September 8, 1987, Usibelli Coal Mine, Inc.

Usibelli Coal Mine, Inc. (UCM) is a fourth generation, family-owned, business and the only operational coal mine in Alaska. Emil Usibelli founded the company in 1943. His son, Joe Usibelli is the Chairman of the Board of Directors. Joe Usibelli Jr., Emil's grandson, is President of UCM.

Mining began in Healy in the early 1900s in an area known as Suntrana. An abundance of naturally exposed outcroppings of coal seams is highly visible and resulted in the Alaskan pioneers tunneling directly into the coal seams to secure fuel for steam driven riverboats and the railroad. Underground mining operations began to prosper in the Suntrana area. Many of these historic mine sites are located in the Healy Creek Valley.

Emil Usibelli was an Italian immigrant who came to Alaska in 1935. He worked as an underground miner in the Evan Jones Mine near Palmer in the Matanuska Valley. A year later, he moved to Suntrana and worked underground for the Healy River Coal Company. After being laid off due to injuries sustained while mining, Emil started a logging operation and supplied timbers to the Suntrana Mine.

During World War II, Ladd Army Air Field in Fairbanks became an important military base. To reduce its dependency on a single fuel supplier, the military began exploration work on military coal reserves east of the Suntrana mines in an area known as the Healy Creek Valley. Emil Usibelli was hired to do that exploration work.? In 1943, Emil and a friend Thad Sandford decided to go into the coal mining business.? They were among several others who obtained coal leases from the U.S. Army. With a one-year contract to supply 10,000 tons of coal to the U.S. Army's Ladd Army Air Field (known today as Fort Wainwright U.S. Army post), Emil began operations with a small International TD-40 dozer and a converted GMC logging truck.? The dozer was used to push the overburden off the coal outcrops and then push the exposed coal into the truck bed. His methods of mining were viewed with skepticism by the underground miners but he met his contract obligations.

Emil's surface mining operation was a success. In 1948, he bought his partner's share of the business and Usibelli Coal Mine was incorporated under the laws of the Territory of Alaska. Emil persevered through tough times in the early years of the business, upgrading equipment and facilities while working to make his surface mining methods more efficient and cost effective. During the 1950s, UCM gradually increased its share of the military's growing coal demand and in 1954 began its first commercial sales to utilities in the Fairbanks area. In 1961, UCM purchased the neighboring Suntrana Mining Company (the successor to the Healy River Coal Company) and with that purchase Emil became the predominant supplier to the military and to Fairbanks area utilities.

During the 1950s and into the early 1960s, Usibelli operated both surface and underground mines.? As underground coal near the surface became more difficult to produce, the company decided it was both safer and more economical to mine from the surface. UCM has conducted surface mining operations exclusively since 1962.

During March 1964, Joe Usibelli at the age of 25 returned from graduate studies in mechanical engineering at Stanford University to take over management of mining operations in the community of Usibelli, Alaska.? Joe remained President and leader of the company until 1 August 1987 when his son Joe Jr. took the helm as President. Joe Usibelli currently serves as Chairman of the Board of Directors.
Construction of Golden Valley Electric Association?s (GVEA) mine mouth coal burning power plant was complete in 1967. GVEA Unit #1 is a 25-megawatt plant.

In 1971, UCM purchased the neighboring Vitro Mine and became the sole producing coal mine in Alaska.

During the late 1970s, UCM began the process of moving operations from the Healy Creek valley to the Poker Flats area in the Hoseanna Creek Valley. In Poker Flats, three seams of coal were mined: seam numbers 6, 4 and 3. The seams are numbered from the bottom up which is based on the age of the coal. The other coal seams are not mined, either because of their extreme depth below the surface or because the seams are not thick enough to be of economic value.

Adjacent to GVEA Healy Unit #1 is the Healy Clean Coal Project (HCCP). Although not currently in operation, this 50 megawatt coal-powered plant has tremendous potential for providing much needed energy to the electrical grid of the Alaska Railbelt. The HCCP plant is co-located with Golden Valley Electric Association's Healy #1 power plant. The plant is owned by the Alaska Industrial Development & Export Authority. AIDEA has entered into a conditional sales agreement with Golden Valley Electric Association, with the goal of transferring future ownership of the plant from AIDEA to GVEA. Further information regarding HCCP can be found on the GVEA website.

UCM's dragline moved its last load of overburden in Poker Flats Mine on 18 November 2002 and mining began in the Two Bull Ridge area, mining the same three seams of coal. It was no small feat for the dragline to "walk" a distance of two-and -a-half miles from Poker Flats to Two Bull Ridge. The dragline has moved more than 144 million bank (in situ) cubic yards of dirt and exposed 29 million tons of coal since 8 November 1978, when the dragline was first put into production in Poker Flats.? As a comparison, this volume is equal to covering 81,322 football fields with one foot of dirt.

The dragline started the journey from Poker Flats on 18 November 2002 and arrived at Two Bull Ridge Mine five days later on 22 November 2002. It walked a distance of approximately 13,175 feet and took a total of 2015 steps in 29.3 hours of walking for an average of 1.1 minutes per step. Each dragline step covered approximately 6.5 feet.

Gold Run Pass Mine is located 10 miles east of Poker Flats and Two Bull Ridge and has been in production for many years. It was a transition area as operations moved from the Healy Valley to Hoseanna Creek Valley.

The three seams of coal that UCM mines extend about 300 feet below the surface.? The coal seams range between 20 and 40 feet thick, and the overburden and interburden range from 60 to 150 feet thick.

Both overburden and coal can be very difficult to excavate. Explosive blasting is done in order to loosen both materials before they are handled by the "yellow iron" machinery. UCM utilizes a mixture of ammonium nitrate and diesel fuel which is transported, mixed and loaded into each drill hole by a specially designed explosive-powder truck. An explosive sequence can include from 20 to 400 holes in a blast.

In some areas of the pit, a technique introduced in 1982 called "cast blasting" is used to help remove overburden. During a cast blast, the drill holes and explosive charges are designed so that a portion of the overburden is "cast" laterally by the force of the explosion throwing the material into the adjacent mined-out pit. This technique, when it can be used, reduces about a quarter of the amount of overburden that the dragline must handle.

The current rate of coal production at the mine in Healy is between 1 and 2 million tons of coal per year. Coal is delivered to six Interior Alaska electrical generators - including two military sites: Fort Wainwright (U.S. Army) and Eielson Air Force Base, and Healy Unit #1 and #2 of Golden Valley Electric Association - Fairbanks' electric cooperative; Aurora Energy, LLC - a wholesale supplier of electricity and provider of district heat in Fairbanks; and the University of Alaska Fairbanks' power plant. UCM exports coal through the Seward Coal Terminal at the Port of Seward. Since 1985, UCM has provided more than 15 million tons of coal to South Korea. Since 2003, UCM has provided more than 4 million tons to Chile through Glencore, Ltd., a well-known international coal trading company. Since 2008, UCM has shipped more than 1 million tons of ultra-low sulfur coal to Japan. Additionally, UCM has provided test shipments to Russia, Taiwan, Japan, and China.

The Bucyrus-Erie 1300W walking dragline, named by local school children when it began operations at Poker Flats Mine, is affectionately called "Ace-In-The-Hole." The dragline is the largest piece of equipment at the mine and the largest land mobile machine in Alaska. Its sole purpose is to remove overburden, the sandstone and clay or "dirt" that lies on top of the coal seams. Purchased during 1977, it was brought to Alaska on 26 railroad cars and 40 trucks. Once on site in Healy it took 11 months to reassemble and construct. The dragline consists of a 225-foot mast and a 325-foot boom. The total weight of the dragline is more than 4 million pounds or 2,100 tons of iron. The buckets used on the dragline will hold 33 to 42 cubic yards of material and can scoop material 150 feet below the base and deposit it 150 feet above the base. With a 90 degree swing of the boom it takes about one minute to complete one cycle. The dragline crew consists of two operators. One operator sits at the control station while the other makes routine maintenance checks inside the machine. The two operators rotate positions every hour to break the monotony and maintain their sharpest concentration.

The dragline is all electric and is powered by electricity through a large cable that connects to the local utility power system of Golden Valley Electric Association. When the dragline was first connected, the utility power plants could not accommodate the large power swings of the dragline (6-megawatt draw when digging and 2-megawatt regeneration when the bucket was extending). The electrical turbine generators could not keep up with the rapid and large power swings every 60 seconds, causing lights to flicker and other problems. Thus, UCM had to find a way to dampen the power swings.? A 40-ton flywheel system was developed and installed to run electrically parallel to the dragline. This system, called a "Peak Shaver," was installed in a separate building and connected to the same electrical power line as the dragline. During normal operations, the dragline executes three motions: drag, hoist, and swing every cycle (60 seconds).

When the dragline is dragging the bucket to fill with dirt and hoisting and swinging to dump the load, it demands large amounts of electrical power. After dumping the dirt on the spoil pile and swinging back into the pit for the next load, the dragline generates power as it electrically slows down the swing motion and lowers the bucket. The "Peak Shaver" trades power with the dragline as it operates, slowing down and generating power when the dragline is drawing power, and speeding up and drawing power as the dragline is generating power. This isolates the utility power system from the large power swings of the dragline.
The fourth motion of the dragline is the walking motion. Its movement is accomplished by lowering the float-like "shoes" on each side of the dragline and lifting the back. As the "shoes" go through a 60-second cycle, they drag the entire machine backward seven feet and then lower it to the full down position on the ground.

Coal and overburden are moved by large trucks affectionately called "yellow iron."? The haul trucks are each capable of a 150-ton cargo load. The Caterpillar 785 trucks weigh 250,000 pounds empty and 550,000 with a full load. Because coal is less dense than the dirt these trucks are designed to transport, UCM maintenance crews add the tailgates in order to accommodate a larger volume of material. UCM applies a local modification to the beds by adding an extra foot in width to each side of the box to accommodate the increased volume of coal. These modifications increase productivity and are an economic advantage to operations. The engine exhaust on the trucks is modified at the factory to run through the beds and keeps the metal surface heated during the winter. This modification prevents freezing of the warm moist overburden or coal to the bed in the unique Alaskan winter environment.

UCM ?Yellow Iron? includes:

Excavators:

• Bucyrus-Erie 1300W walking dragline, 33 c.y.*
• O&K RH170 shovel, 26 c.y.
• O&K RH120C backhoe, 16 c.y.
• Hitachi EX1900, 15 c.y.
• Caterpillar 992G wheeled loader, 16 c.y.
• Caterpillar 994D wheeled loader, 26 c.y.
• Caterpillar 966F wheeled loader, 5 c.y.
• Caterpillar 385C-L
• Volvo EC210C L
• Volvo L350F
• * cubic yards (c.y.)

Drill:

• Drilltech D60K21, tracked drill
• Ingersoll Rand DMM-2, tracked drill
• Terex-Reedrill SKS-W, tracked drill

Dozers:

• Caterpillar D6M
• Caterpillar D6N
• Caterpillar D9R
• Caterpillar D10R (2)
• Caterpillar D10T (2)
• Caterpillar D11R-CD, carry dozer
• Komatsu 475A-5

Trucks:

• Caterpillar 785, 150-ton (8)
• Caterpillar 777, 100-ton (2)
• Caterpillar D350E, articulated,
  six-wheeled truck, 35-ton

Tipple:

• Storage capacity: 6,000 tons
• Rail loading capacity: 2,800 tons/hour
• Crushers -700 tons/hour
  • Primary: feeder-breaker (-8")
  • Secondary: double-roll (-2")
• Twin double deck - Svedala coal screen
• Highway truck load-out system
• On-line coal analyzer
• Retail sales conveyors and stockpile

Road Maintenance:

• Caterpillar 16G, grader
• Caterpillar 16H, grader (2)
• Caterpillar 16M, grader
• Water truck 75C, 14,000-gallon
• Water truck 325M, 30,000-gallon

Support Equipment:

• Low Boy: Kenworth off-road tractor with 250 ton low-boy trailer
• John Deere 990 Tractor
• Crane: Bucyrus Erie 61-B, 150-ton
• Crane: Omega 65
• Crane: Hyster H60C
• Kenworth C500B, fuel service truck
• International 8100, fuel service truck
• Volvo A40 D, fuel and lubrication truck
• Western Star, tire repair truck
• A variety of light and medium-duty service trucks