Coal Age

FEB 2012

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Page 22 of 59

transport tips continued In the midst of confusing worldwide coal demand signals McDuffie finds itself in the process of increasing throughput. It has ordered a new shiploader which will be installed later this year. Also within the termi- nal boundaries Jim Walter Resources pur- chased a privately-owned coal terminal from Transtar's Warrior & Gulf for $35 million, and intends to convert it from an iron ore import- ing terminal to a coal exporting terminal for its own production. These are but a few of the capital expansions under way. WATCO, a Kansas-based corporate own- er of Class II and III railroads, recently pur- chased the Birmingham Southern Railway, and will operate it as the Birmingham Terminal Railway. The Birmingham Southern (BSRR) had operated under vari- ous names for decades, but was always the railroad with the primary responsibility for hauling coking coal to U.S. Steel's Fairfield, Ala., plant. Currently, it hauls coal from Cliffs' Oak Grove mine about 25 miles southwest of Birmingham. However, the rail system goes to Port Birmingham on the Black Warrior River, and is capable of taking coal that has been barged to the Port Birmingham terminal. The 75-mile BSRR serves Alabama's largest steel-making and manufacturing region, and provides service to the Port of Birmingham and a rail-to-barge/barge-to- rail facility on the Black Warrior River. The short line interchanges with BNSF Railway Co., CSX Transportation and Norfolk Southern Railway. "This acquisition fits nicely with our con- tinued business expansion in Alabama," said Watco Chief Commercial Officer Ed McKechnie. "Birmingham Terminal will join our Alabama Warrior Railway, Autauga Northern Railroad and the Alabama Southern Railroad that operate in Alabama. Combined, these four railroads will move more than 100,000 rail cars a year." All but Autauga Northern are involved in coal haulage. Watco currently owns 23 short lines in the United States. It also provides transloading, warehousing, intermodal and other services. This includes the ter- minal at Port Birmingham, which is capa- ble of unloading barges to unit trains and vice versa. The Birmingham Southern Railroad Co. was organized on March 3, 1899. The line was originally built between 1878 from Birmingham to Pratt City, Ala., to haul coal to the steel mills in Birmingham. This purchase by Watco represents the first time in 113 years that the railroad was not controlled by U.S. Steel or one of its subsidiaries. February 2012 21 It is nearly impossible to chronicle all of the ownership changes in coal terminals on the inland waterways, but Figure 1 is a chart of current terminals as recently reviewed with Alabama River veteran Parker Towing. Several of the Locust Fork terminals are known to be inactive, and one of the Mulberry Fork termi- nals no longer handles coal. Beyond that, we suspect that several other terminals are inac- tive due to declining Alabama production and rising coal imports from other states. One is reminded that terminals and power plants on the Tennessee River, while located within the northern counties of Alabama, are physically isolated from the other terminals and power plants within the state except for a lengthy trip via the Tennessee-Tombigbee Waterway, a route rarely if ever used for coal haulage from Alabama mines. Dave Gambrel is a consultant to the coal mining and transportation business. He may be reached at

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