San Miguel Lignite Mine

On January 1, 2011, Kiewit Mining Group was awarded a contract to provide management services to mine and deliver lignite from the San Miguel Mine. The approximately 3.3 million tons of lignite coal is delivered to the adjacent 400-MW San Miguel Electric Cooperative, Inc. power plant who also is the owner of the mine. San Miguel Electric Cooperative, Inc. furnishes power and energy to Brazos Electric Cooperative, Inc. and the South Texas Electric Cooperative, Inc.

The mining process is very similar to our other Texas lignite operations and consists of clear and grub, topsoil salvage, overburden removal, lignite mining, regrade and final reclamation. The overburden removal is achieved using two draglines, a 76 cubic yard machine along with a 30 cubic yard dragline. The 76 cubic yard dragline moves nearly 21 million yards per year of overburden, while the 30 yard dragline moves about 7.7 million yards per year. Assisting the overburden operation is a 19 cubic yard mass excavator with a fleet of 100 ton end dump trucks. The lignite is mined using a specialized mining tool called an Easy Miner. These machines resemble milling machines used to remove and recover asphalt and concrete highway surfaces and provides tight depth control to selectively mine the lignite or remove the parting, as well. Unique to the operation is the daily removal ash from the power plant which is hauled to specified dump locations in prior mined pits. Nearly 2.0 million tons of ashed is hauled annually from the power plant.

As in our other KMG operations, we will supply engineering design, scheduling, maintenance planning, equipment maintenance, and the operations supervision. The primary objective is that the lignite be delivered to the plant at the lowest possible cost per ton with safe mining practices in place while complying with regulatory agencies and the mining permit.