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8 www.coalage.com July 2016 news continued er-more difficult working conditions. Today's vote reflects those difficulties and I understand that." DOL Ups Civil Penalties The U.S. Department of Labor (DOL) has unveiled two interim final rules to adjust violation penalties for inflation. The new rules are effective August 1, and adjustments have been made across the DOL's agencies. The increases have been issued as a final rule following the guidelines of the Federal Civil Penal- ties Inflation Adjustment Act, which were passed by Congress last year. In it, each agency must publish "catch-up" rules by July 1 to bring penalty structures current from the date of the last increase. The first rule is the one directly tied to the industry; it in- cludes most penalties by the Mine Safety and Health Admin- istration as well as other groups. Specifically, the adjustments are capped at 150% of the existing penalty amount, and im- pact-only penalties assessed after August 1 for violations that occurred after November 2, 2015. For example, a regular as- sessment (30 CFR 100.3(A)), last adjusted in 2007, will now by capped at $68,300, and minimum penalties for orders issued under 104(d)(2) of the Mine Act will now carry a minimum penalty of $4,553. A 45-day public comment period has now opened for pub- lic input on the new rules. Production Down for Rhino Rhino Resource Partners' steam coal mines in Kentucky and Utah were bright spots, and its mining operations in Ohio and West Virginia less so, for the Lexington, Kentucky-based com- pany in the first quarter of 2016 as Rhino, overall, produced and sold less coal than it did a year ago. Productivity improve- ments at Rhino's Pennyrile underground mine on the Green River in western Kentucky's McLean County helped the com- pany lower its total cost of operations in the January-March period. Cost of operations per ton from continuing operations averaged $37.27 in the latest quarter, down from $52.86 in the first quarter of 2015, Rhino said. Pennyrile, also known as Riveredge, opened in 2014 and is poised to become a major producer and financial contributor for the company. The mine has long-term sales contracts with Louisville Gas & Electric (LG&E;). Thanks to the higher productivity and improved coal re- covery rates, Pennyrile became "cash flow positive" in the first quarter, according to Joe Funk, Rhino president and CEO. "We are fully contracted for 2016 at Pennyrile with 1.2 million tons forecast to be produced and sold this year. We believe Pen- nyrile will be a positive cash flow provider for [Rhino] for the remainder of 2016 at these production and sales levels. Pen- nyrile gives us additional diversification as we expect it to be a significant generator of stable cash flow as it ramps up to its full potential run rate of 2 million tons per year." In the first quarter, Pennyrile produced and sold 327,000 and 316,000 tons, respectively. That was more than a third of Rhino's total quarterly production and sales of 790,000 and 873,000 tons, respectively. Rhino's first quarter coal rev- enue averaged $46.42/ton, versus $52.18/ton in the year-ago quarter. metric tons (mt) of coal handled since the beginning of the year. Offi cials metric tons (mt) of coal handled since the beginning of the year. Offi cials cited terminal equipment updates for the positive results, as well as the introduction of new high-effi ciency technology and the coordination and introduction of new high-effi ciency technology and the coordination and professional work ethic of its workforce. Daltransugol, the largest sea coal terminal in the Far East transshipping in the Asia-Pacifi c region, shipped a total of 18.2 million mt in 2015. Another upgrade project is currently under way at Daltransugol to again increase its capacity; the fi rst phase of that, a connection between it and the Vanino Railways park station, opened last month. The terminal fi rst came online in 2008 with an annual production capacity of 12 million mt. SUEK, formally known as Siberian Coal Energy Co., is the largest coal company in Russia and a top exporter. company in Russia and a top exporter. Dubai Invests in Clean Coal Project Dubai's government-owned utility, DEWA, recently signed agreements with a consortium, that includes China's Harbin Electric and Saudi Arabia's a consortium, that includes China's Harbin Electric and Saudi Arabia's ACWA Power, to build and operate a 2,400 megawatt (MW) clean coal power plant. The 25-year power purchase agreement supports the Has- power plant. The 25-year power purchase agreement supports the Has- syan project, which will consist of four 600-MW coal-fi red units, featuring carbon capture storage technology. China's Coal Production Plummets in May China's coal production declined sharply in May as measures to cut ca- pacity began to take effect, Xinhua reported. Total output of coal mining pacity began to take effect, Xinhua reported. Total output of coal mining companies with annual revenue of more than 20 million yuan ($3 million) dropped 15.5% year on year in May, according to the National Develop- ment and Reform Commission. Output accumulatively decreased by 8.4% in the fi rst fi ve months compared with the same period last year, the com- mission said, without providing further details. Since April, major coal-pro- mission said, without providing further details. Since April, major coal-pro- ducing provinces and regions reported sharp output declines. Coal output ducing provinces and regions reported sharp output declines. Coal output in Shanxi Province, the country's largest coal-producing region, was down in Shanxi Province, the country's largest coal-producing region, was down 21.3% year-on-year in April. Donkin Mine to Produce 2M Tons Per Year By the summer of 2017, U.S.-based Cline Group's Donkin underground mine in Canada's Nova Scotia province is expected to be producing coal at the rate of approximately 2 million tons annually, according to the compa- ny's Kameron Collieries subsidiary. The mine, which will extend for about a ny's Kameron Collieries subsidiary. The mine, which will extend for about a mile and several hundred feet below the Atlantic Ocean along Cape Bret- on's rugged northeastern coastline, is estimated to produce its fi rst coal on's rugged northeastern coastline, is estimated to produce its fi rst coal late this year or in early 2017. During a presentation at a Port of Sydney, Nova Scotia, conference in During a presentation at a Port of Sydney, Nova Scotia, conference in late May, Kameron Vice President Ed Griffi th said the company is com- late May, Kameron Vice President Ed Griffi th said the company is com- mitted to developing a world-class mining operation at Donkin. Kameron envisions a 30-year life for Donkin and is constructing a prep plant to wash the mine's coal. Cline/Kameron are confi dent that Donkin's coal will be in top demand, in both steam and metallurgical markets. The reserves are of top demand, in both steam and metallurgical markets. The reserves are of high quality, averaging at least 13,500 Btu/lb and 1.5% to 2% sulfur, with ash content of only 3.5% after washing. Kameron is counting on the new prep plant to strengthen Donkin's ar- gument for use by Nova Scotia Power (NSP), the Maritime province's domi- nant electric utility. NSP's 600-megawatt Lingan power plant is considered a likely domestic destination for Donkin coal. At the site, work continues on a conveyor belt to haul the coal to the surface, and tunnel rehabilitation is scheduled for completion by the end of surface, and tunnel rehabilitation is scheduled for completion by the end of summer. The fi rst continuous miner unit is targeted for startup by the end summer. The fi rst continuous miner unit is targeted for startup by the end of the year, with the mine expanding to a two-unit operation by mid-2017. Continued from p. 6...