Chuitna Coal Project - Proposal

Proposal

The Chuitna Coal Project is a proposal of PacRim LP, a Delaware-based corporation, which holds a state lease to 20,571 acres (83.2 km2) of Alaska Mental Health Trust property where an estimated 1 billion metric tons of low-sulfur, sub-bituminous coal is thought to exist. Proven reserves are reported to be 771 million tons. The company is in the advanced stages of state and federal mine-permitting processes. PacRim has surveyed three Logical Mining Units, or LMUs, within its lease. If permitted, the company has said it plans to extract up to 12 million metric tons of coal from the first of these units over a minimum period of 25 years. Other LMUs, could be developed in future years.

The surface coalmine itself could eventually spread to cover 30 square miles (78 km2), but the project also would include assorted support facilities, a mine road and a 12 miles (19 km) long, covered conveyor system to transport coal to Cook Inlet at Ladd Landing where a port facility would be built. Ladd Landing is property owned by the Kenai Peninsula Borough and subject to a lease-option held by PacRim. A letter of intent to exercise the Ladd Landing option was filed by PacRim in March, 2009. For more, see Lease-Option History section below.

Only about 10 percent of Alaska's electricity is generated by coal, all of which is produced by the Usibelli Coal Mine, near Healy, Alaska. That operation supplies six Interior Alaska power plants and ships its surplus overseas. Currently, Alaska's coal-fired generating capacity has no need for the coal that would be produced at Chuitna. Thus, coal extracted from the Chuitna project would most likely be shipped to Asian markets, including South Korea, Japan and Mainland China, with other possible markets being Mexico and Chile.

Interest in exploiting the resources in the Beluga Coal Fields has waxed and waned over the decades since the late 1960s, with the lease passing through a succession of corporate hands. The proposed Chuitna Coal Project has both proponents and opponents and is becoming increasingly controversial in the Cook Inlet region.