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Issue link: https://coal.epubxp.com/i/791412
January-February 2017 www.coalage.com 7 news continued and properly train their miners on hazards and conditions that could cause injury, illness or death as they perform their duties. Peabody Reaches Agreement With UCC on Reorganization In mid-January, Peabody Energy announced it reached an agree- ment with the Unsecured Creditors' Committee (UCC) on its pro- posed plan of reorganization. "We are pleased to have reached an agreement with the UCC and are encouraged by the support we have received," said Pea- body Energy President and Chief Executive Officer Glenn Kellow. "We look forward to continuing to advance a plan that we believe maximizes the value of the enterprise." The plan of reorganization remains subject to confirmation by the court, and the related disclosure statement is subject to approval by the court. Peabody Energy is the world's largest private-sector coal com- pany. The company serves metallurgical and thermal coal cus- tomers in 25 countries on six continents. Peabody Energy filed its plan of reorganization with the U.S. Bankruptcy Court for the Eastern District of Missouri, represent- ing another step in its Chapter 11 process, back in December. "The plan charts Peabody's course forward and reflects an enormous amount of work by the company and multiple credi- tor groups to advance a proposal that has broad consensus, max- imizes the value of the enterprise and paves the way for a sus- tainable future," said Kellow. "We look forward to moving toward confirmation of the plan." The proposed plan provides for a new, sustainable capital structure that significantly reduces the prefiling debt levels by more than $5 billion, lowers fixed charges and recapitalizes the company through a backstopped rights offering of $750 million, a private placement of mandatorily convertible preferred stock of $750 million and the issuance of new common stock to satisfy certain creditor claims. "Eight months ago, we set out on a path to strengthen the balance sheet and position the company for long-term success amid historically challenged coal industry fundamentals," said Kellow. "While we still have outstanding issues to resolve prior to emergence, this plan demonstrates that Peabody retains an un- matched asset base, leading U.S. platform, substantial Australian thermal and metallurgical coal business, and a team of skilled employees with a fundamental commitment to lasting values." Peabody also announced revisions to its August business plan, which includes the planned sale of the Metropolitan mine targeted for the first quarter of 2017. Peabody anticipates emerging from bankruptcy around the beginning of the second quarter of 2017. Settlement Approved With Southern Coal In late December, a federal judge approved a settlement that required pollution reductions and a civil penalty of $900,000 by Southern Coal Corp. and 26 affiliated mining companies owned by West Virginia Gov.-elect Jim Justice. The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) originally announced the settlement with the companies in September. It requires the companies to make comprehensive upgrades to their coal mining and processing opera- was suspended. The company is appealing the decision and in the meantime, it has launched the Makhado Centre of Learning to de- velop skills within communities to enable access to opportunities offered within the Makhado project. The IWUL for the company's Vele coking and thermal coal colliery has been renewed for a further 20 years and has also been amended in line with the requirements for the Plant Modifi cation Project (PMP) at the colliery. The DMR has recently granted an environmental au- thorization for stream diversion and associated infrastructural ac- tivities. CoAL awaits the approval of an IWUL from the DWS, which is the fi nal approval required to complete the regulatory approvals for the stream diversion in respect of the PMP. Hard coking coal prices have experienced tremendous movement over the last six months and CoAL is in the process of evaluating a number of acquisitions. Conuma Restarts Operations in British Columbia A second metallurgical surface coal mine, Wolverine, has resumed production in northeastern British Columbia, Canada, and its opera- tor, Conuma Coal Resources Ltd., said the mine should be turning out 1.5 million metric tons (mt) annually by this spring for the seaborne export market. Wolverine's restart comes hard on the heels of the Brule surface mine's reopening last fall in the Tumbler Ridge-Chetwynd area of the province. ERP Compliant Fuels, Conuma's West Virginia-based parent company, bought the Wolverine, Brule and Willow Creek met coal surfaces last year from Walter Energy Canada Holdings, which idled the mines in 2014 because of a downturn in coal prices. If Conuma restarts Willow Creek by mid-2017 as is hoped, the three mines should be producing at a rate of about 4 million mtpy. By April 1, Wolverine is expected to have 220 employees, increasing Conuma's employment in the area to about 400, counting Brule. Wal- ter Energy had about 700 employees before it closed the mines, less than four years after it acquired the three mines in 2010 for $3 billion. The restart of Brule and Wolverine has provided a sorely needed eco- nomic shot in the arm for the Tumbler Ridge area that experienced an unemployment surge when the mines closed. Donkin Comes Online Following several delays in 2016, the Donkin underground coal mine owned by U.S.-based Cline Group in Atlantic Canada was preparing to start operating before the end of January, producing a majority of metallurgical coal along with a smaller amount of steam coal. Cline's Kameron Collieries subsidiary, based in Halifax, Nova Sco- tia, spent months last year pumping ocean water out of the mine that was allowed to fl ood after it was closed by the now-defunct Cape Breton Development Corp. in 2001. Donkin is located along Cape Breton Island's rugged northeastern coast along the Atlantic Ocean. Donkin initially was expected to commence production last sum- mer, then last fall. In December, James Bunn II, vice president of operations for Cutlass Collieries, another Cline affi liate, predicted production would begin before the end of 2016. Once Donkin starts up, its output is projected to ramp up to about 2.75 million metric tons per year (mtpy) by the close of 2017 or early 2018. Some of the steam coal is expected to be purchased by Nova Scotia Power (NSP), the province's dominant electric utility, for use in one of the utility's several power plants in Cape Breton. NSP test-burned a small amount of Donkin coal last year and reportedly was pleased with the results. Continued from p. 6...