Coal Age

APR 2016

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SunCoke Exits Coal, Sells to Revelation Opting to instead focus on its cokemaking and coal logistics businesses, Illinois-based SunCoke Energy (SXC) said April 6 that it has divested its entire coal mining arm to Revelation Energy. The deal, which has closed, includes all SXC coal assets, mineral leases, real estate and mining reclamation costs. Most of the company's remaining assets are located in Tazewell and Buchanan counties in southern Virginia. Revelation will receive $10.3 million from SunCoke to take ownership. SXC said it will also incur about $2 million of trans- action-related costs. Combined with the sale transaction, SunCoke's Jewell Coke operations and Revelation have inked a five-year, 300,000-tons-per-year coal supply agreement "at a favorable delivered cost," by Revelation, giving it a cost-effec- tive and local supply of high-quality, mid-vol met product. "Despite our aggressive efforts to reduce costs by rationaliz- ing our mining footprint, the drastic and sustained decline in coal prices will likely prevent us from generating positive cash flow from our mining operations for the foreseeable future," SunCoke Chairman, President and CEO Fritz Henderson said. "We believe this value-positive sale will improve our long-term cash flow and allow us to focus on our core cokemaking and coal logistics businesses." In fact, he added, the deal should make SXC cash flow neu- tral by the close of 2017 based upon $12 million in avoided potential mine closure and reclamation costs and $2-3 million annually in administrative, regulatory, compliance and pur- chased coal costs through 2020. The transaction does not include the producer's legacy black lung and workers' compensation liabilities. SunCoke said it may transfer other properties to Revelation in the future for additional payment to the buyer of up to $700,000. Walter Energy Closes Asset Sale Walter Energy, which filed for Chapter 11 bankruptcy last July, has completed its sale of core coal assets in Alabama to a group of its first-lien creditors. The new owner as of March 31, Warrior Met Coal LLC, was formerly known as Coal Acquisition LLC. The Bankruptcy Court for the Northern District of Alabama approved the sale on January 8. n e w s c o n t i n u e d Queensland Government Approves Carmichael Mine Lease Queensland State Mines Minister Anthony Lynham has given approval to three mining leases for Adani's planned Carmichael coal project in Australia's Galilee Basin. The clearing of the leases i s considered a significant step ahead for the project, work for which is projected to begin next year at a cost of $21.7 billion. Carmichael's formal environmental assessments first began in 2010. Premier Annastacia Palaszczuk told ABC News Australia that the planned mine and rail complex had been under "extensive gov- ernment and community scrutiny," but also noted the thousands of jobs the project will create. "Some approvals are still required before construction can start and ultimately committing to the pro- ject will be a decision from Adani," she said, adding that tight con- trols will continue to be in place for the protection of landowners, the environment and the Great Barrier Reef. Adani said the granting of the leases helps "deliver the compa- ny certainty with respect to timelines" as it moves into the next stages of the project. "Adani has consistently said that what is required for its projects to proceed is certainty on approvals," offi- cials told ABC. "The next phase of the project following this key approval will be a return to the pre-engineering work that had to be suspended in 2015 with the loss of certainty on approvals timelines that had occurred at that time. Concurrent with that, the company will continue to finalize second-tier approvals, with the clear aim of commencing construction in calendar year 2017." Anglo Unloads Foxleigh Mine After more than a year on the market, Anglo American has sold its 70% share in the Foxleigh met coal operation in Australia to Sydney-based Taurus Fund Management. Financial terms for the deal, which are still pending and should close within the next few months, are being kept confidential. The producer first bought its share in 2007. Anglo's attributable share of saleable production from the Queensland open-cut complex outside of Middlemount in the Bowen Basin totaled 1.86 million metric tons (mt) last year. Foxleigh's sale helps make good on a projection by South African- headquartered Anglo earlier this year that it would cut its portfolio from 45 assets to 16 and concentrate on its core metal/nonmetal assets. BHP, Aurizon Seal New Haulage Deal in Australia Mount Arthur mine owner BHP Billiton has signed a new long-term coal haulage deal with Aurizon that will now extend their teaming until June 2028. The new terms allow for a possible increase in vol- ume from 18 million metric tons (mt) annually, its current level, up to 26 million mt, and will allow for additional flexibility for both parties. All coal will originate from the open-cast mine in Muswellbrook, in the Hunter Valley region of New South Wales. "BHP Billiton was Aurizon's foundation customer in the Hunter Valley when we commenced operations in the region in 2005," Aurizon Commercial and Marketing Executive Vice President Mauro Neves said. "The recent opening of our A$180 million Hexham Train Support Facility in Newcastle is a signal of our commitment and confidence in the local coal industry. The facili- Continued on p. 6... April 2016 www.coalage.com 5 W O R L D N E W S ¸ ˛ ˝ ¸ T O P 1 0 C O A L - P R O D U C I N G S T A T E S (in Thousand Short Tons) Week Ending (4/2/16) YTD '16 YTD '15 % Change Wyoming 71,148 101,713 -30.1 West Virginia 17,975 27,825 -35.4 Illinois 11,966 17,140 -30.2 entucky 11,141 17,223 -35.3 Pennsylvania 9,278 14,028 -33.9 Montana 8,327 11,170 -25.5 Indiana 6,660 9,676 -31.2 North Dakota 5,521 7,581 -27.2 Texas 5,252 8,131 -35.4 Colorado 3,552 5,390 -34.1 U.S. Total 168,251 245,447 -31.5

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