White Energy’s wholly owned subsidiary, White Energy Coal North America, Inc. (“WECNA”), has entered into agreement with Buckskin Mining Company (“Buckskin”), a wholly owned subsidiary of Kiewit Group, to enable WECNA to develop coal upgrading plants at Buckskin’s mine in Gillette Wyoming. The project will have an initial capacity of 1 million tonnes per annum but the parties intend to expand the capacity to 8 million tonnes per annum.
The Buckskin Mine produces in excess of 27 million tons of sub-bituminous coal annually, and since 1981 has shipped more than 406 million tons of high quality, low quality coal from the Southern Powder River Basin. White Energy will own 100% of the Buckskin project.
The key terms of the Buckskin joint venture are as follows:
In January 2013, a minor source air permit application for a BCB plant to be located on the Buckskin mine in Wyoming was submitted to the Wyoming Department of Environmental Quality (“DEQ”). As the permit application is for a minor source it is anticipated that a draft permit will be issued by the DEQ during the second quarter of 2013.
WECNA will market the upgraded Buckskin coal to utilities in the eastern United States as a substitute for low sulphur bituminous coal. There are over 93 utilities in the eastern United States that burn bituminous coal. This group consumes approximately 220 million tons per year of low sulphur bituminous coal.