Alliance Coal (ARLP) officials could be sitting on a small fortune in untapped resources, according to officials from the University of Kentucky engineering department who spoke at a roundtable in Providence on Wednesday attended by U.S. Senator Rand Paul.

For the last several years, a research team from UK has literally made the former offices of Dotiki Coal Mine on Highway 120 in Providence its home, working day and night in a makeshift laboratory while sleeping on site. The result of the ongoing study is an estimate that ARLP has approximately $1.4 billion in rare earth elements (REE) already mined and just waiting in one coal refuse or waste pile that has been collected over the mine’s 60 year history.

At least four to five such piles exist around Webster County.

The group of minerals collectively known as REEs are quickly becoming the most in demand resource on the planet. They are required for the construction of all high-tech products, from cell phones to electric cars. They are also used heavily in military equipment and vehicles.

But according to project manager, Dr. Rick Honacker, there aren’t any REEs currently being mined in the United States. In fact, over 60% of the worldwide supply of REEs come from one source, the People’s Republic of China.

Most of the 40% not owned by the Chinese, he explained, still gets filtered through China for processing.

“When you depend on one country for the entire supply chain, that is a problem,” Honacker stated. “The current administration has the opinion that they are going to look at the international market to buy supplies. But with China, you have no idea what would happen if they decided that wanted to start producing electric vehicles. They could halt the entire supply chain.”

What the project has proven is that REE seams occur naturally alongside coal seams.

“When you mine, 99% of what you get is not rare earth elements,” Honacker said. “They are generally a by-product. When you wash the coal, it is ready to be used to generate electricity. That coal itself does not include the rare earth elements.”

After coal is washed at a prep plant, the material cleaned off of the coal—commonly called refuse or ‘gob’—is relocated to a refuse pile elsewhere on mine property, where it is typically covered with dirt and seeded with grass. Historically, from that point on its forgotten about.

While Honaker says the Federal Government is currently not interested in permitting any REE Mines in the U.S., the material at the Dotiki Mine has already been mined. He said that the primary refuse pile they are currently looking at on the former Smith Coal property in Providence contains roughly 127.5 million tons of refuse. That pile is believed to contain around $1.4 billion is salvageable REEs.

The frame work for building a commercial processing facility in Providence has already been built, but Honaker estimates additional investments of around $238 million will be necessary to move from research to actual production.

As federal grant funding for the project has begun to dry up, UK has partnered with Mountain Pass Materials, a California -based REE process facility, the only such facility in the U.S. Last month they were awarded a $3 million award from the Department of Energy (DOE) to complete a feasibility study about building the local processing plant.

If constructed, the local plant would employ around 96 workers. That facility would then process the REEs already mined in Webster County. Some elements could be completely processed and ready for sale on site. Others would be turned into a concentrate which will then be delivered to Mountain Pass, where MP Materials will leverage its existing capabilities to refine and extract the individual rare earth elements before reducing them to metal.

“We want to see something more come from our Kentucky coal,” Senator Rand Paul stated. “My job should be to try to help people who are trying to create jobs’ job easier.”

Heath Lovell, vice president of public affairs for ARLP, stated that creating jobs was his company’s goal.

“Alliance is more than just a coal company,” he said. “This is where our workers are. This is our home here in western Kentucky. We are looking at projects such as this to continue to invest in this area.”

Although Dotiki ceased operation in August of 2019, there were still several years of coal left in the number 13 seam in which it was mining. Honaker said that of all the coal seams that his team has looked at around the country, none showed the potential of the coal located in Webster County.

“This number 13 seam is special,” he said.

Eventually ARLP could attempt to continue mining that coal, processing the refuse rather than mining it. Potentially they could also return to the existing mine works and attempt to reclaim REEs still in the ground.

Contact Matt Hughes at matt@journalenterprise.com or 270-667-2069

Contact Matt Hughes at matt@journalenterprise.com or 270-667-2069