Coal Age

APR 2017

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14 April 2017 news continued The same is not the case for the company's Carlisle under- ground mine in Sullivan County, once its flagship operation with high-sulfur coal output of about 3 million tons annually. About 80% of the mine has been sealed off, taking away about 16.6 mil- lion tons of reserves. As of December 31, 2016 about 27.3 million tons of reserves were assigned to the mine, down from 43.9 mil- lion tons at the start of 2016. The company also owns the small Ace in the Hole surface mine in Clay County, Indiana, located about 42 road miles north- east of Carlisle. Hallador/Sunrise control 1.3 million tons of prov- en reserves at Ace. Lower-sulfur coal produced at Ace is blended with the company's more typical high-sulfur coal to meet demand specifications of some customers, particularly utilities in Florida. Hallador/Sunrise still are permitting the proposed Bulldog un- derground steam coal mine near Allerton in Vermilion County, Illi- nois. Bulldog would be the company's first mine in Illinois. Bulldog's permit application was filed in 2012 with the Illinois Department of Natural Resources' Office of Mines and Minerals, and Bilsland es- timates it will be approved before the end of 2017. If so, full-scale mine development will not begin until Hallador/Sunrise secure a sales commitment for the mine's projected 3 million tons/year out- put. Bulldog's development costs are estimated at $150 million. Armstrong Negotiates with Creditors Armstrong Energy Inc., an Illinois Basin high-sulfur coal produc- er, was negotiating with its creditors in early April in an effort to restructure approximately $207 million in long-term debt to avoid a possible Chapter 11 federal bankruptcy reorganization filing, according to company officials and a regulatory filing by the St. Louis-based parent company of Armstrong Coal. Martin Wilson, Armstrong president and CEO, told analysts during an April 5 conference call to discuss quarterly earnings that the company was hopeful of reaching a debt restructuring agreement soon, although he did not predict when. After discuss- ing the company's finances and coal operations in western Ken- tucky, Wilson and J. Hord Armstrong, the company's executive chairman and founder more than a decade ago, declined to take follow-up questions from analysts. Several major U.S. coal producers have proceeded through the voluntary bankruptcy route in the past few years including Peabody Energy, Arch Coal Inc. and Alpha Natural Resources, to name a few. Peabody emerged from bankruptcy in early April. Foresight Energy, also based in St. Louis and the largest steam coal producer in Illinois, avoided a possible bankruptcy filing through successful negotiations with creditors. Armstrong Coal has curtailed some operations in the past couple of years as ILB coal sales were adversely affected by low natural gas prices and former President Barack Obama's so-called "war on coal" that resulted in a regulatory crackdown on coal. In October 2016, Armstrong closed its Parkway underground mine near Central City in Muhlenberg County as its economically re- coverable reserves had been depleted. Armstrong Coal, which mined more than 9 million tons of coal just a couple of years ago, is contractually committed to sell 5.3 million tons in 2017, Armstrong Energy said in a late March filing with the federal Securities and Exchange Commission. The company controls approximately 567 million tons of proven and probable coal reserves in Muhlenberg, Ohio, McLean, Webster and Union counties in western Kentucky, including about 133 million tons it subleases from various unaffiliated landowners. Currently, Armstrong operates five mines: Equality Boot, Lewis Creek, Kronos and Midway, all in Ohio County, and Survant in Muhlenberg County. Kronos and Survant are underground room-and-pillar operations, the others are surface mines. Armstrong also operates three coal preparation plants. A 1,200 tons/hour facility at Centertown in Ohio County that serves the Midway, Lewis Creek and Kronos mines; another 1,200 tons/ hour plant at Centertown that serves the Equality Boot and Kro- nos mines; and a 400 tons/hour facility at Central City that serves the Survant mine. Virtually all of Armstrong's coal is sold into the U.S. electric utility market, and Hord Armstrong said buyers appear to be still hesitant to enter into long-term coal supply contracts. However, he did say demand is expected to improve in both 2018 and 2019. The Fate of Elmer Smith The Elmer Smith power plant on the banks of the Ohio River at the eastern edge of Owensboro, Kentucky, first began burning coal in 1964, when the Vietnam War was escalating and Lyndon Johnson Three Contura Operations Recognized for Safety and Health Contura Energy reported that three affiliate operations have received the Mine Safety and Health Training Award from the Interstate Min- ing Compact Commission (IMCC). The awards were presented on April 4, 2017 in Williamsburg, Va. at the IMCC annual awards banquet. Dickenson-Russell Contura, LLC's McClure River Plant and Paramont Contura, LLC's Toms Creek Complex, were honored in the surface coal division, while Paramont Contura, LLC's Deep Mine No. 41 received the award in the underground coal division. Each year, the IMCC recognizes excellence in mine safety and health training programs and materials, with nominees considered on a va- riety of criteria related to promoting a safer work environment and ad- dressing potential safety issues. Training materials are also evaluated on their uniqueness, ability to be easily understood by the workforce, and likelihood of increasing awareness of safety concepts and issues. "Training and preparedness are critical parts of safe and success- ful operations," said Allen Dupree, Contura's senior vice president for safety and health. "Our safety and operations professionals are always seeking opportunities to sharpen their skills and increase the safety of their work locations. Congratulations go out to everyone at Toms Creek Complex, McClure River Plant, and Deep Mine No. 41 on this well-de- served recognition." Toms Creek Complex and McClure River Plant received the coal sur- face award for their recent hazard training brochures, which include aerial views of plant buildings and location references to first aid sup- plies, and water access, as well as fuel and chemical storage. Deep Mine 41 received the coal underground award for its annual retraining materials, which includes an interactive PowerPoint pre- sentation with visual and audio representations of important safety warnings and alarms used at the mine. % 2 0 1 6 a w a r d s

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