Coal Age

DEC 2014

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tatives met with Cape Breton officials in November to discuss the mine purchase, according to Kevin Saccary, a councilor in the Cape Breton Regional Municipality. Cline's majority ownership in Donkin is expected to comple- ment the company's Foresight Energy subsidiary that owns four deep mines in southern and central Illinois, including the Sugar Camp, Deer Run/Hillsboro and Pond Creek longwall mines and the Macoupin continuous miner operation. A second longwall mining system began operating at Sugar Camp, near Akin in Franklin County, on June 1. Foresight produced and sold 6 million tons of high-sulfur ther- mal coal in the third quarter, up by more than 1.1 million tons from the same period a year earlier. The company realized $49.82/ton from the latest sales, compared to $49.43/ton during the third quar- ter of 2013. Revenue from coal sales increased $59.1 million to $300 million for the July-September period, mostly due to the rise in sale vol- umes. Domestic sales volumes increased 600,000 tons to 4.3 million tons in the latest quarter, a 17.7% gain from a year ago. Meanwhile, sales volumes to international markets climbed by 500,000 tons to 1.7 million tons, a 40.8% increase. For the first nine months of 2014, coal sales volumes increased $120 million to $809.4 million, largely attributed by the company to an additional 2.5 million tons sold over the comparable 2013 period. Domestic sales volumes increased by 2.2 million tons to 11.4 million tons while international tons shipped increased 500,000 tons to 4.8 million tons. Production costs were higher in the first nine months of this year at the Deer Run/Hillsboro mine where an underground fire halted production for nearly a month. Deer Run/Hillsboro also incurred higher subsidence, longwall and roof control costs. Foresight is on track to produce about 24 million tons of thermal coal in 2014 after turning out about 18 million tons in 2013. The company is the largest coal producer in Illinois. DTE Energy Will Upgrade Plants to Comply With EPA Rules Although some or all of the plants may be retired during the next decade, DTE Energy, the parent company of Michigan's largest elec- tric utility, DTE Electric, said it plans to spend about $300 million on pollution controls so its St. Clair, Belle River, Trenton Channel and River Rouge coal-burning plants can comply with federal mandates and continue to operate for the next 10 years or so. Even if the plants are closed in the 2020s, the company still thinks it makes good business sense for its 2.1 million customers in southeast- ern Michigan to equip them with controls to meet the federal Environmental Protection Agency's (EPA) new Mercury and Air Toxics Standards (MATS) rule, according to spokeswoman Randi Berris. Earlier this year, the Michigan Department of Environmental Quality authorized DTE to delay MATS compliance at the four plants until April 2016, a year after the new rule is scheduled to take effect. DTE told the Michigan Public Service Commission in October that most of the upgrades at the plants would include a combina- tion of activated carbon injection and dry sorbent injection technol- ogy to lower mercury emissions. It remains possible that DTE may reduce some of River Rouge's 651 megawatts of generating capacity in 2017 because of the EPA's proposed National Ambient Air Quality Standards. The proposed stan- dards could force the facility to operate with lower heat content fuel. One coal plant that DTE has no intention of shutting down is the 3,000-megawatt Monroe, near the community of Monroe on the western shore of Lake Erie. Since 2000, the company has invested nearly $2 billion on a variety of pollution controls at the big base- load plant that burns 7 to 9 million tons of coal annually. Monroe is the largest power plant in Michigan and one of the largest in the Midwest. In late October, DTE completed the installation of a fourth and final selective catalytic reduction system at Monroe to reduce emis- sions of nitrogen oxide. Production in Kentucky Up Again for Third-straight Quarter Kentucky coal production posted its third-straight quarterly gain in the third quarter of 2014 as western Kentucky, part of the high-sul- fur Illinois Basin, retook the lead over eastern Kentucky, which is in the struggling Central Appalachian coal basin. Statewide coal employment fell to its lowest level in years, with only 11,670 active miners in the latest quarter, according to a report by the Kentucky Energy and Environment Cabinet. Overall, the Bluegrass state produced 19.94 million tons of coal in the July-September period, up by about 60,000 tons or 0.3% from the second quarter and more than 400,000 tons from the first three months of this year. In fact, output in the latest period was the high- est since the third quarter of 2013. Coal production at Kentucky surface mines increased by a mar- ginal 0.9% to 6.6 million tons in the third quarter of 2014, account- ing for 33% of the state's output. During the quarter, underground mines in the state produced 13.3 million tons, virtually unchanged from the second quarter of 2014. Underground mining represented 67% of total production. For years, production in eastern Kentucky far outstripped that in the western part of the state. That changed in the first quarter of 2013 when western Kentucky finally edged out its eastern counter- part. A back and forth then ensued with eastern Kentucky reversing n e w s c o n t i n u e d 12 www.coalage.com December 2014 DTE will invest in pollution control for coal-fired power plants, such as Trenton Channel above. (Photo: James M. Phelps, 2010)

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