Hamilton Beach 2007 Annual Report Download - page 42

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Performance in 2007 at Red River Mining Company, as
expected, was not as strong as 2006 because of a customer
power plant outage and planned capital expenditures by
NACoal necessary to prepare the mine for possible higher
mining volumes in the future. In addition, lignite coal
deliveries to third-party customers fell below expectations.
While 2008 volume is expected to be above that of 2007,
volumes in 2009 and beyond are now forecasted to be at levels
below the company’s previous expectations. It is NACoal’s
hope that marketing efforts directed beyond NACoal’s
current customers will result in new business
opportunities and a return to
previously anticipated mining levels.
Limerock dragline mining
operations. At NACoal’s limerock
mining operations in southeast
Florida, operating results have not
yet been materially affected by an
unfavorable 2007 court ruling that
could limit mining in Miami-Dade
County, where six of the company’s
seven limerock mining operations
are located. However, compliance
with the district court ruling and the timing of receiving new
permit application approvals indicate reductions in customer
deliveries are likely. NACoal has a relatively low capital
investment in the six operations affected by the litigation,
and the contracts in place help reduce the financial impact of
lower-than-projected deliveries. As the company awaits
resolution of this matter and as the market for new housing
and construction in the region softens, limerock deliveries are
likely to be lower than previously planned in 2008. NACoal
believes the long-term prospects for limerock mining in those
areas, and in Florida in general, are favorable.
Key Programs for Mining and Reclamation Innovation
A second key NACoal strategy is to develop and
implement new mining and reclamation techniques. The
company’s culture of continuous improvement and striving
for excellence supports this strategy.
Mining and management innovation. NACoal continues
to develop methods that improve mining efficiency and
coal recovery, reduce costs, enhance safety and lessen the
environmental impact of mining. For example, Geographical
Interface Systems (“GIS”), which work with existing
computer programs, are now being developed to increase the
effectiveness of geographical data management at the mines.
Integrated GIS will allow for timelier and more efficient data
analysis, improved permitting and mine planning and
enhanced reclamation. Other computerized tracking systems
in use help measure coal quality, which can improve
power plant efficiency, reduce
emissions and, ultimately, result in
lower-cost electricity to end users.
Environmental commitment.
NACoal is committed to protecting
the environment both in its mining
methods and by restoring mined
land to its original or an improved
condition. The company has been a
prominent recipient of environmental
awards over the years, and in 2007,
NACoal’s Falkirk Mine in North
Dakota received a national award from the U.S. Department
of Interior’s Office of Surface Mining for Re-Mining,
Stabilization and Reclamation of Abandoned Underground
Coal Mines. NACoal’s careful work transformed previously
unusable land to what is now fertile, productive farmland
(see photo on page 37 of this Annual Report).
Key Programs for New Business Opportunities
NACoal’s strategy for growth is focused on understanding
and satisfying the mining and energy needs of each region in
which the company operates. NACoal sustains long-term
partnerships in these regions. The company’s intense focus
on opportunity analysis, networking and new business
development activities guide this strategy. Elements of the
company’s business development opportunities include:
Leveraging NACoal’s lignite coal reserves. NACoal
either mines, controls or owns data on many lignite reserves
At NACoal, people and
equipment work together
as a highly coordinated
team to make mining
operations as efficient and
effective as possible.
Right: A Le Tourneau front-end loader loads mined lignite coal into a Kress coal haul truck at The Coteau Properties Company’s Freedom Mine in North Dakota.