2009 969 2,583 - - 3,552
2008 1,150 2,378 - - 3,528
County Located in Indiana Warrick Pike Knox Knox
Coal Reserves (thousands of tons) - 32,900 65,700 38,800 137,400
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