Coal Age

JAN 2013

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news continued TOP 10 COAL-PRODUCING STATES W O R L D (in Thousand Short Tons) Week Ending (12/29/12) YTD '12 Wyoming 398,227 West Virginia 123,240 Kentucky 94,234 Pennsylvania 55,268 Illinois 47,005 Texas 41,400 Indiana 36,790 Montana 34,788 Colorado 29,509 Ohio 28,422 Indian Coal Consumption to Surpass the U.S. in the Next Five Years Coal's share of the global energy mix continues to rise, and by 2017, coal will come close to surpassing oil as the world's top energy source, the International Energy Agency (IEA) said in its annual Medium-Term Coal Market Report (MCMR). Although the growth rate of coal slows from the breakneck pace of the last decade, global coal consumption by 2017 stands at 4.32 billion metric tons of oil equivalent (btoe), versus around 4.40 btoe for oil, based on the IEA's medium-term projections. The IEA expects coal demand will increase in every region of the world except in the United States, where coal is being pushed out by natural gas. "Thanks to abundant supplies and insatiable demand for power from emerging markets, coal met nearly half of the rise in global energy demand during the first decade of the 21st century," said IEA Executive Director Maria van der Hoeven. "This report sees that trend continuing. In fact, the world will burn around 1.2 billion more tons of coal per year by 2017." China and India lead the growth in coal consumption over the next five years. The report says China will surpass the rest of the world in coal demand during the outlook period, while India will become the largest seaborne coal importer and second-largest consumer, surpassing the United States. U.S. Total 1,015,700 YTD '11 436,307 134,286 108,582 59,682 37,789 45,686 37,398 41,849 26,764 28,063 % Change -8.7 -8.2 -13.2 -7.4 24.4 -9.4 -1.6 -16.9 10.3 1.3 1,090,772 -6.9 shore and the other was located and rescued. Koon, who was working near the face, was inside his equipment when it slid into the impoundment and had not been accounted for. Dive teams located the bulldozer and repositioned a pipe with built-in water jets that pushed away the muck so they could see it. Officials Seek Buyers for Willow Lake Peabody Energy's Willow Lake underground mine near Equality in Saline County, Ill., was in a state of flux in early December. Peabody announced plans to permanently close the mine just days after Willow Lake was ordered shut by the Mine Safety and Health Administration following a November 18 fatality. The death of Chad Wayne Meyers, a 30-year-old continuous miner operator, was the second in just over two years at Willow Lake, which recorded the last two mine fatalities in Illinois. Another miner was killed in July 2010. Peabody blamed the closing, set to take place in January, on the mine's rising operating costs, not the fact that the United Mine Workers of America successfully organized Willow Lake earlier this year and was negotiating a labor contract with the company. Southern Illinois politicians, concerned about the loss of 440 full-time jobs in an economically distressed region if Willow Lake closes for good, mounted an 11th-hour effort to find another operator or buyer for the mine and its 25 million tons of reserves. Big Ridge Inc., a subsidiary of St. Louis-based Peabody, has operated the mine. State Representative Brandon Phelps, a Democrat from Saline County, said he and others were contacting coal companies around the country in hopes of locating a possible replacement for Peabody/Big Ridge. The UMWA, meanwhile, continued to negotiate with Peabody on behalf of nearly 30 hourly workers at the nearby Willow Lake prep plant. Union spokesman Phil Smith said the UMWA was surprised by the closing announcement, claiming the two sides appeared to be nearing a final labor agreement for Willow Lake miners. According to an Illinois mining official, Willow Lake's operating costs were being driven up in part by the increasing distances, and longer time needed for miners to reach the working face. N E W S ¸ ˛ ˝ ¸ Westshore Says Repairs Will Take Months It will be months before North America's largest coal exporting facility is fully up and running again after it was damaged by a cargo ship. Denis Horgan, general manager, Westshore Terminals, called the incident "the biggest calamity in our history" and said the cleanup and repair is something "that will take months, not weeks." The berth that was impacted can handle vessels up to 260,000 deadweight tons using a single, rail-mounted shiploader capable of loading at a rate of 7,000 metric tons per hour. Noting the coal port already operates 24/7, Horgan said there's no doubt the loss of the berth, which is the bigger of the two, will impact customers. Fewer trains will be arriving at the terminal and less coal will be stored at the site as a result. Westshore Terminals Ltd. Partnership has filed a lawsuit against the Japanese owners of the ship Cape Apricot that was involved in the collision on December 14. Teck Expects Minimal Impact from Westshore Repairs Teck Resources announced its coal sales for the fourth quarter of 2012 are expected to exceed 6.2 million metric tons (mt), and production for the first quarter of 2013 is not expected to be materially impacted by the damage to Berth 1 at Westshore Terminals. Teck will use alternative shipping options while Westshore repairs the damage, including securing additional capacity through Neptune, Pacific Coast, Thunder Bay and Ridley Terminals. Based on Westshore's estimated repair schedule and expected loading capacity for Berth 2, Teck expects to have total shipping capacity of approximately 6 million mt in the first quarter of 2013. Buckingham Coal Will Get its Day in Court Chinese Demand to Reach 4 billion mt by 2015 According to China's State Council, China's overall annual energy consumption is expected to exceed 4 billion metric tons (mt) by 2015. With a 16% reduction in China's energy consumption per unit of GDP anticipat- More than two years after the legal action was filed, a case involving the United States Department of Justice, as the plaintiff, and defen- Continued on pg 8... January 2013 www.coalage.com 5

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