Bens Creek Operations and Mega Highwall mining enter into mining services contract

Bens Creek Group Plc, owner of a metallurgical coal mine in North America, announced that its wholly owned subsidiary, Ben’s Creek Operations LLC (BCO), and Mega Highwall Mining LLC (MHW) have entered into a mining services contract (the contract). MHW will be responsible for producing BCO’s metallurgical coal reserves for an initial period of 12 months.

Production capacity

The contract provides for a minimum production capacity of 40,000 tpm of metallurgical coal, which is equivalent to 480,000 tpa. MHW will deploy a single high-wall miner, designed to meet the target sales volumes disclosed in the recently signed offtake agreement between the company and Integrity Coal, as announced on October 21, 2021. The excess production of 18,000 rpm can therefore be sold under any future direct debit agreement the company may enter into at prevailing market prices.

Contract details

MHW and BCO have agreed to a fixed price per tonne of coal produced for the duration of the 12-month contract. The negotiated contract price is in line with the company’s working capital forecast, despite increased demand for contract mining services and high-rise mining equipment in the United States. The contract allows MHW to mobilize its equipment and labor to start production in December 2021. The fixed price per tonne is designed to cover:

  • The supply and maintenance of high-wall mining equipment for the production of metallurgical coal.
  • The provision and payment of labor costs required to operate the high wall mining equipment provided.
  • Compliance with state and federal regulations for the operation of high wall mining equipment.
  • The supply of the tools and materials necessary for the maintenance and repair of the equipment made available.
  • Payment of penalties that may arise from using the high wall miner while the equipment is on site and deployed by MHW.
  • Determination and advice on whether particular designated mining areas are considered impractical for exploitation.
  • All demobilization costs / relocation costs associated with moving high wall mining equipment.
  • Insurance designed to cover general liability, automobile liability, industrial accident and employer’s liability insurance.

MHW, founded in 2015, is a Kentucky-based company that operates a line of industry-leading specialty high-wall mining systems, including ADDCAR, Superior Highwall Miners, and CAT. MHW recruits operators from across the industry and is committed to delivering results in a safe and efficient manner. Its sister company, Mega Rebuilders LLC, operates two fabrication shops that allow MHW to produce its own parts and upgrades for the machines it operates. The company’s skill set enables them to operate in a variety of conditions, including working in uneven seams and extreme weather conditions. MHW has a variety of clients based in the mining regions of the United States, with a particular focus on West Virginia, the state in which BCO’s operations are conducted, as well as states such as Kentucky and Alabama. .

Adam Wilson, CEO of Bens Creek Group, commented, “We are delighted to have secured our first high wall miner to meet our planned production target. The agreement with MHW allows us to commission a second high-wall miner to allow the company to further expand its production of metallurgical coal. The nature of high-wall mining is that the ability to recover metallurgical coal via direct mining in coal seams is considerable, allowing production to be targeted at seams that have a higher level of recovery. than traditional extraction methods.

Wilson added, “During our recent IPO on AIM, we set clear operational benchmarks for the company, including signing a mining contract with a third-party contractor. We are delighted to announce this new mining services contract, following on from the offtake agreement we entered into last week. We are now on the right track to begin generating income from our significant mining asset. The global scarcity of building materials strengthens our strategy and our role as a supplier of metallurgical coal to the steel industry.

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