Coal Age

FEB 2015

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2015 after extracting nearly 4.7 million tons in 2014. Broadbent said Murray Energy also is in the process of building a new coal prepara- tion plant at its Ohio County Coal Co. mine, formerly known as Shoemaker, in Marshall County, West Virginia. The pro- ject is aimed at improving the plant's effi- ciency and coal processing capacity, allowing the facility to process up to 1,800 tons an hour, a 38% increase from the existing feed rate. The approximately $45 million project is scheduled to be fully operational in May. "We are also constructing new air and supply shafts and surface facilities, building additional tow boats, and have commis- sioned our fourth equipment manufacturing facility," Broadbent said. Altogether, Murray Energy operates 13 active mines at 12 mining complexes in Northern Appalachia, the Illinois Basin and the Uintah basin in Utah. JV Between Rhino Resources and Patriot Coal is Over Rhino Resource Partners and Patriot Coal Corp. are dissolving their Rhino Eastern joint venture (JV) partnership in West Virginia in a move that leaves Rhino as the sole owner of Rhino Eastern LLC and an estimated 37 mil- lion tons of proven and probable premium mid-volatile and low-volatile metallurgical coal reserves. The Rhino Eastern complex in Raleigh and Wyoming counties had an estimated 43.9 million tons of reserves in Raleigh and Wyoming counties at the end of 2013. Patriot gets certain fixed assets, leased equipment and reserves related to the Eagle No. 3 underground mine, which produced 207,524 tons in 2014, federal Mine Safety and Health Administration figures show. St. Louis-based Patriot also agreed to assume substantially all of the approximately 35-person active work force at Eagle that pre- viously was employed by Rhino Eastern, according to a filing by Lexington, Kentucky- based Rhino in January with the federal Securities and Exchange Commission. Raw coal is trucked from Eagle, near Wharton in Wyoming County, to a prep plant owned by Patriot where it is sized, washed and shipped by truck or one of two rail load- outs located on the CSX Transportation and Norfolk Southern railroads. The transaction was scheduled to close at the end of January. Rhino had held a 51% interest in the partner- ship to 49% by Patriot. The companies gave no public reason for ending the partnership. KCP&L; Plans to Cease Burning Coal at 3 Plants In the coming years, Kansas City Power & Light Company (KCP&L;) will no longer burn coal at three of its coal-fired power plants, Montrose Station, one of its units at Lake Road Station and two of its units at Sibley Station. Lake Road's boiler already has the ability to burn natural gas and the company plans to operate on natural gas once it ceases coal combustion. In the coming years, KCP&L; will make final decisions regarding whether to retire the units at Montrose and Sibley or convert them. "After evaluating options for future envi- ronmental regulation compliance, ending coal use at these plants is the most cost effec- tive and cleanest option for our customers," said Terry Bassham, president and CEO of Great Plains Energy and KCP&L.; The decision to retire or convert 700 MW of power generation comes in part as a result from recent Environmental Protection Agency (EPA) regulations, which would require KCP&L; to make significant environ- mental upgrades in the coming years to con- tinue burning coal at these power plants. While retrofitting the largest, newer coal-fired power plants was the most cost-effective way to comply with environmental regulations, Bassham explained, the same cannot be said for the older, smaller units at Montrose, Lake Road and Sibley. Upper Peninsula Power Buys Presque Isle Plant We Energies, a subsidiary of Wisconsin Energy Corp., will sell its 431-megawatt Presque Isle power plant, the only coal-burn- ing generating station in Michigan's Upper Peninsula (UP), to Upper Peninsula Power, which then would continue to operate the facility until 2020 when it would be retired under a complex series of agreements unveiled in January by Michigan Gov. Rick Snyder and Attorney General Bill Schuette, both Republicans. Presque Isle's fate has been up in the air since the plant that burns about 1.4 million tons of Powder River Basin coal annually lost 85% of its electricity sales in 2013 when Cliffs Natural Resources, a major mining company, switched its two iron ore mines in the UP to an alternative power supplier, Integrys Energy Services. We Energies then proposed shutting Presque Isle in early 2014. But the Midcontinent Independent System Operator, a Pennsylvania-based power grid operator, stepped in, saying the baseload plant in Marquette on Lake Superior was needed to provide system reliability in the sparsely pop- ulated region. UPPCO is a subsidiary of Chicago-based Integrys Energy Group, also the parent com- pany of Integrys Energy Services. Wisconsin Energy is in the process of acquiring Integrys in a $9.1 billion transaction expected to close later this year. If UPPCO buys Presque Isle, Cliffs has agreed in principle to purchase a significant portion of the power required by its iron ore mines from the plant until 2020. That is when Presque Isle is expected to close due to new federal air emission requirements affecting coal-burning generators. As another part of the deal, Invenergy LLC, also based in Chicago, would construct a 280-megawatt natural gas-burning plant at one of Cliffs mines in the UP by 2020 and then begin supplying the mines. The agreements are not yet final, but are expected to be worked out later this year. 2015 Looks Good for Pennsylvania Anthracite Producers While it is early yet, all signs point to 2015 as being a good year for Pennsylvania's dozen or so anthracite coal producers, who find them- selves thriving, at least in relative terms, in a state that has mined the hard mineral contin- uously for the past 150 years. Because anthracite is not burned by U.S. utilities in power plants to generate electrici- ty, the small, tight-knit industry clustered in the northeastern Pennsylvania counties of Schuylkill, Carbon, Northumberland, Lackawanna and Luzerne essentially is immune from the seemingly endless proces- sion of air quality regulations rolled out by the federal Environmental Protection Agency (EPA). Of course, other EPA rules, pertaining to water, for example, do apply to the mining of anthracite. This year, anthracite production in the Keystone state probably will exceed 2 million n e w s c o n t i n u e d 54 www.coalage.com February 2015 News Continued from Page 19

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