The Free Press, Mankato, MN

April 21, 2014

Digging In

Coughlans ready to mine silica sand

By Tim Krohn tkrohn@mankatofreepress.com
The Mankato Free Press

---- — For many generations the Coughlan family has been involved in mining along the bluffs north of Mankato.

The family ran Mankato Kasota Stone, taking out the buff-tone Kasota stone prized for use in buildings across the state and nation.

But last July, after 128 years, following the economic downturn that slowed new construction, the family closed the stone quarry. Once home to at least a half dozen companies mining Kasota stone, the closure left Mankato with only Vetter Stone.

While the Coughlans are out of the stone quarry business, it didn’t mean they were ready to stop getting their hands dirty digging around in quarries. Since 2010, brothers Bob and Joe Coughlan, along with Scott Sustacek, have been exploring mining for silica sand in the old stone quarries – sand that has grown in demand thanks to the expansion of domestic oil and gas production.

The Coughlans formed Jordan Sands, naming Sustacek as CEO, to move ahead with the plan to mine about 70 acres and use 40 acres to process the sand.

Brett Skilbred was brought in as director of project development and was deeply involved in the permitting process for the project.

Skilbred has also been named, as an industry member, to a state task force whose mission is to study silica mining issues and make recommendations to state agencies and the Legislature.

“It was an obvious next step. The quarry business is just in our blood,” Bob Coughlan said. “The demand for (silica) is increasing so we think it’s a good long-term business.”

The family, through its Coughlan Cos., had long ago diversified into other lines of business, including financial and manufacturing and Capstone Press, a major publisher of children’s books and digital products.

Sustacek had a 21-year career with Nystrom Inc., a commercial building products manufacturer, serving as CEO since 2005.

“Bob Coughlan and I have known each other seven years,” Sustacek said. “We met at a CEO roundtable we were members of and built our relationship from there. The Coughlans are very unique business people. I have a great deal of respect for them.”

After a bruising battle to get the project approved by state regulators and by Lime Township and Mankato, Jordan Sands is poised to begin the next phase of the family’s mining heritage.

The perfect sand

Groundbreaking for the project is this spring with the plant to open in the fall, at which time it will employ 25 to 30 people.

The sand operation will be in the existing Jefferson Quarry, which has long been used for extracting Kasota stone, used for building construction.

The operation will consist of a wet operation adjacent to the mining site, west of County Road 5/Third Avenue, a dry plant on the east side of the highway and a rail loading site.

“The wet plant washes the sand and takes out any impurities — clays or anything that might be in the sand. It does an initial sizing of the sand, then it goes through a slurry line to the dry plant,” Sustacek said.

The washed and strained sand then sits to allow water to leach out, then it goes into a large industrial dryer that dries it and sizes it more precisely for different types of uses.

Then the silica will be put either into a storage silo on site or onto a rail car.

“We’ll be making three sizes initially. Size depends on what it’s being used for. The larger sand is for oil (drilling) and the smaller for natural gas,” Sustacek said.

Minnesota is noted for the high quality of silica sand, which is very round grains and is very hard. “They’re perfect for hydraulic fracturing, which is done far underground, under great pressure,” Sustacek said.

The Oneota Dolomite Formation near Mankato has historically been a source for cutting and extracting limestone blocks for building stones. Immediately below the Oneota Dolomite Formation lies the Jordan Sandstone Formation, a Cambrian Age sand deposit.

There are several formations of sand deposits in the state, including the Jordan, Wonewoc, Mount Simon and St. Peter formations. The Wonewoc and Wisconsin deposits contain more clay but are easier to extract as they’re closer to the ground.

The Jordan Sands Co. will be mining from the Jordan deposit.

Coughlan said that up to a quarter of their business will be supplying sand for making glass bottles. “This is a nice clean, clear silica that doesn’t have a lot of iron deposits. It makes it nice for clear glass.”

Jordan Sands will be extracting a half-million tons of sand a year, shipping most of it to Texas, Oklahoma and Colorado. Everything will be delivered by rail.

The company is permitted for about 15 years of mining, but there are extensive silica deposits beyond what will be used in that time period.

Long before “hydraulic fracking” became a common term, silica was, and still is, used in a variety of applications.

“Silica is used in a lot of places. We’ll be developing other markets. Foundries like Dotson and others all over the country use it. It’s used in construction, it’s used in shingles,” Sustacek said. The sand is even used in golf course sand traps.

A long battle

When the initial plans for Jordan Sands were introduced for review and approval in Lime Township, just north of Mankato, a fierce statewide debate was under way about new silica operations planned in Minnesota, mostly among the bluffs of southeastern Minnesota.

Countless meetings, petitions, environmental reviews, letters to the editor and public hearings ensued before all of the permits were approved to allow Jordan Sands to move ahead.

“I think we always felt we had a good project here and it just took longer to get everyone else to see the quality of the project. To see what we were doing and how we were going about it,” Sustacek said.

“We’re pleased we went down that path because ultimately the project proved itself out with people. A lot of this just got caught up in the statewide issue.

Coughlan said the longer-than-expected process made them ensure they would do everything to the highest standards.

“It was a vigorous process, but I’m glad we went through it,” Coughlan said. “We learned how to do it right. I’ve seen where some folks in the industry take it very serious and others are more relaxed. You have to do it seriously, you have to be very professional.”

Numerous concerns were aired about the project, from the idea of oil fracking itself (although fracking isn’t done in Minnesota), to increased truck traffic, concerns about water wells and the potential dangers from the tiny dust particles that can blow from a silica operation.

The company said he has multiple approaches to keeping dust from causing problems. A dust-collection system inside the dry plant will trap dust there.

“Fugitive dust just blowing around (outside), we have a plan for that, too. What we’ll have to do on a constant basis is measure moisture content of the sand on our property. If it slips below a certain moisture content, we will add water. That level is in our contract,” Sustacek said.

“Another thing is we voluntarily agreed to put air-monitoring systems at the borders of our property that will measure ambient air every six days. It’s reported to the state and Lime Township.” He said a few silica operations in the state have already been doing the air-monitoring systems, and so far there has been nothing recorded that indicates a danger of the dust getting off site.

He said Jordan Sands will not be a huge user of water. “We’ll have an appropriations permit from the DNR that will show a large appropriation, but we’re really mostly just moving water on our site,” Sustacek said. “We move water from one area so we can mine there and that just stays in the system. We’re just moving water around the site.”

Once sections of mine are exhausted, reclamation will begin.

“There will be continuous reclamation. As we mine we will reclaim right behind what we do. There will be a lot of green space, open space. It could be used for housing, other industrial. There will be some decent-sized bodies of water.”

He said they will borrow some reclamation ideas from nearby Unimin mining in Ottawa, which has long been mining silica sand and reclaiming the prairie.

“Unimin has done things the right way and set a standard with the Kasota Prairie on how to do a great reclamation. So that is something we want to aspire to,” Sustacek said.

Beth Proctor, a biology professor at Minnesota State University, a member of the Lime Valley Township Board and a nearby resident of Jordan Sands, was deeply involved in the permitting process for Jordan Sands.

She said that from the start her goal wasn’t to block the project, as some others had hoped for. “My goal was to have it done safely. I think the whole state is wrestling with the issue of silica sand mining and processing.”

She believes everyone had a fair say in the process leading up to the approval of Jordan Sands, even if not all are happy with the outcome. But she said important unknowns remain about silica mining.

“From my perspective, the important issue is ground water and drinking water and what is the end result,” Proctor said. “The other concern is the air.”

She said that while the state is taking a more serious look at those issues, findings are slow to come.

“What’s frustrating is how slow things move at the state level. I think the process is working as well as can be expected given what we have going on on the state level,” she said.