LINCOLN - The city of Lincoln will consider expanding the Lincoln-Logan Enterprise Zone to pave the way for a $20 million expansion at an Elkhart coal mine, a move the company said would preserve jobs.

If approved, the city would benefit from a $10,000 annual administrative payment from Viper Mine, owned by International Coal Group. The zone expires in 2017.

ICG plans to build a third shaft on the west side of Interstate 55, north of Williamsville. The addition would enable Viper Mine to produce about 2.8 million tons of coal per year. Inclusion in the enterprise zone would provide the company with two tax breaks and about $1 million in savings.

Mine officials said that without the expansion project, Logan County jobs could be lost.

"Our coal mine is more than 20 years old, and we finally got approval from our corporate office in West Virginia to expand," company Controller Victoria Kennedy said. "We just had a concern that the mine would squeeze shut, and we would lose those jobs. We hope that never happens, but the possibility is there."

The expansion would ensure the retention of 260 jobs and create 18 more. Expansion could start in January and end by September 2011.

"This is similar to what we have done before," City Attorney Bill Bates said. "The city receives the administrative fee, but you have to be cautious because you are using up the capacity for the enterprise zone."

Phil Mahler, Logan County Regional Planning and Zoning Commission director, said the enterprise zone would still have about 2,600 acres.

"I would love it if someone would come in and use the remaining four square miles, but we still have sufficient space left," Mahler said. "And if we need more space, there are some areas we can delete from the zone that aren't being used."

The council will vote on the agreement Monday. The Logan County Board and the city of Elkhart already have approved the project. DeWitt County and Sangamon County also must approve it.

kbarlow@pantagraph.com