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jecting." Nevertheless, "when you look at some of this excess capacity we're pulling off, some is in the ILB." With the 4 million tons Alliance will not be producing this year, coupled with Patriot Coal's recent clos- ing of the Highland No. 9 and Dodge Hill underground steam coal mines in western Kentucky, the market should be close to supply/demand equilibrium, he said. Alliance secured sales contracts in 2014 representing 30.2 million tons through 2018, and it entered 2015 with 39.3 million tons, or 96% of its coal sales volumes, contracted and priced for the year. It has 30 million tons committed and priced for 2016. Still, Craft expected to see more utility contracting activity last year. "We anticipated there would be more RFPs coming out for the ILB than there has been, and we assume the reason they haven't come out is they're relying more on natural gas," he said. During a series of recent transactions, including with Patriot, Alliance's total coal reserves have increased by 50% to 1.6 billion tons. The company is looking to take advantage if cash-strapped competi- tors go out of business. NMA's Quinn: Coal Outlook Hardened by Policies The difficult adjustments that U.S. coal operators are making in a rapidly evolving energy market have been made "immeasurably more difficult" for their employees and mine communities by reckless fed- eral regulations, said Hal Quinn, president and CEO of the National Mining Association (NMA). Addressing the annual energy outlook conference of the U.S. Energy Association at the National Press Club, Quinn said newer, larger coal power plants will generate electricity more efficiently and cleanly. But substantial capacity has already been retired and more capacity is still at risk because of various rules by the Environmental Protection Agency (EPA) that now threaten the reliability of the grid and the affordability of electricity. "What the EPA is doing is depriving households and businesses of the lowest cost electricity available today," Quinn said. Citing energy experts from grid regulators to economists, he described the growing chorus of critics now warning that the agency's proposed Clean Power Plan puts both electricity affordability and reliability at risk. Increasingly, Quinn said, governors whose states are expected to implement the plan are calling into question its assumptions, its time- frames for implementation and its feasibility. "Governors are realizing that long after this administration is gone from office, they'll be trying to explain rising electricity prices to their constituents," he added. In a global energy market that is not expected to improve signifi- cantly in 2015, Quinn suggested that the best news for fossil energy producers in 2015 may come from Washington. A friendlier n e w s c o n t i n u e d W E E K L Y U . S . C O A L P R O D U C T I O N O V E R V I E W Chinese Coal Output Sees First Decline Since 2000 Top Chinese coal industry officials recorded the first drop in main- land production since 2000 last year amid slowing GDP growth; China, the world's most populous nation, uses more coal than any other country. China's National Coal Association reported 3.5 billion coal tons produced in the first 11 months of 2014, a 2.1% decrease year-on-year; estimates of a 2.5% drop are pending this year. Profits for major Chinese coal miners, meanwhile, fell 44% to $18 billion last year, driven by a weak global market. ArcelorMittal Sells its Kuzbass Mines in Russia ArcelorMittal sold its interest in the Kuzbass coal mines in the Kemerovo region of Siberia, Russia, to Russia's National Fuel Co. (NTK). The assets include the coal mines of Berezovskaya and Pervomaskaya, which together produce 700,000 metric tons of coal a year. ArcelorMittal acquired the Kuzbass mines in 2008 as part of the company's strategy to secure delivery of coal to its steel opera- tions in Ukraine. "As our Ukraine steel operations now source coking coal from ArcelorMittal's mines in Kazakhstan, Kuzbass is no longer a strategic asset for the company," said Bill Scotting, CEO of ArcelorMittal Mining. Kuzbass is an important employer in the region and this sale to NTK offers a sustainable solution for employees and other stakeholders." Queensland's Coal Exports Grow Australian coal exports from Queensland have reached a record volume of 216 million metric tons (mt) in 2014, according to latest data from Queensland Resources Council (QRC). This equates to a 10% increase from 2013. The state shipped 168 million tons and 196 million tons of coal in 2012 and 2013, respectively. The Port of Gladstone led with 69.6 million mt. Although China's imports of thermal coal declined during 2014, Australia increased its market share displacing imports from other large suppliers including Indonesia and South Africa. While China's coal use is forecast to increase in 2015, the volume of imports will be heavily influenced by policy directives. Mechel Increases Coal Supplies to China's Baosteel Mechel will supply an additional 1.4 million metric tons (mt) to China's steelmaking major Baosteel Resources Corp. The coking coal agreement extends from April 2015 through March 2016, with a possibility of further prolongation. Prices will be determined on a monthly basis. The agreement also provides for a possibility of supplying Baosteel with PCI and steam coal. "Long-term export contracts are particularly important for us in the period of exchange volatility as they provide Mechel with stable foreign currency revenue. We are currently exporting more than 70% of our mining division's prod- ucts," said Mechel OAO's Chief Executive Officer Oleg Korzhov. Mechel is fully meeting its obligations according to the earlier contract, which provides for supplies of 1.2 million mt of coking coal a year. Between April and December 2014, more than 1 million mt of coking coal was shipped to Baosteel enterprises in China's eastern and southern provinces, which accounts for 10% of Mechel's coal exports to Asia Pacific. Continued on p. 8... February 2015 www.coalage.com 7 W O R L D N E W S ¸ ˛ ˝ ¸ (in Thousand Short Tons) Week Ending (1/31/15) YTD '15 YTD '14 % Change Appalachian 23,489 22,835 2.9 Interior 16,069 15,664 2.6 Western 46,266 44,465 4.1 East of Mississippi River 35,711 34,863 2.4 West of Mississippi River 50,113 48,100 4.2 U.S. Total 85,824 82,964 3.4