Coal Age

FEB 2012

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news continued fourth quarter resulted in lower coal sales volumes compared to the corresponding 2010 quarter. tus for QR National's proposed Central Queensland Integrated Rail Project, which would link multiple mines in the Galilee and Bowen basins to coastal ports. China First, a Clive Palmer-owned exploration and coal mine development company, gave formal notice that it intends to file a damages claim in the Queensland Supreme Court against QR National. The company alleges QR National, which is more than 34% owned by the Queensland Government, breached a confiden- tiality agreement with China First Pty Ltd. China First's proposed $8 billion coal mine and infrastructure project in the untapped Galilee Basin had also been granted signif- icant project status by the Queensland Coordinator-General. "Our China First project will create 6,000 jobs during construction and will generate an estimated $4.6 billion per year in export revenues once operational," China First's spokeswoman Baljeet Singh said. "Now we have QR National in conjunction with the Queensland Government claiming it can build the rail link and create hundreds of jobs in what looks like a bid to score some political mileage in the government's bid for re-election. This is an outrage as we had already been in commercial discussions and exchanges with QR National for cooperation in the joint development of rail and port facilities supporting the Galilee Basin. "We have advised the Coordinator-General of the improper use for which the subject significant project declaration regarding QR National has been made and reserve our rights against him and the Queensland Government," Singh said, "We intend to seek damages of $8 billion and will also seek injunctions against QR National and other relevant parties seeking to restrain them from dealing with QR National in respect of the Galilee Basin and its corridor and associated port facilities." The China First Coal Project includes a large scale thermal coal mine near Alpha, west of Emerald. The proposed mine will be linked to the new T4-T9 coal terminal at Abbot Point near Bowen by a new 471-km, heavy-haul railway line. Indonesia's second-largest coal mining contractor PT Bukit Makmur Mandiri Utama (Buma) signed an extension on a mining- service contract with Bayan Resources worth $820 million. According to , the term of the contract was extend- ed to December 31, 2017. During the period, Buma will move 261 million bank cubic meters of overburden and transport 29 million metric tons of coal. Buma is the second-largest coal-mining con- tractor in Indonesia, providing mining services under long-term operating agreements with some of Indonesia's largest coal pro- ducers, such as PT Berau Coal and PT Adaro Indonesia, as well as PT Kideco Jaya Agung and subsidiaries of PT Bayan Resources. The New South Wales Mineral Council is expecting coal production across the state to increase by as much as a third this year. According to , an additional 50 million metric tons of coal is expected to be mined in 2012 if extensions and new develop- ments are given the go-ahead by planning officials. NovaDx Venture's Rosa mine moved to full commercial production in December. The company is targeting 120,000 tpy of clean coal. Patriot Reduces Met Output, Settles on Selenium Patriot Coal plans to implement proactive measures at its Southern West Virginia operations to curtail higher cost production in response to weaker market demand for metallurgical coal. The company will idle one contractor-operated mine and two sub- sidiary-operated production units in the Rocklick complex. Two contractor-operated mines in the Wells complex will be idled. "Metallurgical coal demand has trended steadily downward in recent weeks, most notably in the export market," said Patriot President and CEO Richard M. Whiting. "These production cuts, in conjunction with other cost-reduction measures being imple- mented concurrently, are aimed at lowering our mining costs, aligning production with identified sales, and preserving high- quality reserves for a stronger market. During 2011 we increased metallurgical coal production to match the needs of the market. The modular nature of our Met Build-Out program allows flexibil- ity to dial production up or down in line with market circum- stances." In related news, Patriot Coal has entered into a consent decree with the Ohio Valley Environmental Coalition, the West Virginia Highlands Conservancy and the Sierra Club to resolve claims under the Clean Water Act relating to its mining activities in West Virginia. 8 www.coalage.com February 2012 Alliance's new Tunnel Ridge longwall mine should drive this year's increase, Craft said. With extensive reserves in Washington County, Pa., and Ohio County, W.Va., Tunnel Ridge is in the process of ramping up production of high-sulfur steam coal. When in peak production, it should turn out about 6 million tons annually. Construction continues, meanwhile, on Alliance's new Gibson South underground mine near also in Gibson County. Operated by a subsidiary, Gibson County Coal, Gibson South is targeted to produce about 3.1 million tons of high-sulfur steam coal a year, probably starting in 2014. The mine will be a continuous miner operation. Rosa Mine Reaches Full Commercial Production NovaDx Ventures Corp., during December 2011, moved to full commercial production at the Rosa mine. "We are pleased the Rosa mine and wash plant are beginning to operate at our commercial production target of 120,000 tons per year of clean coal," said Neil MacDonald, CEO, NovaDx. "As we expected, our Rosa wash plant is producing a high-quality product, and we have recently negotiated higher contract prices for our coal in 2012." Continued from pg 7... Buma Obtains Contract Extension The Jakarta Post New South Wales Coal Production Expected to Increase ABC News Continued on pg 10...

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