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10 www.coalage.com June 2016 news continued when he gazes a year or two into the future, and the Illinois Basin coal producer believes it is well-positioned to take advantage of any improvements. The reason for his optimism? Natural gas pric- es have been the bane of the coal industry for the past couple of years as they hovered in the $2/MMBtu range. Bilsland said gas prices are destined to increase because, es- sentially, gas producers are not making any money with the cur- rent cheap prices. "We don't think there are any gas producers in the country that make money below $2.50/MMBtu," he said. "Even the lowest-cost producers need at least $2.75/MMBtu for a return on investment." If Bilsland is correct, gas prices should start an upward climb during the next year or so. "I think at $3/MMBtu gas, Indiana coal is in pretty good shape," said Bilsland. "At $2.50 [gas] starts to steal market share" from coal. Hallador's Sunrise Coal subsidiary operates exclusively in southern Indiana. Almost all of Sunrise's committed 2016 produc- tion, about 6 million tons, is expected to come from its two Oak- town underground mines in Knox County and its small Ace in the Hole surface mine in neighboring Clay County. Ace's lower-sulfur coal is blended with Oaktown's higher-sulfur product to meet the requirements of certain electric utility customers, particularly in Florida. Late last year, Sunrise significantly curtailed production at its once-flagship Carlisle underground mine in Sullivan Coun- ty and the workforce was cut back to a skeleton crew. Carlisle, which once turned out more than 3 million tons of high-sulfur coal annually, is expected to produce a mere 5,000 tons or so a month this year. But Hallador envisions a recovery for Carlisle as electric utility coal stockpiles are burned down and demand picks up for steam coal. A forecast hot summer across much of the U.S. would come in handy in that regard. The mine's produc- tion is expected to increase in 2018-2019, and sometime in 2020, Carlisle is predicted to resume its normal production capacity of about 3.3 million tons a year. Bilsland said, "I think the majority of coal customers have high inventory levels," he observed. "That being said, we did make an additional sale during the [first] quarter, so there are customers out there that are buying. We also have modified agreements to help get customers in better inventory lev- els. People are working on pushing coal out to next year and beyond and trying to get themselves in a more comfortable spot." During the January-March period, Hallador/Sunrise pro- duced about 1.5 million tons and sold 1.62 million tons of coal at an average price of $46.53/ton. That compared with sales of 2.1 million tons at an average price of $45.23/ton a year ago and sales of 1.43 million tons at an average price of $45.92/ ton in the fourth quarter of 2015. For the remainder of 2016, Hallador projects an average sale price of about $43/ton. The company still has about 4.4 million tons of committed sales to ship. At this point, the company expects to sell between 4.17 million and 6.56 million tons in 2017 at an estimated average price of $42.87/ton. The company said it expects to continue selling a significant portion of its coal under supply agree- ments with terms of one year or longer. On March 22, Hallador purchased the Freelandville un- derground steam coal reserve totaling 14.2 million tons from government has pledged to phase out all coal-f red electricity by 2025, but a conservative thinktank called for the shutdown to come at least two years earlier. Japanese to Build 2 Coal-power Plants North of Tokyo Japan's environment minister, Tamayo Marukawa, endorsed two new coal-f red power projects near Tokyo, while urging the power producers that will operate the plants to ensure they put measures in place to cut emissions from the facilities. The endorsement is a reversal of the stance adopted by the environment minister in No- vember when she said she wouldn't support two other coal projects because a voluntary framework set up by the power industry to cut greenhouse gas emissions wasn't suff cient. In February, the Min- istry of Economy, Trade and Industry, which has the f nal authority to approve individual coal power projects, said it will require power producers to boost the eff ciency of their plants after power com- panies set up a council to review efforts to cut emissions. The two projects include a 650-megawatt (MW) project planned by Chu- bu Electric Power Co. and Tokyo Electric Power Co. Holdings and a 645-MW unit proposed by Electric Power Development Co. and Nippon Steel & Sumitomo Metal Corp. Both coal-f red power plants will be located in Ibaraki prefecture, which lies roughly 100 km (62 miles) north of Tokyo. Czech Republic Approves Subsidy for Laid-off OKD Miners The Czech cabinet approved a subsidy for the miners to be laid off by OKD, Czech Prime Minister Bohuslav Sobotka said, adding that 7,000 or 8,000 crowns ($293-$335) will go to them monthly for up to f ve years depending on their age and the number of years in OKD, according to the Czech News Agency (CTK). The proposal was submitted by Industry and Trade Minister Jan Mladek with the aim to soften the social impact of the winding down of coal mining by OKD. Mladek told journalists during the cabinet meeting that his proposal was criticized by Finance Minister Andrej Babis, but in the end the cabinet supported it unanimously. Sobotka said the decision is an important step in support of the people and the region concerned. The Industry and Trade Ministry said the subsidy will be paid for three months to the employees who worked in OKD for two to f ve years. The period of payment will increase by three months for every other year of the employee's work. Miners over 50 who worked for 25 years in OKD at least and completed at least 3,300 shifts underground could receive the subsidy for f ve years, the ministry said. The subsidies will cost the state 1.19 billion crowns ($50 million) by 2021. Isaac Plains Mine Reopens The formerly mothballed Isaac Plains operation in Australia's Bowen Ba- sin reopened on May 18, making its owner, Stanmore Coal, the country's newest producer of coking coal. First coal was taken in April. Stanmore purchased the mine for $1 last November, taking ownership at the same time of $250 million in assets including a dragline, coal handling plant and train loading facilities. Isaac Plains is expected to produce 1.1 million metric tons (mt) an- nually with a workforce of at least 150. Output will be exported to Asian steel mills. The mine's life was recently extended from three to more than 10 years after the compliant coal resources and reserves for it and neigh- bor Isaac Plains East were upped to 76.9 million mt and 15.7 million mt, respectively. Continued from p. 8...