Hamilton Beach 2009 Annual Report Download - page 9

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Sunflowers ready for harvesting
bask in the midday sun on reclaimed
land at The Coteau Properties
Company’s Freedom Mine in
North Dakota. One of Freedom
Mine’s draglines works in the
background to remove overburden
at the mine site.
mine approximately 300,000 to 400,000
tons of coal annually, with initial deliveries
expected to commence in 2010. Finally,
NACoal’s new subsidiary, Caddo Creek
Resources Company, entered into a
contract mining services agreement to
mine approximately 650,000 tons of coal
annually for a customer that currently
purchases its coal from The Sabine Mining
Company, with initial deliveries expected to
commence in 2013. In addition to the new
coal mining agreements, NACoal entered
into a new limerock mining services contract
for deliveries of approximately 1.0 million
cubic yards annually when the quarry is
at full capacity once the Florida market
improves. NACoal commenced limerock
mining at this quarry during 2009.
Market Outlook for 2010
NACoal expects steady performance at
its coal mining operations in 2010 provided
that customers achieve their planned power
plant operating levels. As a result, tons
delivered at its coal mines in 2010 are
expected to be comparable to 2009.
Limerock deliveries are expected to
be significantly higher in 2010 than in
2009. In early 2010, the U.S. Army Corps
of Engineers began issuing new mining
permits for NACoal’s limerock customers
in the Florida lake belt region where an
unfavorable legal ruling terminated the
customers’ previous mining permits. Most
of the company’s limerock operations are
expected to be operating again by the end
of the first quarter of 2010. However,
production will ramp up slowly and not all
mining permits will be issued at once. In
addition, production levels are expected to
continue at low rates in 2010 because of the
continued depressed levels of the South
Florida housing and construction markets.
Delivery levels are not expected to return to
2008 levels until those markets recover.
Actions Being Taken to Move
Forward in 2010
NACoal prides itself on its intense
focus on safety, the environment and its
continuous improvement programs. These
well-established programs form a solid
foundation for operations to be relatively
stable at all of its coal mines in 2010.
Results may improve at certain mines,
providing no significant unplanned outages
occur at any of its customers’ power plants.
High productivity levels are expected to
continue at all mining operations, especially
at the Mississippi Lignite Mining Company,
where the company expects to build up
safety stock inventory during 2010 and
achieve a steady operating level beginning
in 2011.
NACoal’s exemplary reclamation
practices reflect a long-term commitment
to outstanding land reclamation efforts.
During 2009, the Mississippi Lignite
Mining Company was one of three mines
awarded the 2009 Office of Surface
Mining Gold Good Neighbor Award in
recognition of its outstanding commitment
to establishing good working relations
with surrounding communities.
NACoal is working on three important
new project opportunities for which it
expects to continue to incur substantial
expenses in 2010. First, permitting is under
way in the Otter Creek Reserve in North
Dakota in expectation of opening a new
mine. A permit is anticipated to be issued in
mid-2010. Second, construction is complete
on coal dryers and a coal load-out facility
adjacent to the Falkirk Mine. This project is
expected to improve market potential for
the Falkirk Mine by extending the distances
lignite coal can be economically shipped,
beginning with shipments expected to
start in the second quarter of 2010 to the
Spiritwood Power Plant, now under
construction. Finally, NACoal is working