COAL COUNTRY - Oliver County could be the second county in North Dakota with two coal mines in operation, along with Mercer County, pending approval of an application for a new mine there.

North American Coal Corp. filed a permit application Tuesday for a 5,400-acre coal mine located about two miles northwest of Center, angling another three miles in the same northwesterly direction between highways 25 and 31. About 12 farms would be mined through in this initial phase.

After two very quiet decades for new coal mines, this is the second permit application filed this year. South Heart Coal, a subsidiary of Great Northern Power Development, filed for a permit to open a small mine near South Heart. It plans to test the coal in a new coal drying facility prior to building a coal gasification plant there and opening a much larger mine.

The South Heart permit application is still under review.

North American's spokesman David Straley said it may start up the new Oliver County Otter Creek Mine as an open merchant mine, meaning it would sell coal to any buyers. This, too, would be a first.

Now, all Coal Country mines sell coal under contract either to a nearby power plant, or the synthetic natural gas plant.

Straley said North American has met with the only other coal mining companies - BNI at Center, and Dakota Westmoreland at Beulah - to talk business strategy and said the Otter Creek Mine could be used to fill those mines' orders for coal, fill in gaps as mine operations begin to run out of coal, or sell to other fuel-load industries like ethanol plants.

"We would like a dedicated contract, but we would sell to whomever," Straley said.

He said the timeline is to finish up the permit application work in 2009 and begin mining 1 million to 2 million tons annually after that, possibly starting in 2010.

The Public Service Commission's mining director Jim Deutsch said the Otter Creek permit will be reviewed and opened to public comment once it's found to be complete.

The mine would employ 60 people and have its own Oliver County headquarters, Straley said.

He said the coal leases in the Otter Creek Mine are some of the "better coal reserves left in North Dakota." He said the coal has a hot burn and low sulfur and is generally fairly shallow at 60 feet to 90 feet deep across the lease.

Center Mayor Richard Zarr said he sees a new mine as a "good deal for Oliver County."

Center just invested $1.3 million in developing 34 residential lots in the Hazel Miner Subdivision and Zarr said he hopes a new mine means new people in Center and buyers for the properties.

Zarr said the only downside is an old "tipple" law that causes Oliver County to share part of its coal taxes with Morton County because Morton County is within 15 miles of the BNI coal tipple for Minnkota Power Cooperative.

"We're suffering the consequences in Oliver County," Zarr said.

The law is intended to equalize coal revenue to counties where the coal isn't mined, but where there is impact to schools, roads and other services.

Oliver County is the only county that shares revenue with another non-coal producing county. Mercer County used to share with Dunn County, but that ended when the Zap Indian Head mine closed in the '80s.

(Reach reporter Lauren Donovan at 701-748-5511 or lauren@;westriv.com)