Coal Age

FEB 2012

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news continued In the Hunter Valley, an extension of the Bengalla mine is almost complete, while Wambo is applying to extract a further three longwall panels at its Warkworth site. But Acting CEO of the Minerals Council, Sue Ern Tan, said there is still a long road ahead. "Obviously we have a very rigorous assessment process here in New South Wales and the projects have to go through that process for being approved and then come online." The Minerals Council is concerned thousands of Hunter Valley mining jobs could still be at risk from the carbon tax, despite increased coal production. The Federal Government rejects claims that there will be mass job losses under the carbon reduction mea- sures. But Ern Tan said mines are still anxious about the future. "18 coal mines will face premature closure under the tax and those mines employ 3,000 people in New South Wales and 1,100 in Queensland. Those are the ones that are at risk in the first three years of the tax. In Australia, we actually produce six per cent of the world's coal and yet we make such an important contribution local- ly," said Ern Tan. According to , Vale made its first transshipment of 37,600 metric tons (mt) of coal off the coast of central Mozambique. The exports were destined for India. Since September 2011, Vale has exported 174,000 mt of coal from Mozambique. China National Coal Group, parent company of the country's second largest coal miner, China Coal Energy Co. Ltd., reaped a gross profit of CNY16.38 billion ($2.6 billion) last year up by 35.2% year-on-year, reported. China National Coal produced 164 million metric tons (mt) of raw coal last year up by 11.4% year-on-year. In 2012, the group aims to produce 170 million mt of raw coal. The group current- ly has 43.5 billion mt of coal resources under control. Coal production capacity operation and under construction totals 258 million mt. In a landmark decision, the Land and Environment Court has held that one of New South Wales coal mines should have to pay to off- set some of its greenhouse gas emissions as a condition of opera- tion. According to the , the provisional decision was a win for the Hunter Environment Lobby represented by the Environmental Defender Office which had appealed to the court over the Minister for Planning decision to both consolidate historical consent authorities of the Ulan mine, near Mudgee and double its operational life and capacity to 2031. The Xstrata and Mitsubishi-owned Ulan coal mines, backed by the minister and the Department of Planning, had argued that off- setting the mine's scope one emissions was discriminatory, given that there were at least 50 coal mines operating in NSW. The gov- ernment told the court the carbon tax regime was a preferable poli- cy. The parties settle the details and set a timetable by February 13 before final orders are made. ˛ 10 www.coalage.com As a result of the negotiated settlement, the company has agreed to a comprehensive plan which provides for the necessary time and flexibility in the development, selection and implemen- tation of emerging technologies to meet compliance deadlines in the future. To resolve claims related to the consent decree, the company will pay $7.5 million in civil penalties, to be allocated between the federal government and the West Virginia Land Trust for land preservation projects within the Kanawha River and Guyandotte River watersheds. The consent decree, which has been filed with the U.S. District Court for the Southern District of West Virginia, is subject to a public comment period and must be approved by the court before it becomes effective. Armstrong Will Go Public Illinois Basin coal producer Armstrong Energy was moving for- ward in early 2012 with an initial public offering (IPO) it hoped to close before the end of the first quarter. Armstrong, the parent company of Armstrong Coal, filed for the IPO with the U.S. Securities and Exchange Commission last October. The company wants to raise about $91 million by going public in the United States. Armstrong is owned by Yorktown Partners L.P., a private equi- ty firm. It is following in the footsteps of two other small- to mid- sized coal producers—Oxford Resource Partners and Rhino Resource Partners—that completed successful IPOs in 2010. Martin Wilson, Armstrong Energy president, is targeting the end of March for the IPO. Armstrong Coal is strictly a steam coal producer that operates exclusively, at least for now, in the western Kentucky counties of Muhlenberg, Ohio, Union and Webster. It operates three under- ground and four surface mines and controls an estimated 319 million tons of proven and probable high-sulfur coal reserves. Thanks to two new mines, Kronos and Lewis, Armstrong antic- ipates its production will reach 9 million tons this year, up from 7.2 million tons in 2010. Tonnage amounts for 2011 are not yet available. Chicago Clean Energy Remains in Limbo A $3 billion coal gasification project proposed for Chicago's South Side was in limbo in early 2012 following a split decision by the Illinois Commerce Commission. But the developer, Chicago Clean Energy, its parent company, New York-based Leucadia National Corp. and supporters vowed to fight on in hopes of reversing the ICC's order. By a 3-2 vote on January 10, the com- mission voted to ask two of the state's large utility companies— Ameren Corp. and Nicor Inc.—to purchase only 84% of the synthetic natural gas that would be produced by the plant. Chicago Clean Energy wants the companies to buy all of the syn- gas and cover all maintenance expenses. Chicago Clean Energy spokeswoman Eileen Boyce said the ruling would be appealed, and the company was hopeful it eventually would prevail. Regulator's Refuse Request to Recover Sporn's Retirement Costs American Electric Power (AEP) was weighing its options in late January after Ohio regulators turned down its request to recover about $56 million in costs related to the planned retirement of a February 2012 Continued from pg 8... Vale Ships Coal from Mozambique to India Agencia de Informacao de Mocambique China National Coal Posts Big Profits in 2011 China Knowledge Australian Coal Mine Forced to Pay for Emissions in Landmark Case Sydney Morning Herald

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