Coal Age

APR 2013

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news continued the project in early 2011. Afterward, SCH moved the terminal's planned location to a nearby site that already was zoned industrial, eliminating the need for local rezoning approval. Questions Emerge Regarding Trinity's Trustee Trinity Coal Co.'s involuntary bankruptcy case is off to a contentious start in a Kentucky court with the subsidiary of India's Essar Group in disagreement with several parties, including the United States Trustee and the state of West Virginia, over the appointment and financial terms of David Stetson as chief restructuring officer (CRO) for the Central Appalachian coal producer. After three major creditors of Trinity, Credit Agricole SA, ING Groep NV and Natixis, filed the involuntary Chapter 11 petition on February 19 in the U.S. Bankruptcy Court for the Eastern District of Kentucky in Lexington, they asked the court to appoint a trustee to essentially take control of Trinity's business operations while it undergoes reorganization. The three creditors claim Trinity defaulted on bills totaling about $104.3 million. CALENDAR OF EVENTS May 14-16, 2013 Electric Power—will be held at the Donald E. Stephens Convention Center in Rosemont, Ill. Contact: Trade Fair Group (Tel: 713-343-1876; Web: www.electricpowerexpo.com). May 19-22, 2013 Haulage & Loading—will be held in Litchfield Park, Ariz. Contact: Tanna Holzer (Tel: 303-283-0640; Email: tholzer@mining-media.com; Web: www.mining-media.com). June 11-13, 2013 Longwall USA Exhibition & Conference—will be held at the David L. Lawerence Convention Center in Pittsburgh, Pa. Contact: Tanna Holzer (Tel: 303283-0640; Email: tholzer@mining-media.com; Web: www.mining-media.com). June 23-25, 2013 2013 RMCMI Annual Meeting—will be held at the Steamboat Sheraton Resort in Steamboat Springs, Colo. Contact: The Rocky Mountain Coal Mining Institute (Tel: 303-948-3300; Fax: 303-954-9004; Web: www.rmcmi.org). July 23-26, 2013 Mpumalanga Minex 2013—will be held in Middelburg, South Africa. Contact: Jurie Smit, Minex Management (Tel: 27 79 467 0738; Fax: 27 86 719 4581; Email: minex2013@minex.co.za; Web: www.mminex.co.za). July 30-August 1, 2013 32nd International Conference on Ground Control in Mining— will be held at the Lakeview Golf Resort and Spa in Morgantown, W.Va. Contact: Karen Centofanti (Tel: 304-293-3901; Fax: 304-293-5708; Email: KLcentofanti@mail.wvu.edu; Web: www.mine.cemr.wvu.edu). August 11-15, 2013 23rd World Mining Congress—will be held in Montréal, Québec, Canada. Contact: Canadian Institute of Mining, Metallurgy and Petroleum (Tel: 514.939.2710; Web: www.wmc-expo2013.org or www.cim.org). August 20-23, 2013 AIMEX—will be held at the Sydney Showground, Sydney Olympic Park, Australia. Contact: Reed Mining Events, Reed Exhibitions Australia (Tel: 61 2 9211 7544; Email: aimex@reedexhibitions.com.au; Web: www.aimex.com.au). September 11-13 2013 Bluefield Coal Show—will be held at the Brushfork ArmoryCivic Center in Bluefield, W.Va. Contact: The Greater Bluefield Chamber of Commerce (Tel: 304-327-7184; Fax: 304-325-3085; Email: info@bluefieldchamber.com; Web: www.bluefieldchamber.com). September 16-20, 2013 XV International Congress for Mine Surveying—will be held in Aachen, Germany. Contact: RWTH Aachen, Institute for Mine Surveying (Tel: 49 241 80 95687; Fax: 49 241 80 92150; Web: www.ism-germany-2013.de). 18 www.coalage.com Credit Agricole told the court its agreement to provide debtorin-possession financing to Trinity was conditioned on Stetson, who had been employed by the coal company prior to his being appointed CRO. Samuel Crocker, the U.S. Trustee, objected to approximately $115,000 in "additional compensation" to be provided to Stetson in his role as CRO. Such payments are impermissible under federal bankruptcy law, the trustee said. "There is no question that Mr. Stetson, as the CRO, is an insider of the debtors," Crocker told the court. "The key issue is whether these payments were made to induce him to remain as CRO. The United States Trustee believes this to be the case." The West Virginia Department of Environmental Protection said it was concerned that Trinity was seeking to "protect David Stetson in his personal capacity from possible negative effects under the Surface Mining Control and Reclamation Act." The U.S. Department of the Interior's Office of Surface Mining has a role in enforcing the Act. The states of West Virginia and Kentucky each have primacy enforcement responsibility in their respective jurisdictions. The U.S. government took the position that the court did not have the authority to grant the CRO protection for activities taken regarding mining activity that he undertakes as CRO. Further, "the court should not grant such protection if it does not have the authority," said U.S. Attorney Kerry Harvey. In March, Crocker appointed the following Trinity creditors to serve on the official committee of unsecured creditors: David True, president of Austin Powder Co., as interim chairman; Eric Cavanaugh, associate general counsel of Duke Energy Corp., on behalf of Duke Energy Carolinas; and Kevin Lee, treasurer and general credit manager of Whayne Supply Co., on behalf of the Louisville, Ky.-based company. Trinity is the parent of 16 privately held companies in eastern Kentucky and West Virginia. The companies produce both metallurgical and steam coal. Trinity was acquired by Essar for $600 million in 2010. Rhino Anticipates a Reduced Presence in ILB Reasonably priced metallurgical coal contracts signed by Rhino Resource Partners should keep its Central Appalachian mines running this year. But longer term, the Lexington, Ky.-based company anticipates a reduced presence in the region where mining costs are higher than in other areas of the country where Rhino operates. One of those areas is the high-sulfur Illinois Basin. Rhino planned to start preliminary development this spring on its first IB mine, the Pennyrile underground operation in western Kentucky. Rhino has agreed to supply 800,000 tons annually from Pennyrile to an unidentified regional electric utility through 2017, with a contract re-opener for 2018-2020. Rhino acquired the undeveloped mine, then known as Delaware, from Alpha Natural Resources about a year ago. Down the road, Rhino still has a permit to develop a deep steam coal underground mine in Christian County, Ill. During a March conference call with analysts to discuss earnings, Rhino said its total met and steam coal sales dipped from 4.9 million tons in 2011 to 4.7 million tons in 2012. The decrease was blamed on weakness in met and steam coal markets last year, primarily in Central App, driven mainly by an unseasonably mild winter in 20112012 along with an oversupply of low-priced natural gas. Both con- April 2013

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