Two mines. Two seams. One partnership. Cat dealer and customer strengthen relationship in rich coal basin
In the rural areas of western Kentucky, USA, it’s not uncommon to turn a corner on a rural road and see a mining truck crossing the street. The Ohio River Valley area is one of the densest coal-producing regions in the United States, and the landscape is dotted with mining operations of all types and sizes.
The mines aren’t just above ground, either. Though they aren’t visible from the road, underground mining machines are hard at work beneath the region’s rolling hills. All told, the basin accounts for as much as 8 percent of the country’s annual coal production, with mines in Kentucky, Indiana and Southern Illinois producing nearly 91 million tonnes (100 million tons) annually.
Many companies operate in the Illinois basin, gathering coal, petroleum and other resources from the region. Some operate on the surface, some underground, and others manage multiple sites in the basin. Armstrong Energy, founded in 2006 for the express purpose of gathering coal in the Illinois Basin, operates six mines above ground and six below, as well as three plants that prepare coal for sale.
Armstrong currently controls more than 270 million tonnes (300 million tons) of proven and probable coal reserves in western Kentucky. The coal Armstrong produces is shipped by barge, rail and truck to regional utilities, as well as the coal-hungry Asian market.
Mining a rich coal seam
In 2010, Armstrong began operations at Lewis Creek with a single Bucyrus-Erie 770B dragline, the only one of its size in the United States. Originally built in 1954, the machine was rebuilt before it began operation at Lewis Creek (prior to Caterpillar’s acquisition of Bucyrus International). The dragline began removing overburden to allow a full fleet of surface mining equipment access to the rich No. 13 Kentucky coal seam, and continues to remove overburden on site today.
Since then, the Lewis Creek surface mine has grown to a full-fledged dragline operation that produces between 82 000 and 127 000 tonnes (90,000 and 140,000 tons) per month, with more than 725 000 tonnes (800,000 tons) produced in 2012 alone. The mine is projected to continue operation at that pace through 2022 or 2023. However, producing coal from the surface operation was not the only goal.
Beneath the No. 13 seam, under more than 30 meters (100 feet) of additional overburden, lies another coal seam. Western Kentucky No. 9 is the most heavily mined underground coal seam in the region, and Armstrong has access to nearly 5.4 million tonnes (6 million tons) of coal at the Lewis Creek location.
The underground mine began operation in early 2013, and is currently producing at a rate of roughly 815 000 tonnes (900,000 tons) per year. Using the room and pillar method, the mine is currently expected to produce for about five years.
While an underground mine would typically begin production when a surface mine has finished operation, Armstrong always planned to begin mining underground as soon as the overburden had been cleared.
“There are many advantages in having a surface and underground mine operating in close proximity to each other,” says Kenny Allen, Armstrong executive vice president of operations. “There is a lot of equipment and infrastructure that can be shared between the two mines, which can save us a lot of time and money in the long run.”
The existing haul roads provide access to the underground site, which simplifies delivery of equipment and transportation of personnel.
Both mines also send coal to the Midway preparation plant, which can process up to 1089 tonnes (1,200 tons) per hour of heavy or medium coal, and has all the infrastructure and facilities needed to load processed coal directly onto trains for distribution.
“Having both sites operating simultaneously has allowed us to meet a wider range of customer needs,” says Allen.
Leveraging a long-term relationship
Equipment and infrastructure aren’t the only things shared by the surface and underground Lewis Creek sites. Both operations also benefit from a longstanding partnership with the territory’s Cat® dealer, Whayne Supply.
“We have been working with Whayne since 2007, and they’ve always been very good to work with,” says Allen. “We have a lot of trust in their support staff and parts distribution.”
With offices all over western Kentucky, Whayne Supply has been providing equipment and maintenance to Armstrong almost as long as Armstrong has existed. In addition to a number of pieces of surface mining equipment, including trucks, wheel loaders, motor graders and dozers, Whayne also provides ongoing service and support for Armstrong’s rebuilt Bucyrus-Erie dragline. The dealer provides rental equipment to meet specific short-term needs.
Cat machines make up the bulk of the production machines on the Lewis Creek surface site. Track-type tractors in a variety of sizes are used for removing overburden, including a D6R, D9T, two D10Ts and a D11T. A 992G Wheel Loader also shares in overburden removal duties.
Whayne has made a significant investment in supporting Armstrong and its fleet of Cat equipment, with staff and facilities in the area dedicated solely to Armstrong.
Whayne delivered the first fleet of 25 machines to Armstrong’s sites before the company had even received all necessary permits — which meant every machine was ready to go on day one of open mining.
Steve Ingram, an account manager with Whayne Supply, says this initial support set the tone for a long and successful relationship, which includes the purchase of additional equipment as well as ongoing support.
Armstrong currently has 70 machines covered by Maintenance and Repair Contracts (MARCs), with scheduled preventive maintenance and machine rebuilds to help keep availability high.
In return, Armstrong helps Caterpillar and Whayne with product testing. The company participated in a field follow program for the D9T Track-Type Tractor and then purchased the machine in 2012. Armstrong also participated in a Tier 4 Final field follow in July 2013.
“We may have as many as 20 technicians working for Armstrong at a time depending on their needs,” Ingram says. “They rely on their Cat equipment to keep their operations running, and we’re committed to making sure they get the performance and reliability they expect.”
Even the dragline, which was made by Bucyrus-Erie well before Caterpillar acquired the company in 2011, falls under Whayne’s commitment to fast and reliable service.
“Earlier this year, Armstrong placed an order for new rails and rollers for their 770B dragline,” says Jeff Coomes, product support account representative with Whayne Supply. “With machines of that size and age, parts are made as ordered, so we had projected a wait of nearly 26 weeks for the new parts.”
Unfortunately, the old rails and rollers failed and the dragline had to be derated until the new ones arrived. With production stalled due to the dragline’s failure, Whayne stepped in to help expedite the order at the factory. The new parts were delivered four weeks early, allowing Armstrong to get back to work sooner than anticipated.
Taking the relationship underground
The relationship that Armstrong has with the Cat dealer was an important consideration when the time came to start Lewis Creek’s underground operations, even more so since the company joined its sister company Walker Machinery to form Whayne-Walker Underground Mining. The new organization was created to sell and support the new Cat products acquired from Bucyrus.
“They called us shortly after we acquired the new underground equipment and were interested in looking into Caterpillar as a supplier,” said Jack Nolen, an account manager for Whayne-Walker Underground, who had worked with Armstrong on other mines.
While Caterpillar could be considered a newcomer to the underground coal market, Allen says the strong relationship with Whayne gave his company the confidence to invest in Cat equipment.
“We were concerned about it being a new line of equipment, obviously,” he says. “But once we realized we’d be working directly with Whayne we decided that it was worth looking into.”
Taking delivery of a complete fleet
In the fall of 2012, Lewis Creek took delivery of the world’s first full fleet of Cat Room and Pillar mining equipment.
All told, Armstrong purchased two complete sections of equipment. Lewis Creek currently runs four CM235 Continuous Miners, eight FH110 battery-powered Face Haulers, four RB220 Roof Bolters, two FB110 Feeder Breakers, five battery-powered SU488L Scoops and one SU488D Diesel Scoop. Armstrong also purchased five Cat Belt Terminal Groups for the underground conveyor system that carries coal to the surface.
In addition to the equipment itself, Whayne-Walker Underground provides the responsive support that Armstrong has come to rely on for its surface equipment.
“We have one on-site service rep at the mine every day, and we usually have another person or two staying closely tuned to the health of the equipment as well,” says Nolen. “They work closely with the mine and other Whayne personnel to get issues resolved quickly, and because of that our availability has been excellent.”
Nolen believes the strong relationship has helped both the dealership and customer manage the learning process and ensure success of the first Cat room and pillar fleets.
“This has been an evolving process since day one, and both we and Armstrong are learning more and more every day. Our success to this point has been the result of a strong core of local people on both sides who have gone above and beyond the call of duty to ensure success — for us and our customer,” says Nolen.
In addition to dedicated personnel both at Lewis Creek and in its offices, Whayne-Walker Underground has established an on-site consignment parts store at Lewis Creek. This allows Armstrong to have commonly used or vital parts close at hand. Since all but the most critical maintenance tasks are done underground, ready availability of parts can be the difference between a quick restart and a costly stretch of downtime.
Preventive maintenance plans are in place, as well as scheduled rebuilds of some machines, to maximize performance and decrease Armstrong’s total cost of ownership.
According to Nolen, the existing relationship also simplified the logistics involved in beginning the new operation.
“Our parts fulfillment structure is already in place, and we already make deliveries out there. It saved us a lot of time setting up that network, and that in turn put Armstrong in a better position to succeed,” he says.
With clear channels of communication and a long history, these two organizations have successfully added a new dimension to a successful existing relationship.
“We have a great long-term working relationship with Whayne,” says Rick Craig, Armstrong’s vice president of operations. “When we have issues we can bring them to Whayne, and when they have issues they can bring them to us. It’s a partnership between us, and that’s the way it’s supposed to work.”
Managing the impact
The two companies also share a focus on sustainability — recognizing the impact machines and mining operations have on environments and communities.
Armstrong is in the process of removing overburden and coal at sites throughout Kentucky. At Lewis Creek, above-ground reclamation is a daily process. Once the underground site has finished extracting coal, that area will be reclaimed as well.
“We have a strict policy on reclamation: Leave it better than it was before,” says John Bruce, general superintendent for surface operations. “We want to return the land to its original state.”
This policy includes returning the land to its approximate original contour by moving earth and rebuilding hills. It also includes re-digging any streams, brooks or gullies that helped to naturally irrigate the land before Armstrong arrived.
“We want to make sure this land is capable of sustaining the natural ecosystem that was here before we were,” says Allen. “We have a duty to the people who’ve trusted us with it. We want to make sure we plant only native species, so we don’t upset the balance of the area. And we make sure all our reclamation efforts are sturdy enough to withstand a hundred-year storm, so they don’t collapse the first time the weather gets bad.”
In addition to efforts to reclaim the land it operates, Armstrong works hard to protect the air quality of the region. The company makes it a priority to purchase machines that are designed to reduce emissions as much as possible, and has participated in test projects of equipment that will meet the next generation of emissions standards.
Being a good neighbor
At the same time it works to minimize its impact on the environment, Armstrong focuses on increasing the positive impact it has on the communities where it operates. For example, the Lewis Creek mines are in Ohio County, an area that previously experienced very high unemployment rates. Since the mines began operation, unemployment has been reduced, thanks in part to 177 workers employed on site, as well as the local businesses and industries that support the mine and its employees.
Whayne Supply and Whayne-Walker Underground also focus on providing employment opportunities. For example, the dealer sponsors area students participating in Caterpillar’s ThinkBIG dealer technician training program, and funds a scholarship program for local residents.
Both Armstrong and the dealer are active community members — donating time, leadership and funding to local organizations and charities. “Armstrong has received a lot of support from the state of Kentucky and the people who live in the communities where we work,” said Allen. “We owe it to them to help improve the area in any way we can, so that we can all enjoy this beautiful land for many years to come.”