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County will continue to operate, along with the North surface mine in Mingo and Logan counties, Black Castle Mining's surface mine in Boone County, and Republic Energy's Republic and Workman Creek surface mines in Raleigh County. Additional technical and other support services for these mine operations also saw the WARN extension notices expire without a reduction in force. The WARN notices were initially issued on July 31 and included 11 different surface mining operations in West Virginia plus some support operations. Eight of the 11 received WARN extensions on September 26, two were idled due to sustained weak market condi- tions and government regulations challenging the Central Appalachian mining industry. One other, Alex Energy's Edwight mine, continued to operate without extending its WARN notice. Alpha officials said the longer-term plans for the mines included in the WARN expiration will continue to depend upon market prices and demand. Patriot Eyeing Kentucky Job Cuts Recently, Patriot Coal officials warned of "substantial" cuts to its workforce at two mining complexes in western Kentucky. The pro- ducer said December 5 that it has already issued Worker Adjustment and Retraining Notification Act (WARN) notices to all employees at the Highland complex near Henderson and Dodge Hill complex in Sturgis. Together, the mines employ 670 individuals. In 2013, the operations produced a total of 3.9 million tons. While Patriot did not indicate its plans for the mines themselves, officials did say that management is "evaluating various strategic options" for Highland and Dodge Hill. Cliffs, Coronado Ink Deal for Logan County Coal Furthering its progression away from coal in favor of its iron ore portfolio, Cliffs Natural Resources confirmed it will sell its Logan County Coal assets in southern West Virginia to Connecticut-head- quartered Coronado Coal II LLC for $175 million. Ohio-based Cliffs said the deal, made up of cash as well as the assumption of liabilities, is pending regulatory approval and should be completed by the end of the year. The miner expects to record a loss on the sale of between $375 million and $425 million pre-tax for the fourth quarter. It confirmed it will likely use the transaction's proceeds to repay debt obligations. n e w s c o n t i n u e d T O P 1 0 C O A L - P R O D U C I N G S T A T E S Rio Tinto Adds Thermal Resources in Australia Rio Tinto Coal Australia posted a significant increase in thermal coal reserves and additional resource estimates at its Hunter Valley assets in New South Wales, Australia, over 2013 guidance. Coal reserves increased by 546 million metric tons (mt), from 1,331 million mt to 1,877 million mt. Total resources (excluding reserves) increased by 369 million mt, from 2,349 million mt to 2,718 million mt. "The coal assets managed by Coal & Allied in the Hunter Valley are truly world-class and offer a large, contiguous footprint within the most attractive sections of the coal district," said Chris Salisbury, managing director, Rio Tinto Coal Australia. The coal assets are shallow, thick seams with little geological faulting. "This discovery of greater coal reserves and resources is the result of more than a year's work." The update is based on a rigorous examination of all of the Hunter Valley leases that involved analyzing a vast legacy dataset gathered over decades from approximately 13,000 drill holes; transforming the strategic mine planning processes and tools used to estimate reserves; and adopting more efficient resource estima- tion methods. Mitsui Invests in Vale's Coal Project in Mozambique Mitsui & Co. Ltd. has made a significant investment with Vale S.A. regarding the Moatize mine and the associated rail and port infra- structure project, referred to as the Nacala Corridor, in Mozambique. Mitsui purchased a 15% interest in the Moatize mine for $450 million, and a 50% interest in Vale's investment in Nacala Corridor for $313 million. The amount for the mine will be adjusted based on the future actual performance results of the Moatize pro- ject, so the final payment amounts could vary based on the condi- tions of the contracts. The Moatize mine is currently billed as one of the largest, cost- competitive operating coal mines as it has a huge coal reserve amounting to 690 million metric tons of metallurgical and thermal grade coal, and its coal seams are shallow, which enables a large- scale open-cut operation. Vale began its production in August 2011, and now exports coal via Sena railway from the Port of Beira, which is about 600 km south of the mine. The annual production in 2013 was 3.8 million tons. Vale has now been expanding the annu- al production capacity of the mine up to 22 million tons, which is expected to be reached in 2016. The expected expansion cost is approximately $2.1 billion, part of which Vale has already paid, and Mitsui's future payment for the expansion cost on a pro-rata basis is expected to be $190 million. The anticipated mine expansion would produce more coal than Sena rail and port capacity. There is a plan to construct the new Nacala Corridor infrastructure, to ship coal from the Port of Nacala, 912 km east of the mine. The Nacala project requires the upgrade of the 682-km existing rail line, which runs across Mozambique and Malawi, and the con- struction of the new 230-km rail line and new construction of a coal terminal in the Port of Nacala and development of general commodities terminals. By managing such infrastructure effective- (in Thousand Short Tons) Week Ending (12/6/14) 2014 2013 % Change Wyoming 363,360 361,962 0.4 West Virginia 106,014 106,166 -0.1 75,628 -0.1 Pennsylvania 54,902 51,657 6.3 Illinois 51,877 49,113 5.6 Montana 39,817 39,469 0.9 Texas 39,677 39,851 -0.4 Indiana 36,994 36,621 1.0 North Dakota 27,200 25,786 5.5 Ohio 23,195 23,781 -2.5 U.S. Total 924,784 921,099 0.4 Continued on p. 6... December 2014 www.coalage.com 5 W O R L D N E W S ¸ ˛ ˝ ¸