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Janaury/February 2018 www.coalage.com 7 news continued lenders and more than 92% from second-lien lenders. Blackhawk was advised by Perella Weinberg Partners and Latham & Watkins LLP. The lenders were represented by Davis Polk & Wardwell LLP. Privately owned Blackhawk operates 10 mining complexes and 25 mines across southern West Virginia and eastern Ken- tucky. It has nearly 3,000 employees. Blackhawk mines and sells met, PCI, steam, stoker and other specialty coals to a wide range of domestic and international steel producers, electric utilities, and industrial customers. The company was formed in 2010 with the acquisition of the Spurlock complex in Floyd County, Kentucky, producing a little more than 1 million tons of coal in its fi rst year of operation. In 2012, Black- hawk acquired the Pine Branch complex in Perry, Knott, Breathitt and Leslie counties in eastern Kentucky. ICG Hazard in eastern Ken- tucky then was acquired by Pine Branch in 2014, with the Triad, Blue Diamond and Hampden complexes acquired later that year in Indi- ana, eastern Kentucky and West Virginia, respectively. Blackhawk also acquired the Panther Creek, Blue Creek, Rockwell and Kanawha Eagle complexes in West Virginia in Octo- ber 2015. FERC Rejects DOE's Proposal on Grid Reliability On January 8, the Federal Energy Regulatory Commission (FERC) rejected a rule proposed by the Department of Energy (DOE) on grid reliability and resilience pricing. The rule would have en- sured that each eligible reliability and resiliency resource could recover its fully allocated costs. According to DOE Secretary Rick Perry, FERC-approved wholesale markets are not necessarily pricing resiliency attri- butes of traditional baseload generation adequately. The rule would have paid for baseload generators to maintain a 90-day stockpile of fuel. Back in September, Perry proposed the rule to the FERC as a way to address what he called threats to U.S. electrical grid re- siliency, citing the 2014 Polar Vortex as one example. Perry de- scribed it as a warning that the current and scheduled retirements of fuel-source units could affect the reliability and resiliency of the power grid. After rejecting the proposal, FERC initiated a new proceed- ing that will examine the resilience of the bulk power system by directing operators of the regional wholesale power markets to provide information as to whether FERC and the markets need to take additional action on resilience of the bulk power system. "The goals of this proceeding are to develop a common un- derstanding among the commission, industry and others of what resilience of the bulk power system means and requires; to un- derstand how each regional transmission organization and in- dependent system operator assesses resilience in its geographic footprint; and to use this information to evaluate whether addi- tional commission action regarding resilience is appropriate," the statement by FERC said. Each regional market operator must submit the required in- formation within 60 days of issuance of the order. "I appreciate the commission's consideration and effort to fur- ther assess the marketplace distortions that are putting the long- term resiliency of our electric grid at risk," Perry said. "As intended, my proposal initiated a national debate on the resiliency of our elec- groups backed by Ecojustice of the project's approval. The project has been controversial because it would move thermal coal mostly from American coal mines, which have no port access on the Pacif- ic West Coast to ship coal to Asia. Chinese Power Producers Want More Coal China's four major power generation groups have asked the National Development and Reform Commission, the country's top economic regulator, to increase coal supplies and regulate and reduce coal prices after snowstorms sweeping across central and southern provinces led to major losses for the thermal power sector, China Daily reported. The four top utilities, China Huaneng Group, China Datang Corp., China Huadian Corp. and State Power Investment Corp., said in a joint report they are facing pressure due to tight gas and coal sup- plies and have warned of potential heating and electricity shortages as blizzards continued to buffet some central and southern provinces. Yancoal to Produce 70 Mt of Raw Coal in 2018 China's Yancoal Australia Ltd (Yancoal), the largest pure-coal pro- ducer in Australia, is expected to produce at least 70 million metric tons (mt) of raw coal in 2018, according to Xinhua. The annual raw coal production of Yancoal, which is a subsidiary corporation of Yankuang Group Co. Ltd, one of China's largest energy enterprises, has seen great increase after the acquisition of Coal & Allied in September. India Eases Up on Commercial Coal Mining Auction Rules Aiming to push ahead and open commercial coal mining in India to private miners, the country's Ministry of Coal has eased rules for auction of coal blocks and woo domestic and foreign investors into the sector. The Coal Ministry was trying to complete the ground rules for the auction of at least 10 coal blocks by the end of the current fi scal year on March 31, which would open up coal mining to private min- ers with full production, pricing and merchant sale freedom, for the fi rst time since the coal industry was nationalized in 1973. As things stand now, coal blocks were allocated to private miners through the auction route for captive mining only with min- ers having specifi c end-use plants. To trigger greater interest among domestic and foreign inves- tors, the most signifi cant changes in auction rules proposed by the Coal Ministry was the adoption of "reverse auction" to allocate the 10 coal blocks to commercial coal miners instead of a "forward auction" as laid out in the draft rules late last year. Through the reverse auction route, a coal block would be allo- cated to a bidder that offers the lowest price coal to end-users. The government would set a benchmark price based on the "notifi ed price of coal charged by government-owned Coal India Ltd. (CIL)" and bidders would have to compete with the lowest selling price of coal below this benchmark price. In forward auction, the ministry has stated it would lay down a minimum revenue share of the government at 1.2 times the notifi ed price of CIL and a bidder quoting the highest share of revenue with the government would be awarded the coal block. The Indian government has set a target of achieving coal pro- duction of 1.5 billion ton by 2020 of which 1 billion tons would be accounted by CIL, 100 million tons by Singareni Collieries Co. Ltd., and the remainder by captive and commercial miners. Continued from p. 6...