Ron Nilson, founder of Ground Force Manufacturing LLC, a Post Falls-based maker of huge support vehicles for open-pit mining operations, says he's forming a separate company that will serve the underground sector of the mining industry and create 100 jobs within two years.

The new company, UnderGround Force LLC, will be located at a 10-acre facility at 6601 E. Seltice Way, where it plans to invest this year a total of $5.5 million in land, building renovations, new construction, and equipment, Nilson says. He expects UnderGround Force's purchase of the property will close next week, and UnderGround Force then will begin moving there, he says.

That site, which currently is occupied by the Post Falls branch of Bismarck, N.D.-based Knife River Corp., has a 10,000-square-foot office and shop building, which UnderGround Force plans to remodel, Nilson says. It also is planning an 80,000square-foot building expansion there and could be completely moved into the added space as early as September, he says.

UnderGround Force currently is hiring experienced fabricators, welders, machinists, and mechanics and is training them at Ground Force, which occupies 65,000 square feet of space in seven buildings on a 6-acre site at 5650 E. Seltice, Nilson says. Wages for those UnderGround Force jobs will be based on skill levels, and the average annual wages in the shop likely will be $35,000 to $45,000, he says.

Nilson says Ground Force, an original equipment manufacturer for Peoria, Ill.-based Caterpillar Inc.'s mining and construction equipment division, fabricates and installs specialized equipment on heavy truck chassis to create some of the world's largest support vehicles, some of which service even larger mining vehicles. The support vehicles include fuel and lube trucks, water trucks, explosive-delivery trucks, and mechanic-service trucks, some of which carry loads of up to 240 tons.

UnderGround Force will outfit similar trucks on a smaller scale to support underground operations. UnderGround Force's trucks, for instance, will handle loads of 2 tons to 25 tons.

Ground Force ships a monthly average of eight trucks, which cost up to $2 million each, and it has a seven-month backlog, Nilson says.

He says historically high metals prices and a worldwide upswing in mining activity is fueling strong demand for mining-support equipment.

"We had a good year in 2010, and we expect a 35 percent increase in revenue in 2011," he says.

"We have more orders on the books than we did in 2010 and enough verbal orders to take us through the year," he says. "Now, we're already talking about 2012."

He expects UnderGround Force's customers will include North Idaho-based Hecla Mining Co. and Coeur d'Alene Mines Corp., and silver, gold, copper, and coal mining operations around the world.

"A third of mines in the world are underground," he says.

Nilson says he met with executives at Caterpillar, in Illinois, as recently as last week to present his plans for UnderGround Force.

"We talked about our vision of products we can build. They were excited about our program and agreed to support it," he says.

The new company likely will include small-profile graders and people movers in its product line, Nilson says.

He's the majority shareholder of both companies, although UnderGround Force will have separate management, products, and marketing programs that will include other part-owners, he says.

Nilson founded Ground Force in 2000, when he bought the assets of Aresco Inc., another mining equipment manufacturer that had been based at Ground Force's current site.