The Kentucky Public Service Commission issued an order late last week which, documents show, will allow a mining company to open a new mine in Pike County while receiving economic development assistance from Kentucky Power.

The mine, to be opened as MC Mining’s Excel Mine No. 5, represents a transition of MC Mining’s existing Pike County operation, Excel Mine No. 4, as the currently-mined reserves are expected to be depleted in 2020, according to the PSC order.

The company anticipates transitioning its current 211 employees to the new mine, with the addition of six new employees to oversee the operation of the continuous conveyor belt, the order said. The company’s parent, Alliance Resource Partners, the filing said, expects to invest $45 million to $50 million in the development of the new mine, which expects to have an annual production capacity of 1.3 million tons of high BTU, low-sulfur coal.

Under the agreement approved by the PSC, the order said, Kentucky Power will provide a Monthly Economic Development Credit to MC Mining, designed to encourage the $45 million to $50 million capital investment needed for the commencement of operations at Excel Mine No. 5.

“The credits under the Special Contract will also permit MC Mining to have a favorable market position when selling the coal and a favorable price to help offset the upfront costs of constructing the new mine,” the order said.

Kentucky Power, the order said, can suspend the payment of the credits if the new mine is not completed and placed in operation by Jan. 1, 2021, and the company requires MC Mining to repay any credits received if it suspends development of the new mine.

Once MC Mining places the new mine into commercial operation, the order said, it will be deemed to have fulfilled its obligations to Kentucky Power to receive the Monthly Economic Credits under the Special Contract, the order said.

In addition, under the contract, MC Mining has committed to supporting Kentucky Power in its economic development and diversification efforts in Eastern Kentucky in exchange for the credit.

In its order, the PSC commended the two entities for working together.

“The Commission commends Kentucky Power for its efforts to secure the continued employment of over 200 workers and gain MC Mining as an ally in promoting economic development in Eastern Kentucky,” the PSC said in the order.

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